What happens if a co-tenant takes out a home equity loan or refinances the inherited property without my approval?

Short answer: Under Hawaii law a co-tenant generally cannot bind your ownership interest simply by getting a loan without your signature, but a lender that records a mortgage or a court-ordered foreclosure on that co-tenant’s interest can create real risks for all owners — including a possible forced sale. Act quickly: check public records, gather documents, and get legal help to protect your interest.

Detailed answer — how this works in Hawaii

This answer assumes the property was inherited and that the heirs hold title as co-owners (commonly as tenants in common). If the title instead vested differently (for example, as joint tenants with right of survivorship), the details may differ. The steps below explain typical legal rules you can expect under Hawaii property practice and what actions you can take.

1. What a single co-tenant can and cannot do

A co-tenant can usually encumber or mortgage their own undivided interest in the property (the share they own). A mortgage signed only by one co-tenant generally creates a lien on that co-tenant’s interest, not an automatic, valid lien on the full property interest of the other co-owners.
However, lenders generally will not lend on an undivided minority interest alone unless they can take comfort from additional protections (for example, consent of other owners, a recorded deed of trust signed by all owners, or a clear chain of title). As a practical matter, most conventional lenders require all titled owners to sign loan documents.
If a co-tenant obtains a mortgage or refinances and records it, the lender’s recorded document can cloud title. If the lender later forecloses on the borrowing co-tenant’s interest, a foreclosure or a partition sale can put the entire property at risk of sale even though the other owners did not sign the loan.
If a co-tenant forges your signature or uses fraud to transfer title or obtain a loan, that is illegal. You can challenge the deed, stop sales, and potentially pursue criminal charges.

2. What a recorded mortgage on one co-tenant’s interest means

If a mortgage is recorded against the property, a title search will show it. A mortgage recorded after a proper foreclosure could lead to a court-ordered sale that distributes proceeds according to ownership interests and debts. If a co-tenant’s mortgage is only on his or her fractional interest, a lender’s remedies can be limited to that interest — but lenders often seek a sale of the whole property via a partition action to enforce the debt.

3. Partition and forced sale

Co-owners (or lenders with rights through a co-owner) can ask a court for partition. A partition action can end with the physical division of property (rare for a single house) or, more commonly, a court-ordered sale and division of proceeds. If a lender forecloses on a borrowing co-tenant’s interest or the lender forces a partition, you could lose your home or be required to accept sale proceeds instead of continued co-ownership.

4. If the co-tenant refinanced without your approval — likely outcomes

If you did not sign any loan or deed documents: the lender typically has a weak claim against your specific ownership interest, but the recorded mortgage can still cloud title and cause legal disputes.
If the co-tenant recorded a deed transferring full title without your signature (for example, by forgery or false notarization): you can challenge the deed in court, seek a quiet title action, and request immediate injunctive relief to block transfers or sales.
If a foreclosure sale is scheduled: you should act fast to seek an injunction in state court or negotiate with the lender. Timing is critical because courts may allow emergency relief only in the short window before a sale.

5. Practical steps to protect your interest (what to do right now)

Search the public land records and recorded documents for the property. In Hawaii, public lands and conveyances are searchable through the state/county recording system; review recorded mortgages, deeds, and liens.
Get certified copies of any recorded deed, mortgage, or partial reconveyance. The record will show who signed and when.
Contact the lender in writing and tell them you did not sign any loan documents (keep copies). Ask for a copy of the loan application and identity-verification documents.
Preserve evidence: gather inheritance paperwork, wills, probate orders, death certificates, and communications with the co-tenant.
Consult a Hawaii real property attorney quickly to evaluate claims for quiet title, cancellation of fraudulent instruments, injunctions, and partition defenses. An attorney can also advise whether to pursue criminal referrals for fraud or forgery.

6. Possible legal claims and remedies

Quiet title / declaratory judgment: ask the court to confirm your interest and remove improper liens or deeds.
Injunction to stop a foreclosure or sale: emergency relief may be available if you act fast and show likely success on the merits.
Cancellation of fraudulent instrument: if the deed, signature, or notarization is forged or procured by fraud.
Partition defense or counterclaim: if a lender or co-tenant seeks partition, the court will decide sale and distribution; you can protect your share in that process.
Criminal complaints: forgery, fraud, or theft of identity are criminal matters that can be reported to local law enforcement and the prosecutor.

7. Timing and costs

Litigation (quiet-title, cancellation, partition) can take months to a year or more. Emergency injunction hearings can be scheduled much sooner. Costs vary; an attorney can give a better estimate after reviewing records.

8. Where to find Hawaii legal resources

Hawaii State Judiciary — information about filing civil actions and self-help resources: https://www.courts.state.hi.us/
Hawaii Revised Statutes (search statutes and chapters): https://www.capitol.hawaii.gov/hrscurrent/

Important note: The precise legal tools and timelines depend on how title is held, what documents were recorded, and whether fraud or forgery was involved. A local attorney can review your title documents, check the record chain, and advise next steps.

Helpful Hints

Don’t ignore recorded notices — a recorded mortgage or lis pendens (lawsuit notice) can start strict timelines.
Do a title search as soon as possible. Many problems show up in public records and are fixable if identified early.
Keep calm and document everything: texts, emails, bills, and any payment records related to the property.
A lender that accepted a loan application without every titled owner’s signature may have exposed itself to risk — that can help your position in a dispute.
Consider mediation with co-owners if fraud is not involved and the co-tenant is willing to negotiate (for example, a buyout or refinancing that includes you).
Act fast if you suspect forgery or imminent foreclosure — courts can grant emergency relief but only if asked quickly.
Consult a Hawaii real property attorney for tailored guidance; the sooner you consult one, the better your chances to protect the property.

Disclaimer: This article explains general legal concepts under Hawaii law and is for educational purposes only. It is not legal advice and does not create an attorney-client relationship. For advice about your specific situation, you should consult a licensed attorney in Hawaii.