Disclaimer: I am not a lawyer. This article is for educational purposes and does not constitute legal advice.
Detailed Answer
Understanding Carrying Costs
In a joint sale agreement, carrying costs are expenses associated with holding the property until closing. Common carrying costs include:
- Mortgage interest
- Property taxes
- Insurance premiums
- Homeowners association (HOA) fees
- Utilities and maintenance
Step 1: Identify and Document Costs
Gather statements or invoices showing each expense. Note the date range and total amount for each category.
Step 2: Determine Ownership Shares
Review the joint sale agreement or deed to confirm each co-owner’s percentage share. If not specified, assume equal shares.
Step 3: Calculate Pro Rata Share
Multiply the total cost of each category by the co-owner’s ownership percentage. For example, if the interest payment is $4,000 and you own 50%, your pro rata share is $2,000.
Step 4: Demand Reimbursement
Send a written demand letter to the co-owner. Include:
- A clear breakdown of costs and pro rata shares
- Copies of supporting documents
- A deadline for payment
Hawaii Law on Contribution and Partition
Under Hawaii law, co-owners have a right to contribution for necessary expenses. In a partition action, courts may equitably allocate costs.
– HRS §651-1 allows any co-owner to bring a partition action.
– HRS §651-6 authorizes the court to apportion expenses among co-owners.
Recovering Carrying Costs from a Co-Owner
1. Formal Demand Letter
Start with a written demand. Specify the amount owed, due date, and potential next steps if unpaid.
2. Mediation or Arbitration
Check your joint sale agreement for an alternative dispute resolution clause. Mediation can resolve disputes faster and at lower cost.
3. Partition Action
If negotiation fails, file a partition action in the appropriate circuit court. Request an accounting and contribution of expenses under HRS §651-6. The court can order the co-owner to pay their share before or after sale.
Helpful Hints
- Maintain careful records of all expenses and communications.
- Include specific language about cost sharing in your joint sale agreement.
- Consult an attorney early if the co-owner disputes the amounts.
- Use certified mail for demand letters to track delivery.
- Consider small claims court for disputes under the small claims limit.