Detailed Answer
When two or more co-owners enter a joint sale agreement for real estate in Michigan, they share carrying costs such as mortgage payments, property taxes, insurance premiums and maintenance expenses. If one co-owner fronts these costs, Michigan law permits that co-owner to recover their fair share from the non-paying co-owner through an equitable accounting or a partition action. Here’s how to proceed:
1. Identify and Document Your Carrying Costs
- Mortgage interest and principal payments
- Property taxes
- Homeowner’s insurance premiums
- Utilities and general maintenance
- HOA or condominium fees (if applicable)
2. Calculate Each Owner’s Share
Determine each co-owner’s percentage interest (often by deed or written agreement, e.g. 50/50). Then multiply the total carrying costs by that percentage. For example, if you paid $12,000 in costs and hold a 50% interest, the other co-owner owes you $6,000.
3. Seek Reimbursement Under Your Agreement
Review your joint sale agreement for any cost-sharing or reimbursement clause. Prepare a written demand including copies of invoices, bank statements or cancelled checks to support each expense. If the agreement requires arbitration or mediation, pursue that first to avoid litigation.
4. File a Partition Action If Necessary
If the co-owner refuses to pay, you can file a partition action under Michigan law, MCL 600.3201 et seq. (MCL 600.3201). In such an action, the court may:
- Order sale of the property
- Allocate net proceeds among co-owners
- Reimburse the paying co-owner for advanced carrying costs per MCL 600.3211
5. Obtain a Court-Ordered Accounting
Request an equitable accounting within the partition action. The court will net each co-owner’s contributions by crediting necessary payments—like mortgage interest, taxes and insurance—to the advance-paying co-owner before dividing the remaining proceeds.
Disclaimer: This article is for educational purposes and does not constitute legal advice. Always consult a Michigan-licensed attorney to address your specific situation.
Helpful Hints
- Maintain detailed records of all property-related payments and invoices.
- Note payment dates, amounts, payees and purpose.
- Compute costs on a consistent schedule (monthly or annually).
- Send reimbursement requests by certified mail with return receipt.
- Consider mediation to resolve disputes faster and more affordably.
- If disagreements persist, consult a Michigan real estate attorney promptly.