Can a Co-Tenant Mortgage or Refinance an Inherited Property Without My Consent? — Minnesota

Detailed Answer

This section explains what typically happens under Minnesota law when one co-owner of an inherited property obtains a home equity loan or refinances without the other co-owners’ approval.

Who can encumber the property?

How much control a co-owner has depends on how the title to the inherited property is held.

• Tenancy in common: each co-owner (tenant in common) owns an undivided share and may mortgage or encumber only that owners share. A mortgage signed by one co-owner generally creates a lien against only that co-owners undivided interest, not the other owners separate interests.
• Joint tenancy with right of survivorship or other arrangements: different rules may apply, and some transfers or encumbrances can affect the entire parcel depending on how title appears and what documents were signed.

What a recorded mortgage or refinance usually does

If a mortgage or deed of trust is recorded at the county recorders office, it gives public notice and shows up on the title. In Minnesota, recording statutes set the public notice rules and priorities for liens; recorded documents are discoverable for anyone checking title. See Minnesota recording statutes: Minn. Stat. ch. 507.

Practical legal effects

• If the loan was signed only by the co-owner who holds a share, the lender usually has a lien against that co-owners undivided share. The lender does not automatically own or have a lien on the other co-owners shares unless those owners signed or the lender obtained an interest by foreclosure or other court process.
• If the co-owner forged signatures or otherwise had no authority to encumber the interest (for example, a personal representative of an estate who acted outside court authority), the mortgage may be voidable and you can challenge it in court.
• If the property has homestead protections or other statutory restrictions, certain encumbrances may be limited. For background on homestead protections see Minn. Stat. ch. 510.
• If a lender later forecloses, a co-owner who did not sign may still lose the property in a foreclosure sale depending on priorities and whether the lender can foreclose on the whole parcel. Foreclosure procedures are governed by Minnesota statutes; see Minn. Stat. ch. 580.

Common legal remedies you can pursue in Minnesota

If a co-owner encumbers the property without your consent, possible remedies include:

• Challenge the lien or mortgage in court if it was fraudulent, forged, or obtained by false statements.
• File a claim in probate if the property is still part of an open estate and the personal representative exceeded their authority. Minnesota probate law is in Minn. Stat. ch. 524.
• Ask the court for a temporary restraining order or injunction to stop a pending foreclosure or sale while you seek relief.
• Bring a quiet-title or lien-removal action to clear the cloud on title if the lien is invalid.
• Request partition of the property. A partition action can force a sale of the property and divide the proceeds among owners after satisfying liens; see Minnesota statute on partition actions: Minn. Stat. ch. 558.

How the lenders conduct matters

If a lender genuinely relied on the apparent owner(s) and followed industry practices (title search, insurance, proper signatures), courts may protect the lender where it acted in good faith. If the lender ignored clear defects or warning signs, a court may permit the affected co-owners to undo or limit the lien. Determining good-faith purchaser protections involves complicated factual and legal analysis.

Steps to take right away

1. Order an up-to-date title search at the county recorders office so you can see any recorded mortgage, deed, or lien.
2. Contact the lender or loan servicer to learn what was signed, when, and what documentation they relied on.
3. If probate is open, review estate court filings and any authority the personal representative had to encumber property.
4. Document any suspicious conduct, possible forgery, or lack of consent.
5. Talk to a real property attorney about emergency relief (injunction) and your options to remove a wrongful lien or to seek partition.

Note: foreclosure and mortgage law are complex and fact-specific. Foreclosure procedures and the rights of lenders and co-owners are governed by Minnesota statutes and case law; see Minnesotas foreclosure statutes: Minn. Stat. ch. 580.

Timing and risk

Act quickly. Once a mortgage is recorded and the lender begins foreclosure, options narrow and legal costs grow. If you wait, the lender may obtain foreclosure judgment or a court-ordered sale, which can extinguish some or all owner rights depending on priorities.

Helpful Hints

• Verify title first: a county recorder search will show any recorded mortgages or liens.
• Save copies of all documents you have or receive about the loan or refinance.
• Ask the lender for a copy of the loan file and any signed documents; lenders often provide payoff statements and copies on request.
• If probate is involved, review the personal representatives authority and inventory; you can challenge unauthorized encumbrances through probate court.
• Consider mediation or negotiation with the co-owner and lender if quick settlement avoids costly litigation.
• Dont sign or agree to anything without reviewing it with an attorney representing your interests.
• If you suspect fraud or forgery, contact local law enforcement in addition to civil remedies.

Where to look up the statutes used above: Minnesota statutes are available at the Office of the Revisor of Statutes: https://www.revisor.mn.gov/statutes/.

Disclaimer

This information is educational only and does not create an attorney-client relationship. It is not legal advice. For advice about your specific situation, consult a licensed Minnesota attorney who handles real estate, probate, or litigation matters.