Detailed answer — what happens to mortgages, property taxes, and other carrying costs?

This answer explains, in plain language, how mortgage payments, property taxes, insurance, and other carrying costs are treated when jointly owned real estate in New Hampshire is sold and the sale proceeds are distributed. This is a general, educational explanation — it is not legal advice.

1. Priority: liens and the mortgage lender get paid first

If there is a mortgage on the property, the lender holds a lien on the property. When the property is sold, the mortgage lien must generally be satisfied from the sale proceeds before any co-owner receives their share. That means the outstanding mortgage balance (and any valid lender fees or costs allowed under the mortgage) will usually be paid from the gross sale proceeds, leaving the net proceeds for co-owners.

2. Payments you made toward the mortgage while the property was owned jointly

If you personally paid the mortgage (or part of it) while the property was co-owned, two separate things matter:

• What the lender’s lien requires: The lender’s interest is satisfied from sale proceeds first (see above).
• Your right to contribution from the co-owner(s): After the lender is paid, you may be entitled to reimbursement from the other co-owner(s) for the extra mortgage payments you made on their behalf — but that reimbursement is a claim between co-owners, not a substitute for the lender’s lien.

In other words: the bank gets paid out of sale proceeds first. If you paid more than your share of mortgage payments while the property was held, you may be able to get money back from co-owners either by agreement or by bringing an accounting/contribution claim in court.

3. Property taxes, insurance, and other carrying costs

Necessary carrying costs — property taxes, hazard insurance, municipal assessments, HOA dues, and reasonable urgent repairs — are often treated as expenses of ownership that co-owners can seek contribution for. If you paid those costs alone, you can usually seek reimbursement from the other co-owner(s) for their share, either by mutual agreement or in a court case that asks for an accounting.

Keep in mind some nuances:

• Property tax liens: Unpaid property taxes may create a tax lien against the property. Prioritize payment of tax liens at closing, since tax liens may also attach to sale proceeds.
• Insurance and emergency repairs: Payments that protect the property’s value (insurance premiums, emergency repairs) are more likely to be allowed as reimbursable expenses.
• Nonessential expenses and improvements: Large voluntary expenditures or luxury improvements are treated differently. If an improvement increases the value of the property, you may be able to recover the increased value at sale (or obtain credit in an accounting), but you will not always recover the full cost of an improvement that did not raise value proportionately.

4. How distribution often works in practice

1. Pay mortgage and any other valid liens from sale proceeds.
2. Pay closing costs and costs of sale (real estate commissions, title fees, required repairs funded at closing).
3. The remaining net proceeds are what co-owners divide. When dividing net proceeds, co-owners should account for any payments one owner made for mortgage, taxes, insurance, repairs, or other carrying costs. That accounting can be handled by agreement, or by a court-supervised accounting if co-owners cannot agree.

5. If co-owners disagree: legal options in New Hampshire

If you and the other owner(s) cannot agree on reimbursement or distribution, you can:

• Ask for a written accounting and negotiate a settlement with documentation of the payments you made.
• File a civil action in New Hampshire court for contribution or an accounting among co-owners. You may also consider a partition action if the owners want the property sold and proceeds divided under court supervision.

Actions about division of property and accounts between co-owners are governed by New Hampshire civil procedure and statutory rules. For more information on relevant New Hampshire statutes and how to find them, see the New Hampshire Revised Statutes online: https://www.gencourt.state.nh.us/rsa/html/. To learn about filing civil cases in New Hampshire courts (including actions to partition property or request an accounting), see the New Hampshire Judicial Branch: https://www.courts.state.nh.us/.

6. Evidence you will need

If you expect to ask for reimbursement, keep clear records:

• Mortgage statements, cancelled checks, bank statements showing mortgage or escrow payments you made.
• Receipts or invoices for property taxes, insurance premiums, repairs, HOA dues, and other expenses.
• Communications with co-owners about payment obligations and any agreements (emails, letters, texts).

7. Practical tips and timing

Try to resolve contribution issues before closing. If you plan to withhold funds from closing proceeds for later reimbursement, get that agreement in writing and, ideally, reflected in the closing statement. If you must go to court, be aware that litigation adds time and expense; a negotiated settlement is often faster and less costly.

Reminder and disclaimer: This article explains general principles under New Hampshire law but is not legal advice. Laws and outcomes depend on specific facts, contracts (for example, the deed or any written co-ownership agreement), and court decisions. Consult a New Hampshire attorney to evaluate your situation and any deadlines that might apply.

Helpful Hints

• Before sale, request an itemized closing statement so you can see mortgage payoffs, liens, taxes, and closing costs.
• Document every payment you make for the property; contemporaneous records are the strongest evidence.
• If you paid the mortgage alone for a long period, consider preparing a written settlement proposal showing the math behind your reimbursement request.
• If the other owner refuses to contribute, look into an accounting or partition action — but first check with a lawyer about likely costs and time.
• Talk with the closing agent/title company about any liens (mortgage, tax, judgment) that must be paid at closing; they often can explain what will be paid from sale proceeds and what remains in dispute among owners.
• If there is a written co-ownership agreement or deed language about contributions, follow that agreement — it may control how costs and sale proceeds are allocated.
• Ask a New Hampshire attorney about statute-of-limitations issues — delays in asserting a claim can affect your ability to recover.

Key resources:

• New Hampshire Revised Statutes: https://www.gencourt.state.nh.us/rsa/html/
• New Hampshire Judicial Branch (filing civil cases and court information): https://www.courts.state.nh.us/

If you want, I can list the typical documents to gather for a reimbursement claim or provide a short checklist you can send to a New Hampshire attorney.