Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
1. Understanding Carrying Costs
When two or more people own real property in New Mexico and agree to sell it together, each co-owner typically shares ongoing expenses—known as carrying costs—until the sale closes. Common carrying costs include:
- Property taxes
- Mortgage interest
- Homeowner’s insurance
- HOA dues or assessments
- Maintenance and repairs
2. Calculating Your Share
To calculate your co-owner’s share, follow these steps:
- List all carrying costs paid during the holding period (e.g., January–June).
- Determine each owner’s ownership percentage (often based on deed shares).
- Multiply total costs by the other co-owner’s percentage. That figure equals what you can demand back.
Example: Two owners each hold 50%. Total carrying costs from January to June equal $6,000. The non-paying co-owner’s share is 50% of $6,000 = $3,000.
3. Legal Basis for Contribution
Under New Mexico’s partition statutes, a co-owner who pays more than their share may seek contribution. The court can order reimbursement of necessary and reasonable expenses, including taxes and insurance. See NMSA 1978, 6 42-8-15 (contribution for taxes and expenses) and 6 42-8-16 (recovery in partition sale). For statute text, visit NMSA 1978, Section 42-8-15 and Section 42-8-16.
4. Recovering Costs from a Co-Owner
Follow these steps to recover your carrying costs:
- Send a written demand summarizing expenses, ownership percentages, and the amount due. Keep copies of receipts.
- Attempt mediation or negotiation. A mediated agreement can save time and fees.
- If negotiation fails, file a partition action in district court. Include a request for an accounting of advances and a contribution order.
- Use the court’s order to obtain a judgment. After judgment, enforce it through garnishment or property liens if needed.
Helpful Hints
- Document every payment: Keep invoices, bank statements, and cancelled checks.
- Review your joint sale agreement: Some contracts require notice periods or specific procedures.
- Consider insurance and taxes first: Courts often view them as “necessary expenses.”
- Use mediation early: It reduces legal costs and preserves relationships.
- Consult a real estate attorney: They can file the partition action and prepare your accounting.