Disclaimer: This article provides general information and does not constitute legal advice. Consult a qualified attorney for advice tailored to your situation.
Detailed Answer
When two or more co-owners agree to sell joint property, each owner owes a proportional share of carrying costs. Carrying costs include mortgage interest, property taxes, insurance premiums, utilities, and maintenance expenses. Under North Dakota law, you can calculate and recover excess carrying costs paid by one co-owner from the other(s).
Legal Basis
- Contribution by Cotenants – N.D.C.C. § 32-03-18 allows a cotenant who pays more than their share of necessary charges (taxes, mortgage interest, insurance) to recover the excess from other cotenants. (N.D.C.C. § 32-03-18)
- Account of Rents and Profits – N.D.C.C. § 32-03-19 requires a cotenant in possession to account for rents and profits against non-possessing cotenants, which can offset carrying costs. (N.D.C.C. § 32-03-19)
- Partition Actions – If co-owners can’t agree, you may file a partition action under N.D.C.C. § 32-18-02. The court can order contributions or sale and distribution of proceeds. (N.D.C.C. § 32-18-02)
Step-by-Step Calculation
- Gather Expense Records: Collect invoices and statements for taxes, insurance, mortgage interest, utilities, and repairs.
- Determine Ownership Shares: Review the deed or agreement to determine each owner’s percentage (e.g., 50/50 or 60/40).
- Compute Total Costs: Add up all carrying costs for the period in question.
- Allocate Shares: Multiply the total by each co-owner’s percentage share.
- Identify Excess Payment: Subtract the paying co-owner’s share from the amount they actually paid to find the excess.
- Calculate Interest: You can add interest from the date of each payment to the date of demand. Use the North Dakota judgment rate (N.D.C.C. § 28-20-01).
Recovery Process
- Send a Written Demand: Detail the calculation, costs, and due date. Keep proof of delivery.
- Negotiate or Mediate: Attempt resolution before filing suit.
- File a Lawsuit: If the co-owner refuses, file in small claims court (claims under $12,000) or district court as an action for contribution under N.D.C.C. § 32-03-18.
- Partition as Needed: In a partition action, request the court require contribution or order sale and distribute net proceeds.
Helpful Hints
- Keep Detailed Records: Save all receipts, invoices, statements, and correspondence.
- Check Statute of Limitations: Contribution claims generally must begin within six years. (N.D.C.C. § 28-01-16)
- Calculate Early and Often: Regularly reconcile payments to minimize disputes.
- Use Certified Mail: Document delivery of demands and correspondence.
- Consider Mediation: A neutral mediator can help preserve relationships and avoid litigation costs.
- Consult an Attorney: For complex cases or large sums, seek legal advice early.