Detailed Answer
This section explains how to calculate your share of carrying costs and recover them from your co-owner in a joint sale agreement under Rhode Island law.
1. Understand Carrying Costs
Carrying costs include mortgage payments, property taxes, insurance premiums, utilities, maintenance fees, and any other expenses required to hold the property. Each co-owner typically owes a proportionate share based on ownership percentage or as defined in your joint sale agreement.
2. Track and Document Expenses
Keep records of all payments related to the property. Save invoices, bank statements, and receipts. Use a spreadsheet to list the date, type, amount, and purpose of each expense. Note each co-owner’s share.
3. Calculate the Pro Rata Share
Multiply the total carrying costs by the co-owner’s ownership percentage. For example, if the total mortgage and taxes equal $12,000 per year and co-owner B owns 25%, B’s share equals $3,000.
4. Negotiate with Your Co-Owner
Present the documented expenses and calculations. Propose reimbursing you at closing or adjusting your share of the sale proceeds to reflect the unpaid carrying costs.
5. Use Rhode Island Partition Statutes If Negotiations Fail
If your co-owner refuses to contribute, you may file a partition action under R.I. Gen. Laws § 34-11-1 (www.rilegislature.gov/Statutes/TITLE34/Pages/34-11-1.aspx). In a partition, the court can allocate carrying costs and order contribution. Under R.I. Gen. Laws § 34-11-23, the court may award reimbursement for rents, profits, and costs paid on behalf of the other co-owners (www.rilegislature.gov/Statutes/TITLE34/Pages/34-11-23.aspx).
Helpful Hints
- Review your joint sale agreement for terms on cost sharing and dispute resolution.
- Consult a CPA or real estate accountant to ensure accurate calculations.
- Use certified mail or email with read receipts when sending demand letters.
- Consider mediation before suing; it’s faster and less costly.
- Keep all communications professional and in writing to create a clear record.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney in Rhode Island to address your specific situation.