Detailed answer — how South Carolina law treats carrying costs

This question comes up most often in three common situations: (1) two or more co-owners (tenants in common or joint tenants) sell property, (2) spouses sell or divide marital real estate during divorce, or (3) a court orders a partition sale. South Carolina courts will analyze who paid what, whether payments were made from separate or marital funds, any agreement between the parties, and equitable factors to determine whether a paying party gets credit or reimbursement from sale proceeds.

Co-owners (tenants in common or joint tenants)

If you and someone else own property together, each owner is generally entitled to a share of the net sale proceeds proportional to ownership unless you agree otherwise. If one owner paid mortgage payments, property taxes, insurance, or necessary repairs, courts often allow an accounting so the paying owner receives credit for reasonable expenditures that preserved the property’s value. That credit can reduce the other owner’s share or increase the payer’s share of the sale proceeds. The exact result depends on:

• whether there was an agreement (written or oral) about who pays what;
• whether the payments were for essential carrying costs or for personal benefit;
• whether funds used were separate or belonged to one owner; and
• how a court finds fairness in the specific case.

Divorce and marital property division

In a divorce, South Carolina uses an equitable distribution standard: marital property is divided equitably (not necessarily equally). The court considers many factors when dividing assets, including direct credits or reimbursements where one spouse used separate funds to pay obligations on property or improved property with separate funds. See Title 20, Chapter 3 on domestic relations for statutory guidance. The controlling statute that describes equitable distribution and relevant factors is in the South Carolina Code: S.C. Code Ann. § 20-3-620.

Partition actions (court-ordered sale when co-owners disagree)

If a co-owner files for partition in South Carolina, the court may order sale of the property and an accounting among the owners. The partition process can allow credits to the owner who paid taxes, mortgage installments, or necessary repairs, especially if those payments preserved the property’s value or paid joint obligations. South Carolina’s statutes on partition provide the legal framework for these actions: Title 15, Chapter 49, South Carolina Code.

What counts as recoverable carrying costs?

Typical carrying costs that a court may consider for reimbursement or credit include:

• Mortgage principal and interest payments (particularly principal and payments that prevented foreclosure);
• Real property taxes; insurance premiums required to protect the property; and
• Necessary repairs or maintenance that preserved or increased marketability (not cosmetic upgrades for personal preference).

What courts will look for

Key items courts use when deciding whether to give a credit or reimbursement:

• Clear documentation (bank statements, canceled checks, mortgage statements, tax bills, invoices, and receipts).
• Evidence who benefited from the payment (did the payment protect joint value?).
• Whether payments were voluntary or required (e.g., to avoid foreclosure).
• Any written agreement between owners or spouses allocating payments.
• Timing — when payments were made relative to ownership changes or separation.

Practical examples (hypotheticals)

Example 1 — Co-owners: Two siblings own a rental house as tenants in common. One sibling covers mortgage and tax payments for two years while the other lives out of state. At sale, the paying sibling can ask the court or negotiating co-owner for an accounting and credit for those payments, with proof.

Example 2 — Divorce: A spouse used separate inheritance funds to pay the mortgage after separation. In the divorce, the paying spouse can request reimbursement or a credit under South Carolina’s equitable distribution principles; the court will consider that payment among other factors under the statutory scheme: S.C. Code Ann. § 20-3-620.

Steps to take if you want a credit or reimbursement

1. Collect documentation: mortgage statements, cancelled checks, tax bills, insurance invoices, repair receipts, and bank records.
2. Check for written agreements (deeds, co-ownership agreements, prenups or separation agreements) that change default rules.
3. Try to negotiate with the other owner(s) in writing. An agreed accounting and settlement is faster and less expensive than litigation.
4. If negotiation fails, consult an attorney about seeking an accounting, partition, or raising the issue in divorce proceedings.

Which remedies are available?

Possible remedies include:

• An accounting and offset: the paying party receives credit against the gross proceeds before distribution.
• Reimbursement from the other owner(s) for their share of the payments.
• An adjustment in the division of proceeds in divorce by court order under equitable distribution rules: see S.C. Code Ann. § 20-3-620.

When you probably will not get a credit

A court may deny reimbursement or a credit if payments were voluntary personal expenditures that did not preserve or increase joint property value, or if the paying party cannot document payments. Similarly, if parties agreed a certain sharing arrangement that allocated carrying costs differently, the court may enforce that agreement.

Helpful Hints

• Keep every receipt, bank statement, mortgage coupon, tax bill, and insurance invoice related to the property. Detailed records are the single most important evidence.
• Get written agreements. Even a simple email agreeing to who will pay what can matter later.
• Distinguish between necessary expenses (taxes, insurance, mortgage to avoid foreclosure) and optional improvements when claiming credits.
• If you are separated or divorcing, preserve separate-fund documentation (e.g., inheritance checks) to show the source of funds.
• Try mediation or negotiated settlement before filing court actions; litigation is costly and outcomes vary with facts and judges’ discretion.
• Talk to a South Carolina real estate or family law attorney early. They can evaluate whether an accounting, partition, or equitable distribution claim best fits your situation.