South Carolina: If a Co-Tenant Takes a Home Equity Loan or Refinances Without Your Approval

Short answer

Under South Carolina law, a co-tenant can generally mortgage or refinance only the undivided share they own. A mortgage placed by one co-tenant typically creates a lien against that co-tenant’s share—not an immediate, complete lien on the entire property. However, a lender who forecloses on that lien can acquire the mortgagor’s share and then may pursue remedies (including seeking partition or forcing a sale) that effectively risk the whole property. If the person who obtained the loan did not have authority to encumber the property (for example, the property is subject to a will, trust, or administration where only an executor or administrator may act), you may have grounds to challenge the loan or the encumbrance in court.

How ownership form matters

Which ownership form applies controls rights and remedies:

• Tenants in common (common for inherited property): Each owner holds an individual, transferable share. A co-tenant may mortgage or sell only that share.
• Joint tenants: Joint tenancy typically includes the right of survivorship. Whether a single joint tenant can mortgage without the others depends on how title and deeds were drafted; often one joint tenant still only controls their interest.
• Tenancy by the entirety (between married spouses): One spouse usually cannot encumber the property without the other spouse’s consent.

For more on property law topics in South Carolina, see the South Carolina Code, Title 27 (Property): https://www.scstatehouse.gov/code/title27.php.

What actually happens when one co-tenant signs a mortgage or refinances without your approval

1. The mortgage attaches to that co-tenant’s undivided interest. Lenders typically record the mortgage in the county land records. That recorded lien gives notice to the world of the mortgagee’s claim against the mortgagor’s share.
2. The lender may foreclose only on the mortgagor’s interest. If foreclosure occurs, the sale will generally transfer the mortgagor’s share—not automatically your share. But a purchaser at foreclosure can gain the mortgagor’s interest and may then seek to partition the property or buy out co-owners.
3. A foreclosure or sale can affect the whole property in practice. If the purchaser at a foreclosure sale obtains the mortgagor’s share and wants clear control, that purchaser can ask the court for a partition (division of the property) or a forced sale. A court-ordered sale can convert the undivided interests into cash, which affects the other co-tenants’ possession and ownership.
4. If the signer lacked authority, the encumbrance can be challenged. For example, if the property is controlled by a probate estate, a trust, or a will that requires an executor, trustee, or co-owner consent, a mortgage recorded without proper authority may be voidable. You may be able to seek cancellation of the recorded mortgage or damages for fraudulent or unauthorized encumbrance.

Common legal remedies in South Carolina

If a co-tenant obtains a home equity loan or refinance without your approval, common legal responses include:

• Request a copy of the loan documents and recording. Confirm what was recorded with the county register of deeds.
• Talk to the lender. If the lender ignored title or probate requirements, it might pause action while it re-checks title. Lenders may also have internal remedies when loans are made on incomplete or defective title information.
• Challenge the mortgage in court. If the co-tenant lacked authority (e.g., mortgage by a non-authorized executor, fraud, forged signature), you can ask a court to cancel (quiet) the cloud on title or to declare the mortgage void.
• Seek a partition action. Under South Carolina civil procedure, a co-tenant can ask the court to partition the property—either by dividing it (if possible) or by ordering a sale and dividing proceeds. A partition sale can fully resolve competing ownership claims: see South Carolina civil procedure rules and cases for partition actions. For general civil statutes see: https://www.scstatehouse.gov/code/title15.php.
• Negotiate buyout or settlement. You may be able to negotiate with the borrowing co-tenant or the lender to buy out the mortgaged share or refinance the mortgage to remove the cloud on title.

Practical steps to take right away

1. Check the county land records for any recorded mortgage or deed: get copies of the mortgage, note, and any related documents.
2. Ask the co-tenant for loan paperwork and proof of authority (if they claim to be acting as an executor, trustee, or agent under a power of attorney).
3. Contact the lender and explain you are a co-owner; ask what title evidence the lender relied on before advancing funds.
4. Do not ignore a foreclosure notice. If you receive a notice of default or foreclosure, contact an attorney immediately to learn about possible defenses or redemption rights.
5. Consider a demand letter from an attorney to the co-tenant and to the lender asking to rescind the loan if it was made without authority or by fraud.
6. If necessary, file a quiet title action and/or a partition action to clear title or force a sale and division of proceeds.

Hypothetical example

Two siblings inherit a house as tenants in common. Sibling A signs a home equity loan using only their name and records a mortgage. Sibling B did not sign and did not receive loan proceeds. If A defaults and the lender forecloses, the lender can foreclose only against A’s share. The purchaser at foreclosure gets A’s share and might later force a partition sale of the entire house. Sibling B can challenge any mortgage that was recorded without proper authority (for example, if A was acting under an estate-related restriction) or seek to negotiate a buyout to avoid a forced sale.

Helpful hints

• Record searches are your friend. Check the county register of deeds to see exactly what is recorded against the property.
• Don’t wait for a foreclosure notice—address recorded liens promptly.
• If the property is in probate or trust, verify who has authority to encumber the property before accepting that a mortgage is valid.
• Preserve evidence. Keep copies of communications, deeds, loan documents, and any written authorizations or denials of consent.
• Consider mediation or buyout talks before litigation; partition actions are often costly and can result in a forced sale at market conditions you may not like.
• Work with a lawyer experienced in South Carolina property and probate law to evaluate title, challenge improper encumbrances, or pursue partition/quiet title remedies. For general information on South Carolina property statutes, consult: SC Code Title 27.