Detailed Answer
In South Dakota, co-owners share all carrying costs—mortgage interest, property taxes, insurance, and maintenance—according to their ownership interests. When one co-owner advances more than their share, they may seek reimbursement through contract or partition proceedings.
1. Identify and Document Carrying Costs
- List each expense: mortgage interest, taxes, insurance, utilities, repairs.
- Gather invoices, statements, bank records.
- Note payment dates and amounts paid by each co-owner.
2. Allocate Costs by Ownership Interest
Multiply total costs by each co-owner’s percentage interest. For example, if two co-owners each hold 50% of a $200,000 property with monthly interest of $500 and insurance of $100, total six-month carrying costs are:
- Interest: 6 × $500 = $3,000
- Insurance: 6 × $100 = $600
- Total: $3,600
Each co-owner’s share (50%) = $1,800. If one paid the full $3,600, the other owes $1,800.
3. Recovering the Excess Payment
You can recover unpaid shares by:
- Contract Claim: If you have a joint sale or operating agreement, enforce its cost-sharing terms in court.
- Partition Action: Under SDCL Chapter 43-31 (https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Chapter&Statute=43-31), a co-owner who advances more than their share may seek contribution. The court orders an accounting of payments and allocates reimbursements among parties.
- Settlement Negotiation: Demand payment in writing, outlining documented costs and owed share. Use certified mail or email with read receipts.
4. Court Accounting and Contribution
In a partition suit, the court follows SDCL 43-31-32 (Contribution Among Co-Owners) to adjust equities. After accounting for rents, profits, and expenses, the court orders one co-owner to reimburse the other for the excess carrying costs.
Disclaimer: This article is for educational purposes and does not constitute legal advice. Consult a licensed South Dakota attorney for guidance.
Helpful Hints
- Maintain a detailed spreadsheet of all expenses, dates, and payers.
- Clarify ownership percentages in writing before purchase.
- Agree in writing on how to split carrying costs to prevent disputes.
- Send formal payment requests and keep proof of delivery.
- Consult an attorney early for drafting or enforcing co-ownership agreements.