Detailed Answer: Calculating and Recovering Carrying Costs in Vermont
Disclaimer: This information is for educational purposes only and does not constitute legal advice.
1. Understand What “Carrying Costs” Include
In a joint sale agreement, carrying costs refer to expenses you incur to maintain the property while it’s on the market. Typical items include:
- Property taxes
- Mortgage interest
- Insurance premiums
- Utilities (water, sewer, electricity)
- Maintenance and repairs
Each co-owner pays a share of these costs proportional to their ownership interest unless you agree otherwise.
2. Calculate Your Co-Owner’s Share
- Gather Records. Compile invoices, statements and receipts for all expenses.
- Determine the Timeframe. Identify the period when costs were incurred: from listing date to sale date (or present if unsold).
- Apply Ownership Percentage. If you own 60% and your co-owner owns 40%, multiply total carrying costs by 40% to find their share.
- Add Any Agreed Fees. If your agreement allows interest on late payments, calculate interest at the agreed rate from the date each expense was due.
3. Demand Reimbursement from Your Co-Owner
Follow these steps to recover costs without litigation:
- Send a Written Demand. Include a detailed accounting of expenses and a deadline (e.g., 30 days).
- Include Supporting Documents. Attach copies of invoices, bank statements and your calculation worksheet.
- Offer to Mediate. Propose mediation or settlement talks to avoid court.
4. File a Partition Action if Negotiation Fails
If your co-owner refuses to reimburse you, consider a partition action under Vermont law. In a partition lawsuit, the court can:
- Order sale of the property
- Allocate net proceeds after reimbursing all carrying costs
- Award you a lien or credit for your share of the costs
A partition action follows 27 V.S.A. § 754 (apportionment of costs) and related provisions in Chapter 9 of Title 27.
Helpful Hints
- Keep Detailed Records: Store all invoices and bank records in a dedicated folder.
- Review Your Agreement: Check your joint sale contract for clauses on cost sharing and interest.
- Consult Early: Talk with a real estate attorney before costs mount.
- Consider Small Claims: You may recover smaller amounts in Vermont Small Claims Court (up to $5,000).
- Mind Deadlines: Meet Vermont statute of limitations for contract actions (six years under 12 V.S.A. § 511).
- Explore Mediation: Local courts often offer free or low-cost mediation services.