Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified Georgia attorney for guidance specific to your situation.
Understanding Carrying Costs in Joint Sale Agreements
When two or more people own real estate together, they each share the burden of ongoing expenses—or “carrying costs.” These costs typically include mortgage payments, property taxes, insurance premiums, and maintenance fees. Under Georgia law, a co-owner who fronts more than their share may demand reimbursement through an accounting action or partition suit.
What Are Carrying Costs?
Carrying costs are the expenses required to hold and maintain property until it sells. Common items include:
- Mortgage principal and interest
- Property taxes
- Hazard and liability insurance
- Repairs and routine maintenance
Calculating Your Co-Owner’s Share
Follow these steps to quantify what your co-owner owes:
- Gather documentation. Collect mortgage statements, tax bills, insurance invoices, and repair receipts covering the period in question.
- Sum total costs. Add all carrying costs you paid in full.
- Determine ownership percentages. If each co-owner holds equal undivided interests, divide costs by the number of owners. For unequal interests, divide costs proportional to each owner’s share.
- Calculate the co-owner’s portion. Multiply total costs by the co-owner’s ownership percentage. Subtract any payments they made directly toward those costs.
Recovering Carrying Costs Under Georgia Law
Georgia law provides two main remedies to recover unpaid carrying costs:
1. Accounting in a Partition Action
Under O.C.G.A. § 44-8-61, a co-owner may file a partition suit in superior court and request an accounting of contributions. The court can order one owner to reimburse the other for excess payments before dividing or selling the property.
O.C.G.A. § 44-8-61
2. Contribution Claim for Repairs and Encumbrances
O.C.G.A. § 44-6-111 allows an owner who pays off a mortgage, tax lien, or necessary repairs to seek contribution from co-owners. You must file an action in superior court and prove that payments preserved the property’s value.
O.C.G.A. § 44-6-111
Practical Steps to Obtain Reimbursement
- Send a demand letter. Outline expenses, attach supporting documents, and request payment within a set period (e.g., 30 days).
- Negotiate a settlement. Offer a payment plan or adjust sale proceeds to satisfy the debt.
- File in superior court. If negotiations fail, file a partition action or contribution claim in the county where the property sits.
- Attend mediation or trial. Courts often require mediation first. Present your accounting records to prove the amount owed.
Helpful Hints
- Keep detailed, dated records of all expenses and communications with your co-owner.
- Calculate carrying costs monthly to prevent large, hard-to-justify sums.
- Include interest when demanding reimbursement, if justified by agreement or statute.
- Consider property management to track maintenance costs automatically.
- Consult an attorney before filing suit to ensure you meet procedural requirements.