Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance on your specific situation.
Detailed Answer
In Indiana, when two or more people co-own real property—whether as tenants in common or joint tenants—a co-owner who makes improvements may seek reimbursement through an equitable remedy or a partition action. Indiana Code outlines how to recover your contribution when co-owners cannot agree on crediting improvements.
1. Equitable Lien or Accounting
If co-owners disagree informally, you can ask a court to impose an equitable lien on the property or its sale proceeds. You must show:
- You advanced funds or labor to improve the property.
- The improvements increased the property’s fair market value.
- The other co-owner(s) benefited unjustly by your expenditure.
The court can order an accounting of expenses and fix a lien in the amount of your improvement costs plus interest.
2. Filing a Partition Action
Under Indiana Code § 32-17-2-1, any co-owner may file a partition suit. You can ask the court to either divide the land (partition in kind) or sell it (partition by sale). Key steps include:
- Prepare a petition identifying all co-owners and the property description.
- Attach an itemized statement of improvements and liens under IC § 32-17-2-3.
- Serve each co-owner. The court issues process and schedules a hearing.
- If the court orders sale, it calculates net proceeds and credits your improvement costs before distributing funds.
In a partition sale, the clerk sells the property at public auction. After paying mortgage liens, taxes, and selling costs, the clerk credits each co-owner’s share per ownership interest and then deducts the approved improvement costs of the co-owner who provided them.
3. Documentation and Valuation
To maximize your recovery, keep thorough records:
- Receipts for materials and labor.
- Invoices showing dates and amounts.
- Photographs of the property before and after improvements.
- Appraisal or contractor estimates verifying increased value.
Helpful Hints
- Communicate early: Obtain written consent from co-owners before making major improvements.
- Document every expense: Even small repairs add up in a partition accounting.
- Seek informal resolution: Mediation can save time and legal fees.
- Consult a probate or real estate attorney: They can guide you through Indiana’s partition statutes.
- Know your deadlines: In partition actions, timelines for filing statements and objections are strict.