Detailed Answer
This article explains how co-owners can identify, calculate, and recover carrying costs—such as mortgage interest, property taxes, insurance, and maintenance—when selling jointly owned Indiana real estate. This is not legal advice. Consult a qualified attorney before taking action.
1. Identify Eligible Carrying Costs
Carrying costs are expenses one owner pays to keep the property current. Common items include:
- Mortgage principal and interest
- Property taxes
- Hazard and liability insurance
- HOA fees or assessments
- Routine maintenance and repairs
Track each expense with bank statements, invoices, and receipts.
2. Determine Ownership Shares and Time Period
Indiana courts split property proceeds by ownership percentage, unless partners agree otherwise. If four owners hold equal interests, each owns 25 percent. If ownership differs, use the deed’s percentages.
Next, measure how long each owner held the property during the carrying-cost period. For example, if one co-owner paid taxes for six months, and the other for three, allocate costs pro rata by months.
3. Calculate Each Co-Owner’s Contribution
Use this formula for each expense:
Carrying Cost × Time Held × Ownership Share
Example: Annual tax of $2,400 funded by Owner A for 12 months, with equal 50/50 interests:
2,400 × (12/12) × 0.5 = $1,200 due from Owner B.
4. Attempt Amicable Resolution
Send a written demand letter with a detailed accounting and a copy of supporting documents. Include:
- A clear table of costs, time periods, and calculations
- A deadline for payment (e.g., 30 days)
- Reference to potential partition or contribution action under Indiana Code Title 32, Article 17 (IC 32-17)
Often, a formal demand spurs payment without court involvement.
5. File for Partition and Contribution in Court
If the co-owner refuses to reimburse costs, your next step is a partition action. Indiana law allows the court to equitably adjust proceeds:
- Under IC 32-17-9-2, the court orders a sale and divides net proceeds after deducting sale costs.
- Although “costs of sale” routinely cover commissions and advertising, you can ask the court to include verified carrying costs as equitable adjustments.
In your complaint, detail the unpaid carrying costs, attach your accounting exhibits, and request that the court order contribution from the nonpaying co-owner. The court may hold a hearing to examine records and allocate funds accordingly.
6. Collect Judgment
If the court awards you reimbursement, the judgment becomes enforceable like any civil money judgment. You may use standard collection tools such as liens, garnishments, or writs of execution under Indiana Rules of Trial Procedure.
Disclaimer: This information is for educational purposes only and does not constitute legal advice. Always consult a licensed attorney in Indiana before taking legal action.
Helpful Hints
- Keep organized digital and paper files for all shared-property expenses.
- Use a spreadsheet to automate prorations and summaries.
- Consider mediation before filing a lawsuit to save time and costs.
- Review your joint sale agreement for clauses on expense sharing.
- Consult local county rules for partition procedures and filing fees.