Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
When two or more people own real estate together in New Hampshire, they share the “carrying costs” of that property. Carrying costs typically include mortgage interest, property taxes, insurance premiums, utilities, maintenance, and homeowners’ association fees. If one co-owner advances these expenses, they can seek reimbursement from the other co-owner according to each person’s ownership interest.
1. Review Your Joint Sale Agreement and Ownership Shares
First, check your written joint sale agreement (if any) to see how you agreed to split costs. If the agreement is silent, New Hampshire law assumes each co-owner bears expenses in proportion to their ownership share (e.g., a 60/40 split for 60% and 40% owners).
2. Itemize and Document All Carrying Costs
- Gather invoices and statements for each expense paid (tax bills, mortgage statements, insurance invoices, utility bills, repair receipts).
- Note the date and payor for every payment.
3. Calculate Each Co-Owner’s Share
Use this formula for each cost type:
Co-owner’s Share = Total Cost × Co-owner’s Ownership Percentage
Example: You pay $4,000 in property taxes and own 50%. The other co-owner owes you $2,000.
4. Demand Reimbursement in Writing
- Prepare a detailed statement listing each expense, total amount, your share, and the other party’s share.
- Send the statement via certified mail or email, requesting payment within a set deadline (e.g., 30 days).
5. Enforce Your Rights if the Co-Owner Refuses to Pay
If the co-owner does not reimburse you, consider the following options:
- Small Claims Court – For claims under $25,000. New Hampshire’s small claims process is faster and less formal.
- Civil Action for Breach of Contract – File in Superior Court for reimbursement under your joint sale agreement.
- Partition Action – Under RSA 547:1, a co-owner can petition to divide or sell the property. If a court orders a sale (RSA 547:3), it may award allowances for carrying costs one co-owner paid on behalf of the other (RSA 547:4).
In a partition action, the court apportions sale proceeds after deducting mortgages, taxes, and other necessary expenses. The court credits the paying co-owner before dividing the balance.
Helpful Hints
- Maintain a dedicated spreadsheet to track dates, amounts, and receipts.
- Include a carrying-cost clause in any future joint sale agreement to avoid disputes.
- Send periodic accountings so co-owners stay informed about outstanding balances.
- Consider mediation if communication breaks down—it can save time and legal fees.
- Consult a New Hampshire real estate attorney for complex disputes or large claims.