Detailed Answer
In New Jersey, co-owners can recover carrying costs—such as mortgage interest, property taxes, insurance premiums, and maintenance—through an equitable accounting or partition action. New Jersey’s partition statute (N.J.S.A. 2A:62-1 et seq.) empowers the court to require reimbursement of advances and expenses. Below are the key steps to calculate and recover these costs:
1. Identify Carrying Costs
Compile every expense you’ve paid on behalf of the property, including:
- Mortgage interest
- Property taxes
- Homeowners insurance
- Repairs and routine maintenance
- Homeowners association dues
2. Gather Documentation
Obtain invoices, bank statements, cancelled checks and receipts for each expense. Clear, organized records are essential to support your claim.
3. Determine Ownership Shares
Ownership percentage usually follows the deed or title. If you and your co-owner each hold 50%, you split costs equally. If percentages differ, use those figures for pro rata calculations.
4. Calculate Pro Rata Share
Add all carrying costs for the relevant period. Multiply the total by the co-owner’s ownership percentage. For example, if total costs are $6,000 and you each own 50%, each share is $3,000.
5. Send a Demand Letter
Draft a formal demand for reimbursement. Include a detailed breakdown of expenses, the owed amount, and a payment deadline. Send via certified mail with return receipt.
6. File for Partition or Accounting
If your co-owner fails to reimburse, you may file in Chancery Division—Equity Part for an action for partition and accounting. The court can order a sale and direct distribution of proceeds reflecting expense reimbursements. See N.J.S.A. 2A:62-1 et seq..
7. Recover Interest
You may also claim pre-judgment interest on unpaid amounts from the date of your demand letter at the legal rate under N.J.S.A. 2A:42-1.
Helpful Hints
- Maintain a timeline of payments to track interest accurately.
- Verify co-owner percentages via title search or deed.
- Use spreadsheets to summarize expenses and shares.
- Consider mediation before filing suit to save on legal fees.
- Retain all certified-mail receipts as proof of demand.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed New Jersey attorney for advice specific to your situation.