North Dakota – What Happens If a Co-Tenant Refinances or Takes a Home Equity Loan Without My Approval?

You have rights. Under North Dakota property rules, a co-tenant may generally mortgage or refinance only the ownership interest that person actually owns. A co-tenant cannot unilaterally erase or legitimately encumber your separate ownership share without your signature. However, a mortgage or refinance signed by one co-tenant can still create real problems (including a foreclosure sale or clouded title) that can affect the whole property in practice. Read on for how that works and what you can do.

How ownership between co-tenants normally works in North Dakota

When multiple people inherit property together they are often owners as tenants in common (each has an undivided interest) unless the deed or will creates a joint tenancy with survivorship. Tenants in common each own a share that they may sell, transfer, or mortgage. But one co-tenant’s dealings generally only bind that co-tenant’s interest; they do not automatically transfer or eliminate the others’ ownership.

For an overview of North Dakota property law, see Title 47 of the North Dakota Century Code: https://www.legis.nd.gov/cencode/titles/47.

What happens if a co-tenant takes a home equity loan or refinances without your approval?

Key points to understand:

• They can encumber only their own interest. A lender that accepts only one co-tenant’s signature generally gets a lien on that signer’s undivided share, not automatically on your share.
• Lenders usually require all owners to sign. Because lenders want a first lien on the whole property, most lenders ask every owner to sign. If a lender accepts only one signature, it may have weaker rights and the lender may be unable to foreclose against the entire property without additional steps.
• Foreclosure can still affect the whole property in practice. If a lender forecloses on the mortgaged share, the foreclosure purchaser acquires that share. That purchaser could later force a partition sale of the entire property to realize the value of the purchased share. A partition sale can result in sale of the whole property at public auction.
• Title can be clouded and selling or refinancing later may be difficult. Even if the loan only affects one share, recorded mortgages and assignments create “clouds” on title. Future buyers or lenders will expect these liens to be resolved.
• Forgery or fraud is illegal. If a co-tenant forged your signature or misrepresented matters to the lender, you may have criminal and civil claims.

Immediate steps you should take

1. Check the public records. Go to the county recorder’s office where the property is located and pull the deed and any recorded mortgage(s) or liens. Note the names, dates, and mortgage amounts.
2. Request loan documents. Ask the co-tenant and/or the lender for copies of the loan paperwork. Lenders sometimes disclose limited information after identity verification.
3. Talk to the lender. If the lender recorded a mortgage that purports to encumber only the signer’s interest, ask what they relied on and whether they recorded any title insurance or owner-signed affidavits.
4. Preserve evidence. Keep copies of recordings, communications, and any proof of your nonconsent (emails, letters, texts).
5. Contact an attorney. If the mortgage is significant, the lender threatens foreclosure, or you suspect fraud, talk to a North Dakota attorney experienced in real property/probate matters right away.

Legal remedies and common actions in North Dakota

Your options will depend on the facts, but common legal remedies include:

• Quiet title / declaratory judgment. Ask a court to declare who owns what interest and to remove an improper lien or cloud on title.
• Injunction. If a foreclosure is imminent and you have strong evidence of fraud or wrongful action, you can seek a court order to stop the sale while the dispute resolves.
• Partition action. Either owner can ask the court to partition the property—meaning divide it physically if practical or order a sale and split the proceeds. In North Dakota, partition actions and remedies are handled through the civil courts; see generally Title 32 for civil procedure and Title 47 for property rules: https://www.legis.nd.gov/cencode/titles/32 and https://www.legis.nd.gov/cencode/titles/47.
• Challenge lender’s rights. If the lender failed to obtain a mortgage on the entire legal estate (for example, obtained only the signer’s interest), you can challenge the lender’s right to foreclose on your share absent additional steps.
• Claims for fraud or conversion. If your signature was forged or the co-tenant misled you or the lender, you may have tort or contract claims against the co-tenant.

Practical examples (hypothetical)

Example A: Two siblings inherit a house as tenants in common (50/50). One sibling signs a refinance alone and the lender records a mortgage against the property. The lender believed it had a first lien on the whole property but only has a valid mortgage against the signing sibling’s 50% interest. If the lender forecloses, the foreclosure sale will transfer that 50% interest; later, a partition action could force sale of the entire house. The non-signing sibling’s interest does not automatically vanish, but their position is at risk and title is likely clouded.

Example B: A co-tenant forges your signature on a mortgage. You can pursue criminal charges for forgery and civil actions to quiet title, void the mortgage, and obtain damages.

When a co-tenant can lawfully refinance or mortgage without your consent

• They can mortgage or transfer their own undivided share.
• If a deed or agreement granted one co-tenant power to act for all owners, that agreement controls—but such an agreement must be clear and usually must be in writing.
• State or court orders (e.g., after probate) can change ownership rights; comply with any final court orders.

How title and priority usually work

North Dakota follows recording rules and lien priority commonly based on the order of recording. A mortgage recorded earlier normally has priority over later-recorded liens. That said, priorities can depend on whether the lender had notice of other interests and on the exact wording of the mortgage. For guidance on recording and property rules see Title 47: https://www.legis.nd.gov/cencode/titles/47.

When to get a lawyer

Consider consulting a North Dakota real property or probate attorney if any of the following apply:

• There is a recorded mortgage or notice of foreclosure.
• Your signature was forged or you suspect fraud.
• You want to challenge or quiet title, seek an injunction, or bring a partition action.
• You plan to sell or refinance and need clear title.

Helpful hints

• Check county records early. Recording information is public and often available online at the county recorder’s website.
• Document communications. Save texts, emails, and letters with the co-tenant and lender.
• Act quickly when you suspect fraud. Delays can limit remedies and allow a lender’s position to strengthen.
• Consider mediation. If the dispute is between family members, mediation can sometimes resolve the issue faster and at lower cost than litigation.
• Get title insurance when you buy or refinance. A good policy can protect against defects in title, including some types of forgery or undisclosed liens.
• Ask a lawyer about partition alternatives. A negotiated buyout of the co-tenant’s interest can avoid the expense and uncertainty of a court-ordered sale.