Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
When co-owners of real property in Pennsylvania enter a joint sale agreement, one party may advanced ongoing expenses—known as “carrying costs”—until closing. Under Pennsylvania’s Partition Law (68 Pa.C.S. § 2501 et seq.), a co-owner who pays more than their share of necessary costs may seek contribution or an accounting in court.
1. Identify Carrying Costs
“Carrying costs” include expenses required to preserve and market the property, such as:
- Mortgage interest
- Property taxes and assessments
- Homeowner’s or hazard insurance
- HOA or condominium fees
- Utilities, repairs, and maintenance
2. Calculate Each Owner’s Share
Verify each co-owner’s ownership percentage from the deed or agreement. Multiply total carrying costs by that percentage to find each party’s pro rata amount. For example, if Owner A holds a 60% interest and total taxes are $5,000, Owner A’s share equals $3,000.
3. Determine Overpayment
Subtract the co-owner’s pro rata share from what you actually advanced. The difference is the reimbursement amount due.
4. Document Thoroughly
Gather invoices, receipts, bank statements and any correspondence. Complete records strengthen your demand for payment or court filing.
5. Recovery Options
- Amicable Settlement: Send a formal demand letter detailing the payments and attach supporting documents.
- Partition Action: File in the county where the property sits under 68 Pa.C.S. § 2501 et seq.. The court orders a sale and equitably credits each co-owner for contributions.
- Equitable Contribution Claim: If you don’t wish to partition property, file a separate civil action seeking an accounting and contribution. Be mindful of the 4-year statute of limitations under 42 Pa.C.S. § 5525.
Helpful Hints
- Maintain a shared expense log from the outset.
- Obtain written confirmation of ownership percentages.
- Review your joint sale agreement for contribution or cost-sharing clauses.
- Act promptly to preserve rights under the statute of limitations.
- Consider mediation to reduce time and litigation costs.