Detailed answer — how this works in South Dakota

This answer explains the typical legal pathway when multiple owners (tenants in common or joint tenants) sell a property and one owner asks the other to produce mortgage payoff statements and receipts for repairs before splitting the sale proceeds.

1. Mortgages and liens are paid from sale proceeds first

When real property is sold, any valid recorded liens (including mortgages) attach to the property. A title company or closing attorney will typically require payoff statements for any mortgage or lien before releasing net proceeds. In practice, mortgage payoffs are paid from the sale proceeds at closing so lenders remain protected and the buyer receives clear title. For state statutes and the South Dakota codified laws, see the South Dakota Codified Laws (searchable statutory code): https://sdlegislature.gov/Statutes/Codified_Laws.

2. Repairs and improvements: when receipts matter

If one co-owner paid for repairs or improvements, that owner commonly asks for reimbursement or an adjustment when proceeds are divided. Under equitable principles recognized in South Dakota, a co-owner who pays for necessary repairs or mortgage payments that benefit the property may be entitled to credit against their share, but they should be able to prove the payments with documentation (invoices, receipts, canceled checks).

3. Requesting documentation informally and formally

• Start with a written demand asking the co-owner to produce mortgage payoff statements, lien releases, receipts, cancelled checks or bank statements documenting payments, and invoices for repairs.
• If the co-owner refuses, you can ask the title/closing agent to withhold distribution of proceeds until payoffs and liens are resolved. Title companies routinely require payoff letters for recorded mortgages and will not disburse funds until obligations are cleared.
• If the co-owner still refuses or if there is a dispute about credits, you can file an action in court (usually a partition action or an accounting action). In that proceeding you can ask the court to compel production of documentation and to order equitable adjustments to the net proceeds.

4. Partition actions and accounting in South Dakota

If co-owners cannot agree, a partition action asks the court to divide or sell the property and to allocate proceeds. In a partition or related lawsuit the court can:

• Order an accounting of expenses, mortgage payments, rents, and repairs;
• Allocate credits for mortgage payments or for repairs supported by receipts;
• Order that disputed portions of proceeds be held in escrow until document production or further court order;
• Preserve rights to reimbursement for a co-owner who advanced money for mortgages or necessary repairs.

To locate the relevant statutory provisions and procedures (civil actions, partition remedies, and real property liens) consult the South Dakota Codified Laws: https://sdlegislature.gov/Statutes/Codified_Laws.

5. Burden of proof and what documents are persuasive

The co-owner claiming a right to repayment or credit should provide:

• Mortgage payoff statements or bank records showing mortgage payments;
• Receipts, invoices, contractor agreements, canceled checks, or credit card statements that show payments for repairs;
• Evidence the repairs were necessary and benefited the property (photos, contractor statements); and
• Any recorded liens or releases connected to those repairs (e.g., mechanic’s liens).

Absent proof, the court or a neutral closing agent may refuse to give the paying co-owner credit. Conversely, if the payments are proven and were necessary or agreed to, the payer is more likely to receive reimbursement or a deduction from their share.

6. Practical closing options

• Escrow holdback: the buyer, seller, and closing agent can agree to hold part of proceeds in escrow while documentation is produced or disputes resolved.
• Interpleader: if two owners claim the same funds, the closing agent or title company can file an interpleader or decline disbursement until a court resolves competing claims.
• Title insurance and liens: title searches will reveal recorded mortgages and liens; title companies typically require payoff letters and lien releases before closing.

7. What you can and cannot unilaterally do

You can demand documentation in writing and refuse to agree to distribution until your questions are answered. You cannot unilaterally withhold funds that a title company is ready to disburse under a contract without a legal basis; instead, ask the closing agent to hold funds or file an action asking the court to order an accounting or escrow.

8. Steps to take right now

1. Send a formal written request for mortgage payoff statements, repair receipts, and proof of lien releases. Keep a copy.
2. Ask the title company or closing agent to require payoff letters at closing and to hold disputed funds in escrow if necessary.
3. If the co-owner refuses documentation, consult an attorney about filing for an accounting or partition and asking the court to compel documents and to order appropriate credits.
4. Consider a lien search or hiring a title company to confirm recorded encumbrances before closing.

9. Timing and costs

Bringing a partition or accounting action takes time and costs money. Courts can order temporary relief (an accounting, an escrow, or an injunction) to preserve the parties’ rights while the dispute is decided. If you expect significant disputed credits, getting legal advice early is prudent.

Helpful Hints

• Always make document requests in writing and keep records of all communications.
• Use a title company for closings; they will require payoffs and can hold disputed funds in escrow.
• Keep originals of receipts, canceled checks, and contractor agreements; scanned copies help speed things up.
• Obtain a full title report and payoff statements for any mortgages and recorded liens before final distribution.
• If repairs were performed, try to get contractor affidavits or releases to prevent mechanic’s lien issues.
• If you suspect a co-owner misused funds or refused to pay a mortgage, ask a lawyer about immediate court relief to protect your interest.
• Consider mediation to resolve small disputes quickly and avoid the expense of litigation.