Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
When co-owners enter a joint sale agreement under Tennessee law, they often share carrying costs such as property taxes, mortgage interest, insurance and maintenance. To calculate and recover your share from a co-owner, follow these steps:
- Identify Carrying Costs: Gather receipts for taxes, mortgage statements, insurance premiums and maintenance invoices.
- Determine Ownership Shares: Use the percentage interest each co-owner holds (e.g., 50/50) unless your agreement specifies otherwise.
- Allocate Expenses: Multiply each cost by the co-owner's share. For example, a $2,000 tax bill x 50% = $1,000 owed per owner.
- Prepare an Accounting Statement: List each expense, the total paid by each party and the pro rata amount owed.
- Calculate Reimbursement: Subtract what your co-owner paid from their pro rata share to find the amount they owe you.
- Send a Formal Demand: Provide the accounting statement in writing and request payment.
If your co-owner refuses to reimburse you, a partition action can yield an equitable accounting. Tennessee law allows courts to credit an advancing co-owner for taxes and improvements before dividing net sale proceeds. See Tenn. Code Ann. § 29-27-109.
Helpful Hints
- Keep detailed records of all expenses.
- Define each co-owner's percentage interest in writing.
- Check your agreement for reimbursement clauses.
- Use a neutral accountant to prepare the accounting statement.
- Request reimbursement promptly after costs incur.
- Consult a Tennessee attorney early to explore partition or negotiation.