How Tennessee courts treat mortgage, property tax, and carrying-cost payments by one co-owner

Short answer: Whether you can recover mortgage, property taxes, insurance, repairs, or other carrying costs from sale proceeds depends on two things: (1) whether those costs were secured by the property (liens that must be paid from sale proceeds), and (2) whether a court or the co-owners order an equitable accounting or contribution among co-owners. Tennessee’s partition and equity principles allow a co-owner who paid shared expenses to seek credit or reimbursement, but the exact result depends on the title and lien situation, the type of expense, and the proof you bring.

Detailed answer — how this works in Tennessee

1. Start with liens and obligations that are paid from proceeds first

If the property sale produces proceeds, secured liens (like a mortgage or tax lien) generally must be paid before owners split the remainder. Practically, that means:

If there is a mortgage or a tax lien on the property, the buyer or closing agent will normally use sale proceeds to pay that lien.
If you personally paid the mortgage but the mortgage remained a lien on the property (the loan was in your name and recorded), the buyer’s or court-ordered sale will pay the mortgage from the proceeds first. That reduces what is available to distribute among owners.
If you paid a mortgage or other debt that was not a lien on the property (for example, a loan you alone signed that does not secure this parcel), the lender cannot automatically grab sale proceeds, but you may have an equitable claim against co-owners for contribution or reimbursement.

2. Partition, accounting, and contribution among co-owners

Tennessee law provides procedures for dividing jointly owned land through a partition action. In a partition or in any dispute between co-owners, a court can order an accounting and apportion expenses or credits so each owner ends up paying their fair share. See Tennessee’s partition statutes for the procedure: Tenn. Code Ann. § 29-27-101 et seq..

Key points courts consider when deciding whether to credit payments to one co-owner:

Did the payment produce a direct benefit to the property (example: property taxes, hazard insurance, repairs that preserved value)? Courts are likelier to allow credit for expenses that protected or enhanced property value.
Was the payment toward principal that reduced a property lien? Payments that reduced principal can increase the owners’ equity and usually support reimbursement claims.
Was the payment interest, late fees, or a non-beneficial personal expense? Courts treat interest and purely personal costs differently — you must document how the expense benefited the property or other co-owners.
Is there a written agreement between co-owners about expense-sharing? An agreement controls if valid and clear.

3. Typical categories and how courts treat them

Mortgage principal payments: If those payments reduced the mortgage that encumbers the property, they typically increase equity in the property and support reimbursement or a credit in a partition accounting.
Mortgage interest: Courts are more likely to treat interest as a carrying cost that may not be fully reimbursable unless the paying co-owner can show the borrower/co-owner benefited and no agreement allocated the expense otherwise.
Property taxes & assessments: Taxes and assessments paid to preserve clear title are generally treated as expenses of ownership and can justify reimbursement or a lien against the proceeds when fairly apportioned.
Insurance and necessary repairs: Necessary repairs and insurance that protect the property’s value are commonly credited. Cosmetic or unnecessary expenses may not be.
Utilities and routine carrying costs: Utilities and routine costs can be credited if they were required to maintain the property and the paying co-owner can prove payment and benefit.

4. How a sale by agreement differs from a partition sale

If co-owners agree to sell and split proceeds, the agreement controls how costs are handled. Put the agreement in writing and list who gets credit for what. If co-owners cannot agree, a partition action may resolve the matter; the court can order a sale and an accounting under the partition statutes linked above.

5. Practical burdens of proof

To obtain credit in a partition/accounting or at closing, you should be able to prove:

Exactly what you paid (cancelled checks, bank records, receipts, mortgage statements showing principal reduction);
Why the expense benefited the property (invoices for repairs, tax bills, insurance declarations);
Who held title and who signed loans or agreements (to show which obligations were personal and which were property liens).

Hypothetical example

Imagine two siblings own a rental house as tenants in common. One sibling (A) pays the $200,000 mortgage and makes $5,000 in repairs, plus $3,000 in property taxes, over two years while the other sibling (B) makes no payments. If they sell, the lender’s mortgage lien is paid from sale proceeds first. At partition or settlement, A can ask the court or B to credit A for the principal portion of mortgage payments that increased equity, the property taxes, and the repairs (to the extent they increased or preserved value). A will need records. The court may award A reimbursement or a larger share of the net proceeds after the lien is paid.

How to protect your right to reimbursement — practical steps

Keep meticulous records: mortgage statements (showing principal vs. interest), cancelled checks, receipts for taxes, insurance, repairs, and invoices.
Check the deed and liens: determine who is on title and which debts are secured by the property. If a mortgage is recorded against the property, closing proceeds typically pay it off first.
Get written agreements: if co-owners plan to share expenses, sign a written cost-sharing agreement that explains how contributions will be credited at sale.
Consider a partition action or mediation early: if co-owners disagree, a partition action allows the court to sell and allocate proceeds and to order an accounting. See Tenn. Code Ann. § 29-27-101 et seq.: Tenn. Code Ann. § 29-27-101.
Talk to a Tennessee real estate or probate attorney if the situation involves family property, decedents’ estates, or complicated liens.

Helpful hints

Document everything now — detailed records make an accounting far easier and more persuasive.
Distinguish principal from interest — principal payments increase equity and are easier to recover; interest and late fees are treated differently.
Confirm whether the mortgage is on the property title — recorded liens get first priority from sale proceeds.
If co-owners disagree, request an accounting in a partition action rather than relying on informal promises.
Use mediation first — it’s often faster and less costly than litigation and can yield a clear written split of proceeds.
For property-tax questions and liens, the Tennessee Department of Revenue provides guidance: Tennessee Property Tax (TN Dept. of Revenue).

Bottom line: You may be able to include (or be credited for) mortgage principal, property taxes, insurance, and necessary repairs from sale proceeds, but you must sort out recorded liens, who signed loans, and document the payments. Tennessee partition rules allow courts to order equitable credits and reimbursements, so keep records and consider a written agreement or a partition/accounting action if co-owners cannot agree.

Disclaimer: This article explains general Tennessee law and is for educational purposes only. It is not legal advice. For advice about your specific situation, contact a licensed Tennessee attorney.