Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
1. Understanding Carrying Costs
“Carrying costs” are expenses incurred while holding property before sale. Common items include mortgage interest, property taxes, insurance premiums, homeowners’ association fees, utilities, and maintenance costs.
2. Reviewing Your Joint Sale Agreement
Examine the joint sale agreement for clauses that address cost sharing. Many agreements specify how to split carrying costs—often equally or in proportion to ownership interests. If your contract sets a formula, follow it precisely.
3. Calculating Your Co-Owner’s Share
- Gather Documentation: Collect mortgage statements, tax bills, insurance invoices, HOA statements, and utility bills covering the holding period.
- Sum Total Costs: Add each category of expense to get a grand total.
- Determine Ownership Percentage: Unless otherwise specified, Washington presumes equal undivided interests. Adjust if your agreement reflects different shares.
- Apply the Formula: Multiply your co-owner’s interest percentage by the total carrying costs. For a 50/50 split, divide the total by two.
4. Sending a Formal Demand
Send a written demand letter via certified mail. Include your calculation, supporting invoices, and a deadline (typically 30 days). Clearly state that failure to pay will lead to legal action.
5. Pursuing Reimbursement in Court
If your co-owner refuses to pay, you can file either a contract claim or a partition action. In a RCW 7.52.040 partition case, the court may order sale of the property and then conduct an accounting of each party’s contributions, including carrying costs. Under RCW 7.52.120, the court will deduct expenses and distribute net proceeds according to each co-owner’s share and advances.
Alternatively, a breach of contract claim in superior court can seek monetary damages equal to the unpaid carrying costs, interest, and legal fees if your agreement authorizes fee recovery.
Helpful Hints
- Keep Detailed Records: Maintain organized files of all carrying cost invoices and payment proofs.
- Check Your Agreement: Clarify any ambiguities about cost categories or payment deadlines in writing.
- Use Certified Mail: This provides proof of sending and receipt for demand letters.
- Consider Mediation: A neutral mediator can help resolve disputes without court costs.
- Act Promptly: Washington law limits claims; don’t let deadlines lapse.
- Consult a Real Estate Lawyer: An attorney can guide you through complex partition or contract actions.