Washington: Requiring Mortgage Statements and Repair Receipts from a Co-Owner Before Dividing Sale Proceeds

Detailed answer — what happens and what you can require under Washington law

If two or more people co-own real property and the property is being sold or otherwise divided, the law recognizes two relevant tracks: (1) private agreement between the co-owners, and (2) a court-directed partition or accounting. Which track applies determines how you can require documents and what a court can order.

How liens and sale proceeds are handled

A mortgage or other valid lien on the property is a lien against the property itself, and lien holders are paid from sale proceeds before owners share any remaining funds. In a court-ordered sale (partition by sale), the court applies proceeds to liens, costs, and expenses before dividing any surplus among owners. See Washington’s partition statutes for the court’s authority to sell and to apply sale proceeds: RCW 7.60.010 and RCW 7.60.040.

Can you require mortgage statements and repair receipts before dividing proceeds?

Short answer: You can request them and, in many situations, a court can force production. You cannot always unilaterally withhold an honest co-owner’s legitimate share unless a contract, escrow instruction, or court order allows it.

Practical and legal points to know:

• If you and the other co-owner have a written agreement about sale and distribution, you can include a term that requires production of payoff statements, mortgage histories, and repair invoices before closing or before funds are released from escrow.
• If co-owners cannot agree and one of you files a partition action, Washington courts can order an accounting of payments, credits, and expenses and can require the production of documents during discovery. The Washington Civil Rules allow parties in litigation to request documents and compel production. See the Washington court rules page for civil procedure: Washington Court Rules (CR).
• In a partition action the court can appoint a commissioner or receiver to sell or manage the property and hold funds until the court determines how to distribute them. That process commonly includes an accounting for mortgage payments, taxes, insurance, and repairs so that credits and debits are fairly allocated before distribution. See RCW 7.60.040.
• If a co-owner claims they paid mortgage payments, property taxes, insurance, or repairs, and asks for credit at distribution, you are entitled to documentation supporting those claims (payoff or periodic mortgage statements, canceled checks or bank statements showing payments, contractor invoices, receipts, or lien waivers). If the co-owner refuses to produce records voluntarily, you can obtain them through discovery in court or ask the court to require an accounting before proceeds are released.

What happens if a co-owner refuses to provide documents?

Options include:

• Send a written demand for a specific set of documents (payoff statements, lender payment histories, contractor invoices, receipts, canceled checks, bank statements, insurance proof).
• Ask the sale escrow holder to retain proceeds (or place funds in joint escrow) until the accounting dispute is resolved.
• If there is pending litigation, use formal discovery and motions to compel under the Washington Civil Rules to force production and seek sanctions for non‑compliance.
• File (or join) a partition action asking the court to order a sale, require an accounting, allocate costs/credits, and distribute net proceeds accordingly. The court can hold funds and resolve competing claims to credits for mortgage payments and repairs.

How courts typically treat mortgage payments and repair costs

General equitable principles apply. A co-owner who actually paid for mortgage installments, taxes, insurance, or necessary repairs that preserved or enhanced the property may be entitled to reimbursement or an offset from the proceeds. The court will look for documentation and will allocate credits or debts fairly before distributing the net proceeds. The secured lender’s payoff is paid first out of sale proceeds because the mortgage is a lien on the property.

Practical steps to protect your position

1. Preserve all records you have: mortgage statements, payoff letters from the lender, copies of checks, bank records, repair invoices, contractor communications, receipts, and photographs of work done.
2. Request a payoff or payment history directly from the mortgage servicer — lenders will provide payoff figures and histories to owners or authorized parties.
3. Send a written, dated request for the documents you need and keep proof of delivery.
4. If selling privately, insist on escrow instructions that require production of documents or that place funds into escrow until a signed accounting or court order resolves disputes.
5. If the co-owner refuses, consider mediation or file a partition action seeking a court-ordered accounting and distribution. Use discovery to compel document production if litigation begins (see Washington court rules: CR).
6. Avoid releasing or accepting distribution until liens, credits, and disputed claims are resolved or placed in escrow.

Helpful Hints

• Ask the mortgage company for a written payoff statement — it shows the remaining lien that must be paid at closing.
• Collect contractor invoices plus proof of payment and any lien releases; unpaid contractors can place mechanic’s liens against the property.
• Keep copies of cancelled checks or bank transfers that show who paid what and when.
• Put all demands and agreements in writing; verbal promises are hard to enforce.
• Use escrow to pause distribution while you sort competing claims — escrow agents can hold funds on written instructions or by court order.
• If you plan to start a partition action, consider asking the court to appoint a commissioner or receiver to handle sale, rents, repairs, and collect an accounting before distribution. See RCW 7.60.040.

Next practical step: gather whatever documentation you already have and send a clear written request to the other co-owner. If the co-owner refuses, consider contacting a lawyer to discuss filing a partition action or using discovery to compel production. An attorney can also explain how credits for payments and repairs are likely to be treated under the specific facts.

Disclaimer: This article is educational only and not legal advice. It does not create an attorney-client relationship. For advice about your specific situation, consult a licensed Washington attorney.