Understanding your options when a co-owner encumbers inherited real estate in Wisconsin
Short disclaimer
This information is educational only and not legal advice. It explains general Wisconsin law and common remedies. Consult a Wisconsin attorney about your specific situation before taking action.
Detailed answer — how this usually works under Wisconsin law
When several people inherit land, they typically become co-owners (often as tenants in common unless the deed or estate paperwork says otherwise). Each co-owner holds an undivided interest in the whole property, not a separate physical portion. That split interest affects what one co-owner can do alone.
Can one co-owner take out a home‑equity loan or refinance the whole property without others?
Generally no. A lender normally requires the owner(s) of the entire legal title to sign a mortgage or deed of trust that places a lien on the whole property. If multiple people own the property, the lender will want signatures from the owners whose names appear on title for the lender to obtain a valid lien on the whole property.
That said, one co-owner can attempt to mortgage or encumber only their own fractional (undivided) interest. In practice lenders rarely make loans secured only by a fractional co-owner interest because such liens are hard to foreclose and recover on. If a lender did accept only one co-owner’s signature, the recorded mortgage would usually affect only that co-owner’s share, not the other owners’ shares, unless the lender obtained signatures from all titled owners.
What if a co-owner actually refinances or records a mortgage without your consent?
- If the recorded mortgage shows signatures or documents you did not sign, you can challenge that recording — especially if a signature was forged or produced by fraud.
- If a lender improperly relied on a defective title or bad signing practice, the mortgage may be partly or wholly void or unenforceable as to the non‑consenting owners. Remedies vary by fact pattern.
- If the property remained in the decedent’s name and someone falsely represented that they alone owned the property, other heirs can have the transaction set aside or corrected if they can show fraud, forgery, or misrepresentation.
Common legal remedies available in Wisconsin
Depending on the circumstances, co-owners who did not consent can pursue one or more of the following:
- Quiet title or declaratory relief — to clarify who owns what and to remove an improper lien from the public record.
- Action to set aside a mortgage as fraudulent or forged — when a signature was forged or obtained by fraud.
- Partition action — ask the court to force sale of the property and divide net proceeds among owners; alternately, ask the court to allocate interests or order a physical division when feasible.
- Injunctive relief — to block a pending sale or foreclosure while the court sorts out ownership and liens.
- Damages — if the non‑consenting co-owner’s actions caused measurable financial harm, you may be entitled to money damages in addition to removal of the lien.
Wisconsin’s statutes and case law govern partition and property ownership procedures; you can start reviewing statutory language and procedure at the Wisconsin statutes page: https://docs.legis.wisconsin.gov/statutes. For statutory language and case law regarding partition and co‑ownership, search the Wisconsin statutes for terms like “partition” or “co‑ownership” at: https://docs.legis.wisconsin.gov/statutes/search?search=partition.
Practical outcome examples (hypothetical)
Example A — Proper refinance with all titled owners: If every owner on title signs the refinance, the new mortgage likely encumbers the whole property and all owners’ interests. The co-owner who didn’t “want” the loan remains bound by the recorded mortgage because it is recorded against title.
Example B — One owner signs alone but title shows multiple owners: The lender typically cannot validly lien the other owners’ shares. The non‑signing owners could ask a court to remove the lien as to their shares or to set aside the transaction if fraud occurred.
Example C — Forged signature: If a co-owner’s signature was forged or a deed was altered, you can seek to rescind the deed/mortgage, have the forged document expunged from the recorder’s office, and pursue damages and criminal referral for forgery.
Immediate steps to take if you discover a mortgage or refinance you did not approve
- Get a copy of the recorded documents. Search the county recorder/ register of deeds where the property is located and obtain any recorded mortgage, deed, or other instruments.
- Confirm who is on title. Compare the deed and probate papers to see whether you’re listed as an owner and whether the mortgage purports to encumber all owners.
- Contact the lender (carefully). Ask what signatures they relied on and whether they obtained title insurance. Do not admit facts or consent to anything without speaking to an attorney.
- Preserve evidence and timelines. Keep copies of communications, recorded documents, and any probate records or wills.
- Talk to a Wisconsin real property/ probate attorney promptly. Many remedies are time sensitive.
How to prevent problems going forward
- Update title after probate. Make sure the deed reflects current ownership clearly so that lenders and buyers cannot rely on stale records.
- Use written co‑owner agreements. A buyout or co‑owner agreement can limit unilateral actions and set a process for encumbrances, sales, and buyouts.
- Record notices of dispute. If you learn of suspicious transactions, your attorney may file a lis pendens or other notice to warn potential buyers or lenders.
- Consider title insurance or title review. Before any major transaction, have title searched to spot unexpected liens or claims.
When to consider a partition (forced sale)
If co-owners cannot agree about refinance, sale, or use of the property, a partition action asks the court to divide the property or order its sale and split the proceeds. Partition often resolves disputes when co-owners do not want to remain tied together. Courts have broad discretion to order sale or division based on circumstances.
Helpful hints
- Find the deed and probate order first. Ownership and authority flow from the recorded deed and probate distribution.
- Search the county recorder of deeds online or in person for mortgages and liens.
- Do not move money or sign anything related to the property until you consult an attorney.
- If you suspect fraud, preserve originals and consider criminal referral in addition to civil claims.
- Keep communications written, date-stamped, and saved. They may become evidence in court.
- Time matters: statutes of limitations and procedural deadlines can limit relief, so act promptly.