If parties are 50/50 owners on investment, property, are both parties responsible for the mortgage regardless of who occupies the home?
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If parties are 50/50 owners on investment, property, are both parties responsible for the mortgage regardless of who occupies the home?
Parents and daughter both invested equal amounts into a home. The daughter lived in it and paid the mortgage, maintenance and taxes 100% for 5.5 years. It is time to sell and the parent now want 50% of net profits. Is this fair if the daughter paid down the mortgage, put in sweat equity and more? If these people are true 50/50 investors, shouldn’t they both be responsible for the costs associated?
Asked on June 27, 2016 under Real Estate Law, Colorado
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
Investors can apportion the costs, time/effort, and responsibilities however they like, so the law does not presume that they will split these things evenly. Had parent and daughter entered into an agreement whereby the daughter would receive more of the proceeds or profits in exchange for paying the mortgage, etc., that agreement would be enforceable; however, without such an agreement, if they are 50-50 owners, they will each get 50% of the profit. That is especially so if the daughter, not the parent, lived in the property: her payments, etc. would likely be taken to be her "rent" for living there, and since she lived there, she received value for her contributions--a court would not find anything inequitable or inappropriate about the person living there paying the mortgage or putting in sweat equity.
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