What can you do when a co-owner refuses to pay taxes (CCP § 872.140)? 

5192023-300x300In every property co-owned by two or more persons, there are common costs. Common costs are those costs for the property that are common to all owners or for the common benefit of all owners. In California, cotenants are required to pay for their portion of the common costs. Therefore, cotenants must pay for their share of expenses to operate and maintain the property. The portion of common costs one must pay depends on the ownership interest of that cotenant. 

At the Underwood Law Firm, our attorneys are more than familiar with co-ownership and the requirements that follow. 

What are Common Expenses?

In California, a cotenant is obligated to pay his proportionate share of common costs to benefit the property. Common costs are those costs expended for the common benefit of the property. Common costs include (1) improvements, (2) taxes, (3) mortgage payments, (4) insurance payments, and (5) expenses. 

Right to Contribution

When a cotenant/co-owner of a property pays for a debt or obligation for the benefit of the co-owned property or discharges a lien or assessment imposed upon the property as a common burden, that paying cotenant is entitled to contribution from the non-paying cotenant. (Willmon v. Koyer (1914) 168 Cal. 369.) 

Essentially, when a cotenant advances funds in order to pay for the common costs of the co-owned property, that advancing cotenant is entitled to reimbursement from the cotenant who failed to pay. (Southern Adjustment Bureau, Inc. v. Nelson (1964) 230 Cal. App. 2d 539, 541.) 

Therefore, a co-owner who pays all the taxes on a property has a right to reimbursement from his cotenant for the payment of taxes. 

What Can You Do About a Co-owner Who Refuses to Pay Taxes?

A cotenant is required to pay their proportionate share of property taxes on the co-owned property. When a cotenant pays a tax assessed against the whole estate, it discharges a lien imposed upon the common estate and inures a benefit on all the cotenants. (Conley v. Sharpe (1943) 58 Cal.App.2d 145, 156.) Therefore, the cotenant that has paid the tax is entitled to a refund from the other cotenants of their proportionate shares of the money paid. (Id.

When a co-owner refuses to pay their share of property taxes, there are a limited set of options. 

First, you can always try to talk to the other co-owner to convince them to pay their fair share. As a part owner of the property, the right thing to do is share in the burdens of property ownership in most circumstances. Most courts in California have held, however, that a co-owner has no obligation to protect the property interest of the other co-owner. As such, there is no legal mechanism to enforce the payment of property taxes unless there is a written agreement to that effect. (Bardis v. Oates (2004) 119 Cal.App.4th 1.) As such, the law will not hold a co-owner liable simply for refusing to pay property taxes. Thus, this option will not work in every case. 

Second, you can try to mediate the dispute. Throughout the partition process, and even on the day of trial, any of the owners can make an agreement about the sale of the property. This can happen through a phone call, through negotiations between the parties lawyers, or through a mediation session with a retired judge or trained mediator. There are many benefits from a mediation session, including confidentiality provisions contained in the law in Evidence Code sections 1115 through 1129. Unfortunately, in a mediation, there are no legal consequences for refusing to agree because the mediator lacks any power over the parties. Thus, this option is not the right fit for every scenario. 

Third, instead, the best remedy when one co-owner refuses to pay their share of the property taxes is to have the property sold. In California, the legal procedure for selling commonly owned property is known as a “partition action.” A partition action is an action by a co-owner of property to have the court divide the subject property among the co-owners and divide the proceeds according to the ownership interest of the co-owners. In every partition action, there is a final accounting to assess the charges and credits upon each co-owner’s interest. (Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1035.) Therefore, in the final accounting of a partition action, the court will reimburse a co-owner for any payments they made for common costs in excess of their proportionate share, including payment of taxes. (Id.; CCP § 872.140.) 

An Example

“Shawn” and “Julie” are former romantic partners who bought a house together. Their relationship ended when Shawn came home one day to find Julie in bed with another man. Although they have ended their relationship, Shawn and Julie are still living together because neither of them has any other place to go. However, in retaliation for her cheating, Shawn refuses to pay any of the property taxes. 

Due to the sheer awkwardness of living with her ex, Julie decides to file a partition action against Shawn. In the accounting stage of the partition action, Julie will have a right to reimbursement for Shawn’s share of all the property taxes that Julie paid after they broke up. 

How Can the Attorneys at Underwood Law Assist You?

A cotenant is obligated to pay his proportionate share of property taxes on the co-owned property. As such, a co-owner who pays in excess of his proportionate share of taxes has a right to contribute for the excess amount they paid but can generally only recover such money through a partition action. 

As each case is unique, litigants would be well-served to seek experienced counsel familiar with the ins and outs of property co-ownership and the law surrounding them. At the Underwood Law Firm, our knowledgeable attorneys are here to help. If you are seeking reimbursement for your payment of common costs, are worried about your ability to sue for your payment of common costs, or if you just have questions, please do not hesitate to contact our office.

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