1

I co-own some rental property. My co-owner, who managed all the financials of the property (taking in rent and paying expenses) recently died. I haven't seen the deed, and his widow can't find it, but I presume his share goes to his estate.

He died with a negligible amount of cash, but his assets include property co-owned with me and a primary residence that will likely go to his widow.

I am one of his creditors, possibly the largest, because of other loans I have given to him over the years. But I expect that one or more of his creditors will become co-owners of the property with me.

My question is this: I've discovered that my co-owner has not paid taxes on the property for the past few years. Would any new co-owners be obligated to pay some of that debt?

  • 2
    The tax debt would probably come out of the estate first, but you are liable for some of that amount... Are these new co-owners buying the ownership interest, or were they gifted it in the will? What state is this in? – Ron Beyer Aug 25 at 22:06
  • 3
    In what form was/is your co-ownership with the decedent? Tenants in common? Joint Tenants? – DavidSupportsMonica Aug 25 at 22:13
  • @DavidSupportsMonica I don't know. I'm going to order a copy of the deed. – Dev1 Aug 26 at 18:10
  • @RonBeyer (Repost because my first comment was inaccurate). This is in PA. I don't have access to the will; decedent's widow has chosen not to open the estate, because she believes it's insolvent. – Dev1 Sep 4 at 17:19
2

Property taxes create a lien against the real property until paid, that must be satisfied by a successor in interest or co-owner if the property is not to be lost at a tax sale.

The law is not uniform on what happens if one co-owner pays property taxes on behalf of all of the co-owners.

In Colorado, I believe that the co-owner who paid would be deemed to have paid on behalf of all of the owners at the time and would have an unsecured claim for contribution against the co-owner (at the time of the payment) who hadn't paid, which could be collected as a claim against the estate.

In some states, payment of a property tax lien by one co-owner would give the person who paid off the property tax on behalf of everyone an equitable lien enforceable against a successor in interest, or would be a charge which could be considered in a partition action seeking to force a sale and divide the proceeds brought against a new co-owner.

In some states, payment of a property tax lien by one co-owner would give the person who paid off the property tax lien ownership of the interest of the co-owner who didn't pay's interest in the real estate as if the property had been sold at a foreclosure sale.

I haven't reviewed PA law to determine what rule applies there, which would probably not be obvious on the face of any statute and would have to be determined by examining several lines of case precedents in the state.

| improve this answer | |
  • The co-owner's widow has so far chosen not to open the estate. So I will have to pay all the back taxes myself. I will talk with a local lawyer to see if this gives me any increased ownership of the property. – Dev1 Sep 4 at 17:18

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.