Legal Question in Real Estate Law in California

In order to refinance, you will have to have her name off the title. Once you get the money, then how you handle it depends upon a couple of factors you have not mentioned. If the house is worth more than the amounts you and she put in, does she want just the amount she put in or that amount and 50% of the equity, if there is any? As soon as she signs title over to you, unless she has a provision for her staying rent free, then you could kick her out as being only a guest. That would result in her hating you for the rest of her life. Putting your wife on title would mean a gift to her of half of the house and might even convert your private property half, if any, into community property. You need to prepare a detailed list of the facts and then see a real estate attorney to figure out the best way to handle the situation.

Mr. Shers is exactly right. This is a much more complicated situation than you seem to understand, with potentially very expensive unintended consequences. To answer your direct question, yes, as joint owners you can recover some or all of her share of the costs of ownership if she stops paying. This is based on her ownership, not occupancy. So if she is off title, she stops owing it (but you can immediately kick her out), as long as she is on title she owes it, but you cannot remove her and you cannot charge her rent. What you really are doing here is called a partition and is similar in some but not all ways to a partnership dissolution. It seems you and she have mostly parallel objectives in this situation, but some disagreements on the cost allocations and some other details, and you don't seem to understand all the mortgage and tax implications of what you are doing. If you and your sister are both interested, I would be happy to spend a free no-obligation half hour or so with you both, to go over the situation in more detail, give you some thoughts on the issues you need to work out, and give you some information on the mediation services I could provide if you cannot reach an agreement on all the issues on your own. I could meet with you in my San Francisco or San Mateo conference facilities, depending on what would be most convenient for you, and conference room availability at the time you would like to meet.

You cannot get her off title by refinancing. She is either going to have to deed her interest back to you, or you and your wife, or you are going to have to file a partition action.

With respect to the mortgage payments, a right of contribution exists in favor of one cotenant who pays taxes or other liens against the entire property. If the property was income producing, you could deduct the expenditures from the rentals received from the property. But you can't charge her rent as a coowner who is occupying the property.