Legal Question in Business Law in Nevada
My partner and I bought a condo as tenants in common. The property is now underwater, so my partner wants to stop paying and let it go into foreclosure. Between the two of us, we can still afford to pay the mortgage. She has a good job, but she said if the bank goes after us on the deficiency judgment, she will file for bankruptcy. We owe 86K on the condo, and it's current value is only 37K. We tried a short sale but the bank wanted us to pay the balance of the loan. My partner refused. I do not want to foreclose because I know it will ruin my credit, and the lender can still come after us anyway on the deficiency. In addition, the HOA can also come after us on unpaid dues. I plan to continue paying the mortgage if I can't find a renter though it will be really, really difficult because I am also paying for my primary home. What can I do to make my partner pay her 50% of the mortgage and expenses (utility bills, HOA, taxes, insurance, etc.) so the loan does not go into default?
2 Answers from Attorneys
You cannot really force your partner to make these payments. She obviously has made a business decision to not throw good money after bad despite the adverse consequences to her credit. Obviously, it's your choice to try to salvage to deal and save your credit. Your only recourse would be to sue her, but if she files bankruptcy you're out of luck like the lender and HOA. The real question is why you would want to keep throwing good money after bad.
Each owner may have a right of contribution for the costs of owning the property. Co-owners can be forced to contribute to the payment of expenses such as property taxes, utilities, maintenance, insurance, association dues and mortgages for the entire property. Following a lawsuit, whether any award is collectable is a completely different matter.
You may have a duty to mitigate your damages by renting out the property to service the debts against the cotenancy.
Your attorney can explain further.
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