Settlement • Residential and Commercial Real Estate

Hunsberger v. Zechman, PICS Case No. 14-0457 (C.P. Lycoming March 12, 2014) Gray, J. (7 pages).

Co-tenant entitled to a credit for half the amount of payments made on open ended mortgage after partition of jointly-owned property.

Defendant Danyelle M. Zechman purchased property in Williamsport consisting of 0.115 acres of land, for $100,000 as evidenced by the deed executed Feb. 28, 2002. On Oct. 22, 2009, Zechman transferred the property to herself and Hunsberger via deed, listing the consideration as $1.00 and “joint tenants with the right of survivorship and not as tenants in common.”

Zechman defaulted on the property which included two remaining and outstanding mortgages, and Hunsberger motioned the court for partition; the court ordered the property to be partitioned and held the parties were co-tenants with a 50 percent interest each. However, the court found the property was incapable of division without spoiling the whole, thus requiring a sale of the property.

In January 2013, Hunsberger vacated the property; his father, a cosigner on an open-ended mortgage for the property, continued to remit payments to the lender. Zechman maintained payments on the other purchase mortgage, including an escrow for taxes and insurance. The court determined a reasonable price for the property of $125,000.

Hunsberger moved for partition pursuant to Pa.R.Civ.P. Rule 1551 following Zechman’s default. The court property entered an order directing partition and setting forth the names of the co-tenants and their respective property interests. The court shall than determine the “credit which should be allowed or the charge which should be made, in favor of or against any party because of use and occupancy of the property, taxes, rents or other amounts paid, services rendered, liability incurred or benefits derived in connection therewith or thereform.” Pa.R.Civ.P. Rule 1570.

The court found that Zechman was responsible for one half the fair rental value as of the first full month that she had exclusive possession and going forward. Further, Hunsberger was entitled to a credit for half the amount of those payments made on the open ended mortgage with Zechman entitled to a credit for half the amount of the payments on the original mortgage. In addition, Hunsberger was entitled to credit for half the costs incurred for preparing the property for sale, with Zechman being credited for funds remitted toward payment on taxes and insurance.

The court ordered that Zechman was permitted to remain in the property and was to cooperate with the sales of said property. In addition, the proceeds of the sale would first be applied to mortgages due and owing, with any remaining funds being credited pursuant to the costs and liabilities incurred until such time as the property was sold.