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Capital Finance Company of Delaware Valley, Inc. v. Asterbadi

A-2503-07T1 (N.J. Super. App. Div. 2008) (Unpublished)

PARTITION — When tenants in common own property, absent special circumstances, each party is required to pay its share of all mortgages as well as the cost to preserve the property’s value; those co-tenants occupying the property are required to pay the cost of maintenance and other general occupancy expenses.

A bank, through enforcement of a judgment, succeeded to a husband’s tenancy by the entireties interest in his single family home. The bank then sued to a partition the property against the homeowner’s wife. The lower court denied the partition request, but ruled that the wife and the bank were tenants in common and ordered the parties to establish a fair rental value to be paid to the bank. The wife’s request for an order requiring the bank to pay its share of a second mortgage was granted, but her request that the bank contribute to the first mortgage was denied. On appeal, the Court affirmed all of the lower court’s determinations except for its denial of the wife’s request that the bank contribute to the first mortgage.

While the matter was on appeal, the bank moved to enforce the lower court’s order that the wife file an accounting for a prior year. The wife cross-motioned to require the bank to indemnify her from penalties by the New Jersey Department of Environmental Protection (DEP) stemming from the bank’s removal of sand from the property. The parties also disagreed as to whether certain items paid for by the wife were general occupancy expenses or if they were for repairs necessary to preserve the property. The lower court held that the wife owed additional monies for her use and possession of the property and that she, as the tenant in occupancy, had to pay for all ordinary and necessary property expenses. The lower court also ordered the bank to indemnify the wife from any fines or penalties imposed by the DEP.

On appeal, the Appellate Division pointed out that expenses such as for air conditioners, kitchen supplies, plumbing, and yard maintenance were paid to enhance the property’s rental value, and were not to maintain and preserve the property’s value. The wife argued that her outlays for repairs, painting, and window and blind replacements due to vandalism were necessary expenses for the property’s preservation. The Court held that if any such expenses were necessary for the property’s preservation and maintenance, then the wife was entitled to a credit from the bank for half of the cost unless the wife violated a previous order requiring her to give the bank notice of any non-emergency repairs made on the property. It remanded the matter to the bank for a determination as to whether the repairs in question were made in response to an emergency.


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