Two people own a New York property together. The property has tenants, but only one co-owner has been collecting the rent.
The other owner eventually asks: Where is my share?
That question can become an important part of a New York partition action. A co-owner who received rental income from jointly owned property may be required to account for that income, and the final division of the property or sale proceeds can reflect amounts that should have been shared with the other owner.
The important distinction is between rent actually collected from third parties and simply having one co-owner live in the property. New York law does not necessarily treat those situations the same way.
Does a Co-Owner Have to Share Rent Collected From Tenants?
Generally, a co-owner cannot simply keep more than his or her proper share of rental income generated by jointly owned property.
New York’s RPAPL § 1201 permits a joint tenant or tenant in common to recover a just proportion from a co-tenant who has received more than his or her proper proportion. New York courts have described this rule as requiring co-owners to account to one another for rents received from third parties.
In a partition case, this issue is ordinarily addressed through an accounting.
For example, in Gapihan v. Hemmings, 121 A.D.3d 1397 (3d Dep’t 2014), the Appellate Division explained that an accounting of the income and expenses of partitioned property is a necessary incident of a partition-and-sale action. Because the record did not clearly establish the rent collected from a tenant, the court sent the matter back for a hearing so the rental-income issue could be properly determined.
In practical terms, the court may need to determine how much rent came in, what legitimate property expenses were paid, and what portion of the resulting net income should be attributed to each co-owner.
Is the Accounting Based on Gross Rent or Net Rental Income?
Usually, the analysis is not as simple as adding up every rent check and dividing that number by the ownership percentages.
Rental property also has expenses. Depending on the circumstances, those may include real estate taxes, insurance, utilities, repairs, maintenance, management expenses, mortgage-related costs, and other expenditures associated with the property.
The accounting therefore may examine both sides of the ledger: income received and expenses paid.
That is why records matter. A co-owner who managed the property should be prepared to document both the rental income collected and the expenses claimed against that income.
What Records Can Become Important?
If rental income is disputed, useful records may include:
- Leases and rental agreements
- Rent ledgers
- Bank statements and deposit records
- Copies of rent checks or electronic-payment records
- Tax returns or schedules reflecting rental income
- Property-management statements
- Receipts and invoices for property expenses
- Communications between the co-owners about tenants, rent, or expenses
If one co-owner handled the property for years without providing statements to the other, reconstructing the accounting can become one of the central factual issues in the partition case.
What If the Co-Owner Says the Rent Was Used to Pay Property Expenses?
That may be relevant, but it does not necessarily eliminate the need for an accounting.
Suppose a two-family house is owned 50/50. One co-owner collects $3,000 per month from a tenant but also pays property taxes, insurance, water charges, and repairs.
The appropriate question is not necessarily whether the other owner receives half of every $3,000 rent payment. Instead, the accounting may need to determine the income and legitimate expenses associated with the property before determining what amount, if any, is owed between the owners.
The documentation supporting those claimed expenses can therefore be just as important as the records showing the rent collected.
What If My Co-Owner Lives in the Property Instead of Renting It Out?
This is where the analysis changes.
A co-owner’s personal occupancy of jointly owned property is not automatically treated as though that owner were a third-party tenant paying market rent.
New York courts have held that a tenant in common generally is not liable to another co-owner for use and occupancy merely because one co-owner lives at the property. Additional circumstances—such as an agreement to pay for occupancy or an ouster, meaning exclusion of the other co-owner from possession—may be required.
The First Department addressed this distinction in First Majestic Silver Corp. v. Heitz, 209 A.D.3d 435 (1st Dep’t 2022). The court explained that a co-owner seeking use and occupancy based on exclusion would have to establish an ouster, while also recognizing that an accounting is a necessary incident of a partition claim.
So there is an important difference between these two situations:
Rent collected from a third-party tenant: generally part of the accounting between co-owners.
One co-owner simply lives in the property: does not automatically create an obligation to pay the other co-owner rent.
That distinction can substantially affect the accounting.
Can Rental Income Affect the Final Sale Proceeds?
Yes.
The purpose of the accounting is to determine the parties’ financial rights before the proceeds are finally distributed.
If one co-owner received more than his or her proper share of rental income, that amount may be taken into account when determining what each owner ultimately receives. Conversely, legitimate expenses paid by the co-owner managing the property may also need to be considered.
This is one reason a 50/50 deed does not always produce two identical checks at the end of a partition case. The ownership percentages provide the starting point, but the accounting can address financial activity that occurred during the co-ownership.
The Bottom Line
If your co-owner has been collecting rent from jointly owned New York property, you may be entitled to an accounting and to your proper share of the rental income after appropriate expenses are considered.
But the details matter. The court may need to determine how much rent was actually received, what expenses were legitimately paid, and what each co-owner’s proper share should be.
And if the dispute concerns a co-owner personally living in the property rather than rent collected from tenants, a different rule may apply.
A co-owner considering a partition action should identify rental-income issues early and preserve whatever financial records are available. In many cases, understanding where the rent went can be an important part of determining how the final proceeds should be divided.
This article is for general informational purposes only and does not constitute legal advice. Prior results do not guarantee a similar outcome. The application of New York partition law depends on the facts and circumstances of each matter.
Primary legal sources reviewed: RPAPL § 1201; Gapihan v. Hemmings, 121 A.D.3d 1397 (3d Dep’t 2014); First Majestic Silver Corp. v. Heitz, 209 A.D.3d 435 (1st Dep’t 2022).