(2) Property: Concurrent Ownership Flashcards
Types of Concurrent Ownerships
- Joint Tenancy
- Tenants in Common
- Tenancy by Entirety
Joint Tenancy - Formation
A conveyance of real property to 2 or more persons creates a joint tenancy when 4 unities are present with the right of survivorship: (1) unity of time (all interests are received at the same time); (2) unity of title (all interests were acquired by the same instrument); (3) unity of interest (all ownership interests are equal); AND (4) unity of possession (all interests have equal rights of possession).
Does there need to be an intent to create a joint tenancy?
Joint Tenancy - Formation
There must be clear express intent to create a joint tenancy which is satisfied by including terms such as “joint tenant”, “right of survivorship”, “jointly”
Overall Rule & Severance Theories
Severance
Joint Tenancy - Overview
Overall Rule: Severance of a joint tenancy will turn it into a tenancy in common.
1. Lien Theory (majority)
2. Title Theory
3. Lease Theory
Lien Theory
Joint Tenancy - Severance
When a joint tenant grants a mortgage on their interest in lien theory states the mortgage is only a lien on the property and doesn’t sever the joint tenancy.
Title Theory
Joint Tenancy - Severance
When a joint tenant grants a mortgage on their interest in title theory states the mortgage severs the joint tenancy as it is a transfer of title.
Lease Theory
Joint Tenancy - Severance
Most states follow common law rule which states that a lease by one joint tenant severs the joint tenancy and it is converted to a tenancy in common.
Right of Survivorship
Joint Tenancy
Means that when one joint tenant dies his interest in the land is automatically transferred to the other joint tenants.
Tenancy in Common
Tenancy in common is created when two or more persons possess the right to the property at the same time and there is no right of survivorship.
Tenancy by Entirety
Tenancy by the entirety is a joint tenancy between married persons with a right of survivorship. The same rules as joint tenancy apply plus the persons have to be married when the conveyance occurs.
Partition
A tenant in common or joint tenant has the right to partition which is divide the land. Tenants may partition the property voluntarily (co-tenants agree in writing to the division of land) or involuntarily (by court action).
Involuntary Partition
Partition
(a) Partition in Kind (The court divides the property into distinct physical portions) or (b) Partition by Sale (they distribute the proceeds amount the co-tenants based on their ownership interest). Courts prefer a partition in kind.
Voluntary Partition
Partition
The agreement the co-tenants enter must be clear and the time limitations must be reasonable.
Co-Tenant Rent
A co-tenant cannot collect rent from another co-tenant who is in exclusive possession of the premises unless (a) there is an agreement to the contrary; OR (b) the co-tenant seeking rent was wrongfully ousted.
3rd Party Rent
An out of possession co-tenant is entitled to a fair share of the rent paid by a 3rd party to an in-possession co-tenant.
Reimbursement for Repairs
A co-tenant is entitled to reimbursement for the cost of necessary repairs unless there was a wrongful ouster. The amount the co-tenant owes is determined by the percentage share they own in the property.
General Rule & At Tenancy Termination Rule:
Reimbursement for Improvements
a co-tenant is not entitled to reimbursement for improvements made to the property, unless there is a separate agreement stating otherwise.
If the co-tenancy ends and the property increased in value due to the improvements the co-tenant who completed them is entitled to the increase in value.
General Rule / Co-Tenant in Sole-Possession Rule:
Reimbursement for Mortgage and Tax Payments
All co-tenants are responsible for their proportionate share of mortgage, tax payments or assessments (any payment that would result in a lien on the property if unpaid).
However, in most states a co-tenant that is in sole-possession of the property cannot recover for such payments unless the payments exceed the reasonable rental value of the property.
Ouster of a Co-Tenant
All co-tenants have the right to possess the entire property. An ouster occurs when a co-tenant excludes another co-tenant from possessing the property. The party wrongfully ousted may bring an action to recover possession and damages.
