Concurrent Estates Flashcards
What are the 3 forms of concurrent ownership?
1) Joint tenancy = two or more own w/ a right of survivorship 2) Tenancy by the entirety = a protected marital interest b/t married partners w/ the right of survivorship 3) Tenancy in common = two or more own w/ NO right of survivorship
What are the features of a joint tenancy?
1) The right of survivorship: when 1 JT dies, his share passes AUTOMATICALLY to surviving JTs NOTE: if second to LAST JT dies (i.e. only 1 is left), the JT ENDS 2) A JT’s interest is alienable but is NOT devisable (via will) or descendable (via intestacy) b/c of the right of survivorship
How do you create a joint tenancy? NOTE: NY Distinction
1) Need the 4 unities (“T-TIP”)…JT’s must take their interests: Time: at the same time Title: by the same title (instrument, e.g. deed) Interest: w/ identical interests Posess: w/ right to posess the whole 2) Grantor must CLEARLY/EXPLICITLY express the right of survivorship 3) (If want to self-create JT w/ 3d party) Use a straw (a middleman) First, convey to straw Second, straw conveys back to grantor and 3rd party so 4 unities are present NY DISTINCTION: by statute there is NO need to use a straw in NY
What are the 3 ways tosevering a joint tenancy? NOTE: NY Distinction
“S-P-A-M” 1) SALE: a joint tenant can sell/trnfr her interest during her lifetime (EVEN w/o the knowledge/consent of the other tenants) Buyer becomes a tenant in common If there were originally 3 or more JTs, then among the remaining joint tenants the joint tenancy survives Equitable conversion: simply entering into Kto sell severs JT 2) PARTITION: 3 variations to partition and sever a JT Voluntary Agreement: peaceful severance (no need for ct to step in) Partition in Kind: judicial action for physical division IF in best interests of ALL parties (more likely if the property is bountiful) Forced Sale: judicial actionIF sale in best interests of ALL; proceeds divided proportionally (more likely when JT is in a single property) 3) AND 4) MORTGAGE: depends on jx theory… Title Theory: mortgage/lien severs (minority rule) Lien Theory: mortgage/lien does NOT sever (NY DISTINCTION: NYfollows this rule)
What are the features of the tenancy by the entirety? NOTE: NY Distinction
Tenancy by the entirety = a protected marital interest b/t married partners w/ the right of survivorship This is a VERY protected form of co-ownership Creditors of only ONE spouse can’t touch this tenancy NY DISTINCTION: in NY, one spouse may mtg his interest and his creditor may enforce against THAT interest, but ONLY as to the debtor spouse’s share. The right of survivorship MUST NOT be compromised Neither tenant (spouse), acting ALONE, can defeat the right of survivorship by unilateral transfer to a 3d party DEATH or DIVORCE will severa TBTE
How can a tenancy by the entirety be created?
It is created b/t MARRIED partners w/ the RIGHT of survivorship It arrises PRESUMPTIVELY in any conveyance to married partners (unless stated otherwise by the GRANTOR)
What are the features of a tenancy in common?
Tenancy in common = two or more own w/ NO right of survivorship each co-tenant owns an INDIVIDUAL part and each has a right to posess the WHOLE each interest is devisable (by will); descendable (by intestacy); AND alienable; there are NO survivorship rights b/t tenants
What are the 5rights AND responsibilities of co-tenants (tenancy in common)? NOTE: NY Distinction
1) Posession: each CT is entitled to posess and enjoy the WHOLE (otherwise wrongful ouster) 2) Rent: CT in exclusive possession (w/o ouster) is not liable to other CTs for rent, BUT IF CT rents all/part of TIC to 3rd party, must pay other CTs proportionate share of rental income 3) Adverse possession: unless ouster, NO adverse possession by another CT b/c NO hostility NY DISTINCTION: in NY, a CT may acq full title by adverse posession if he has EXCLUSIVE posession for 20 CONTINUOUS yrs (i.e. an implied ouster) 4) Carrying costs/improvements: each CT responsible for: Proportionate share carrying costs (tax/mortgage) Proportionate share of costs of necessary repairs (if other CTs notified by repairing CT) BUT NOT responsible for “improvements” made by another CT (subjective) 5) Waste: a CT must not commit waste (voluntary, permissive, ameloriative) Other CTs can bring a waste action DURING the life of the tenancy in common
How can a tenancy in common be severed?
Severance can be by (i) voluntary; (ii) partition in kind; OR (iii) forced sale At partition, for any improvements… the improving CT is entitled to a credit equal to any increase in value caused by her efforts; OR the “improving” CT would bear full liablity for any drop in value caused by her efforts
What are the tenancy obligations for
Rent bwtn co-tenancy, 3rd Party rent payment, operating expenses, natural resources, ouster,
Question
Two siblings, a brother and a sister, inherited the family residence as equal tenants in common upon the death of their mother. The brother lived out of state, so both siblings agreed that the sister would live in the residence. While the sister lived on the land, she paid all of the taxes. She also added a studio to the residence, which greatly improved its value. Being a professional yoga instruction, she held yoga classes in the studio. The sister’s classes proved profitable. The brother told his sister that she owed him a portion of the profits from the yoga studio. The sister denied owing her brother a share of the profits, and retorted that the brother had to reimburse her for half of the costs of the studio. Neither sibling has yet requested a partition or accounting. Do either of the siblings owe the other money with respect to residence?
Answers
The sister owes her brother a share of profits from the studio, and the brother owes his sister half the cost of the studio. The sister owes her brother a share of profits from the studio, but the brother does not owe his sister half the cost of the studio. The sister does not owe her brother a share of profits from the studio, but the brother does owe his sister half the cost of the studio. Neither sibling owes the other with regard to income from the yoga classes or the cost of the studio.
Rights and Obligations
a. Possession
Unless there is an agreement to the contrary, each co-tenant has the right to possess all of the property. A co-tenant is generally not required to pay rent to the other co-tenants for the value of her own use of the property, even when the other co-tenants do not make use of the property. Similarly, a co-tenant is generally not required to share profits earned from the use of the property, such as from a business conducted on the property.
As a consequence of each tenant’s right to possess the entire property, a co-tenant’s exclusive use of the property does not, by itself, give rise to adverse possession of the interest of another cotenant.
1) Ouster
When a co-tenant refuses to allow another co-tenant access to the property, the ousted co-tenant may bring a court action for ouster to gain access to the property and to recover the value of the use of the property for the time during which the co-tenant was denied access to the property.
2) Natural resources
A co-tenant is entitled to the land’s natural resources (e.g., timber, minerals, oil, gas) in proportion to her share.
b. Third-party rents
A co-tenant must account to other co-tenants for rent received from third parties but can deduct operating expenses when calculating net proceeds. Third-party rents are divided based on the ownership interest of each tenant.
c. Operating expenses
A co-tenant can collect contribution from the other co-tenants for paying more than his portion of necessary or beneficially spent operating expenses (e.g., taxes or mortgage interest) unless he is the only one in physical possession of the property, and the value of his use of it is equal to or outweighs the overpayment. Note that a co-tenant in sole possession can collect only for the amount that exceeds the rental value of the property.
d. Repairs and improvements
A co-tenant does not have a right to be reimbursed by other co-tenants for repairs made to the property, even when those repairs are necessary. However, the majority view is that contribution for necessary repairs can be compelled in actions for accounting or partition. A co-tenant may, in some jurisdictions, maintain a separate action for contribution, as long as the other co-tenants have been notified of the need for the repair.
Similarly, except in actions for accounting or partition, a co-tenant does not have a right to reimbursement for improvements made to the property. As noted, when a third party is occupying the property, the co-tenant who collects rent from the third party can subtract expenses for necessary repairs from the rent received before sharing the rent with the other co-tenants.
Rationale:
Answer choice D is correct. Co-tenants have the right to use and possess all of the property. A co-tenant is generally not required to share profits from a business that the co-tenant runs on the property with any of the other co-tenants. Likewise, co-tenants are generally not entitled to reimbursement for improvements made to the property. Here, the sister is free to operate her business in the family residence and does not have to split the profits with her brother. On the other hand, the sister is not entitled to any contribution from the brother for the cost of the improvements. Accordingly, answer choices A, B, and C are incorrect because each improperly imposes on one sibling the obligation to make payment to the other.
