Concurrent Interests

Question 1

Tenancy in Common

Answer 1

1. creation
   
   1. default form of co-tenancy
   2. statutes in most states say it is created by a conveyance or a devise to two or more people that does not create either a joint tenancy or a tenancy by the entirety.
   3. Example: a deed conveys Blackacre to “A and B” would be held to create a tenancy in common.
2. characteristics
   
   1. any number of people can be co-tenants and they may have unequal shares
   2. each co-owner in a tenancy in common has the right to sell, lease, or encumber her share without the permission of the other co-tenants (absent the agreement to the contrary).
   3. upon death, each co-tenant’s share passes with his or her estate. The other co-tenants have no right to succeed to the deceased co-tenant’s share.

Question 2

Joint Tenancy

Answer 2

1. creation
   
   1. Every jx requires that the intent to to create a joint tenancy be clearly specified in the deed or will, to overcome the presumption in favor of tenancy in common. The intention to create a joint tenancy must be clear because this form of co-ownership limits the inheritance interests of the deceased tenant’s heirs or the deceased tenant’s right to will the property.
   2. The Four Unities: these must exist to create a joint tenancy
      
      1. Time: joint tenants must acquire property at the same time
      2. Title: must acquire interests by same instrument
      3. Interest: the joint tenants must have the same type of interest, for the same duration
      4. Possession: joint tenants all have equal rights to possess as a whole. Just as with a tenancy in common, the tenants own one estate together, rather than separate parts of the estate. Of course, this does not preclude the joint tenants from agreeing among themselves about how to share their possessory rights.
   3. Some interpretations only call for certain parts of the four unities to be present, such as equal share or equal duration. It is important to check the statutes of the specific jx.
2. characteristics
   
   1. the single characteristic of the joint tenancy (that makes it different from tenancy in common) is the right of survivorship among the co-tenants. When one of the joint tenants dies, her interest simply ends and the other joint tenants remain as owners, with proportionally larger shares.
3. severance and partition
   
   1. the term severance refers to an action of a joint tenant that converts the joint tenancy into a tenancy in common. The right of survivorship as to that share is severed from the estate. In theory, any action that destroys one of the four unities will effect a severance, because a joint tenancy cannot exist if the unities are broken.
      
      1. most commonly, severance occurs when one joint tenant transfers her interest to someone else.
   2. The term partition should be carefully distinguished from the term severance. A partition ends the co-ownership of property and divides the property between the co-owners. Once the property is partitioned, the property will no longer be in concurrent ownership. In contrast, when a joint tenancy is severed, the co-tenants remain in concurrent ownership; only the right to survivorship is destroyed.
4. personal property
   
   1. Joint tenancies may also be created for tangible property, such as boats and cars, and intangible property, such as bank accounts. Bank accounts are more complicated though because the intent adding someone as a concurrent owner can create complications after someone’s death. It is important to put in writing/the will the intent that maybe it is just part of her estate and was set up for convenience, not as a gift. There is usually no survivorship interest.
5. intellectual property
   
   1. [text questions from book] can intellectual property be held in a co-tenancy? how might owning a trademark, for example, as co-tenants differ from a the co-ownership of a real estate?

Question 3

Tenancy by the Entirety

Answer 3

1. Creation
   
   1. this may only exist between married co-owners, who are treated as unit, under the common law fiction that viewed a married couple as one person
   2. A TBE conveyance to a married couple is presumed to create a tenancy by the entirety unless a contrary intention is clearly stated.
      the four unities are required along the with the fifth unity of marriage
      the language must be very specific, such as: you cannot avoid TBE by saying they are joint tenants, because TBE is a type of joint tenancy.
2. characteristics
   
   1. Just like a joint tenancy, spouses holding property in TBE have a right of survivorship, along with the other attributes of a joint tenancy.
   2. The biggest difference is that there is no possibility of unilateral severance; one spouse acting alone cannot affect the other spouse’s right of ownership.
      both spouses must agree to any transfer of interest in TBE property.
   3. While a joint tenant is generally free to demand partition, TBE property may be partitioned only with the agreement of both spouses, or upon dissolution of the marriage.

Question 4

Joint Tenancy Creation Issues

Answer 4

Failure to to adhere to the four unities of time, title, interest, and possession will result in a tenancy in common, despite the intention of the parties

Question 5

Ouster

Answer 5

This is the denial of a co-tenant’s right to possession

Majority rule: since each co-tenant has an equal right to possess the whole of the property, sole possession of the property by one co-tenant, in most jurisdictions, does not give rise to an obligation to compensate the other co-tenants absent ouster

Minority rule: a co-tenant who takes sole possession of the property may be liable to the other co-tenants for their proportionate share of the premises fair rental value. This is commonly based on statute

Question 6

Constructive ouster

Answer 6

When the circumstances render it unnecessary to demand the right to occupy, some courts will adopt this theory.

Common law precedents support the proposition that the remaining spouse should pay rent to the cotenant when both cannot be expected to live together on the property. For example, when it is impractical for all cotenants to occupy the premises jointly, it is unnecessary that those claiming rent from the cotenant in possession first demand the right to move in and occupy the premises

Question 7

Ouster and Adverse Possession

Answer 7

Because each co-tenant has the right to possess all of the property, possession becomes adverse only if there is an ouster of the other co-tenants

Question 8

General Rules of Co-Tenant Relations

Answer 8

In the absence of an agreement among co-tenants, courts may step in to resolve disputes:

1. Accounting
   
   1. Final accounting of the expenses and benefits of the tenancy to assess how to divide the shares
   2. Co-tenant may bring a separate action for an accounting seeking partition if another co-tenant receives rents or profits or otherwise benefits from the property in excess of his or her interest
2. Contribution
   
   1. Co-tenant may seek contribution from the other co-tenants for their share of expenses he has paid, such as taxes, mortgage payments, or repairs
3. Waste
   
   1. A co-tenant might seek an injunction against or compensation for the actions of another co-tenant that might harm or have harmed the property.

Question 9

Rents received rules

Answer 9

if a co-tenant leases out the premises to a 3rd party, she will need to account to the other co-tenants for the rent received because the lease of the entire premises to a 3rd party gives that party the right to exclusive possession during the lease term, which necessarily involves an ouster of the other co-tenants

• If a co-tenant leases out only her undivided interest in the property, giving the lessee only the same rights to possession that she had, some courts have held that the other co-tenants are not entitled to a share

Question 10

Carrying costs rules

Answer 10

Co-tenants have a mutual obligation to pay necessary costs of maintaining the property, including mortgage payments, insurance, taxes, and other costs necessary for the preservation of the property.

• Co-tenant paying such costs may bring an action for contribution against the other co-tenants

Question 11

Repairs and improvements rules

Answer 11

• In most states, a co-tenant who makes repairs to the property, even if they are necessary, does not have the right to demand contribution from the other co-tenants. However, in an accounting action or upon partition, the paying co-tenant should get a credit for necessary repairs
• Improvements: co-tenant making the expenditure receives a credit upon partition for the increase in property value attributable to the improvement
  
  • Example: I spent 50,000 on a new swimming pool. When we sell the house pool is appraised at 30,000. At partition I would be entitled to 30,000, not 50,000

Question 12

Waste rules

Answer 12

• A co-tenant may be able to enjoin actions that damage the property or, if the action has already occurred, may obtain damages for the decline in property value.
  
  • Courts will not allow an action for waste to resolve every disagreement between concurrent owners over the best way to use the property

Question 13

Marital Property

Answer 13

Types: (1) TBE, (2) Homestead laws (protect the family by providing a core of property that cannot be taken by creditors; To protect a spouse and children from suffering calamity from the reckless actions of the other spouse) (3) Community property, (4) Separate property

1. Majority of jurisdictions: use what is known as the separate property system (common law approach)
   
   1. Upon marriage, each spouse may continue to hold and manage separate property, titled in his or her sole name
   2. Rights of the other spouse to assets will be determined only upon the owner of the asset’s death or upon divorce
2. Minority of jurisdictions: Community property approach
   
   1. This system treats the earnings of either spouse, or property purchased with those earnings, as jointly owned, regardless of how it is titled

Question 14

Community Property Jurisdictions

Answer 14

1. Any property acquired with the earnings of either spouse during the marriage, becomes community property, owned equally and jointly by the couple regardless of how it is titled
2. Typically, property owned by either spouse before the marriage, or received as a gift or inheritance after marriage, is deemed separate property
3. All other property acquired during the marriage by either spouse is community property
4. However, separate property may lose its character and be transmuted into community property by being commingled with community property or by being used in the marriage

Question 15

Characterization of property as separate or community

Answer 15

• Increase in Value
  
  • Generally, if separate property appreciates in value during the marriage through inflation or market forces, the increased value retains its separate character
  • However, if the growth is due to the efforts of one of the spouses (active rather than passive), the increase is marital property
• Commingling
  
  • Separate property that is commingled with marital property retains its separate character if it can be traced and identified

The characterization of property as separate or marital also affects the management of the property

• The right to sell, give away, modify, or encumber the property is affected by characterization of the property

Some jurisdictions: each spouse may manage community property independently (look at book examples)

Other jurisdictions: both spouses must join in transactions regarding community property

Other jurisdictions: management authority may depend on the type of community property or the type of transaction at issue (look at book examples)

Community property automatically protects each spouse’s interests at death or dissolution of the marriage

• Death: when one spouse dies, half of the community property and all of the decedent’s separate property passes through the decedent’s estate, while the other half of community property is retained by the surviving spouse and does not pass through the estate
• Divorce:
  
  • Some jurisdictions: simply split the property 50/50, following the theory of equal ownership
  • Other jurisdictions: divide the assets equitably, a test that may be interpreted to allow a court discretion to adjust the division to achieve fairness

Question 16

Rights Upon Death

Answer 16

Separate property jurisdictions focus on protecting the spouse only when the marriage ends, either by death or dissolution

Community property jurisdictions don’t use spousal protections devices such as elective share or dower and curtesy because the spouse already automatically owns half of the community property

Dower and Curtesy:

• A surviving spouse’s right to receive a set portion of the deceased spouse’s estate – usually one-third to one-half.

Elective share:

• Spouse has an election. Something that legislature decides, that the surviving spouse can choose to take 50% or whatever the statute gives me of the estate or whatever is left under the will.
• This does not exist in a community property state as 50% of what is earned during the marriage automatically belongs to each side.

Question 17

Rights Upon Dissolution

Answer 17

Separate property jurisdictions: statutes determine how property will be distributed upon the dissolution of marriage

• Under most of these statutes, courts are to make an equitable distribution of the marital property- courts attempt to distribute the assets fairly and reasonably according to the circumstances, and the trial court has broad discretion in that regard
• Only marital property is subject to distribution; any property acquired prior to the marriage and gifts or inheritance received during marriage constitute marital property; separate property may be transmuted into marital property, if it becomes commingled with marital property such that it is not traceable, or if it is used in the marriage in a manner that evidences an intent to make it marital property

Factors court takes into account to achieve an equitable result:

1. Contribution of each spouse to the accumulation of the assets
2. Dissipation of the assets by either spouse
3. Duration of the marriage
4. Economic circumstances of each party after divorce and their employability or other sources of income
5. Who will get custody of and have the costs of caring for any children
6. Misconduct or fault on part of either spouse may be considered in certain jdx