Joint Ownership Flashcards
Joint Title-Attributes
a. Automatic right to survivorship: At the death of one joint tenant, the remaining joint tenant automatically becomes the owner of the deceased joint tenant’s interest.
b. Equal right to occupy: Each joint tenant has an equal right to occupy the entire premises.
c. Equal shares: Each joint tenant must own the property in equal shares with the other joint tenants (e.g., two parties each with 1/2 interest, or three parties each with 1/3 interest).
d. At common law, a joint tenancy was presumed, but today a tenancy in common is presumed unless the right of survivorship is clearly expressed.
Creation of a joint tenancy-TTIP
A joint tenancy requires the four unities.
a. Time: Interest created at the same time.
b. Title: Parties take in the same title.
c. Interest: Identical equal interests.
d. Possession: Same right to possession of the premises.
e. And the express right of surviorship.
Severance of a joint tenancy
Unilateral action by one joint tenant may sever the joint tenancy. Three ways to sever:
- Conveyance
- Will
- Mortgage
- Lease
Conveyance
A conveyance (sale or inter vivos transfer) made by one joint tenant will serve to sever a joint tenancy.
- Severence with two joint tenants: The remaining joint tenant will hold the property with the new owner as tenants in common.
- Severence with three or more joint tenants: The new owner will take his portion as a tenant in common to the remaining joint tenants, but the remaining joint tenants will continue to have a joint tenancy with each other only. (E.g: Three joint tenants— A, B, and C— each have a 1/3 interest. A sells his interest to D. D holds a 1/3 interest as a tenant in common to B and C. B and C continue to have a joint tenancy with each other.)
Will
A joint tenancy cannot be devised by will. Any attempt is void because the decedent’s interest is extinguished at death since his interest automatically transfers to the surviving joint tenant.
Mortgage
One joint tenant may not encumber the interest of the other joint tenant. The effect of one joint tenant obtaining a mortgage is dependent on whether the jurisdiction adopts the lien theory or title theory approach.
- Lien theory (majority rule): The execution of a mortgage by one joint tenant does not sever the joint tenancy.
- Title theory (minority rule): The execution of a mortgage by one joint tenant on his share will sever the joint tenancy as to his share only.
- For both theories: The joint tenancy is severed if the mortgage is actually foreclosed and the property is sold.
Lease
The courts are split as to whether issuing a lease severs a joint tenancy.
Tenancy in common
Tenancy in common is a concurrent estate where two or more own a property with no right of survivorship.
- No right of survivorship.
- Equal right to occupy: Each co- tenant has a joint right to possession of the whole property and owns an interest in the property jointly with another.
- Nonequal shares acceptable: Co- tenants may hold different proportionate interests. (E.g.: A owns 1/3 interest and B owns 2/3 interest.)
- Co- tenant may sell, will, or gift his interest. The new grantee will step in the shoes of the grantor.
- At common law, a joint tenancy was presumed, but modernly a tenancy in common is presumed where there are multiple owners.
Tenancy by the entirety
Tenancy by the entirety is similar to a joint tenancy, but only between a husband and wife.
- Recognized in 21 states, but not recognized in California.
- Neither tenant can unilaterally convey their share or encumber the entire property or break the right of survivorship.
- Created only in a husband and wife with the right of survivorship . In states recognizing tenancy by the entirety, it is presumed in any conveyance to a husband and wife unless otherwise stated.
- Severance: May only be severed by divorce, death, mutual agreement , or execution by a joint creditor of both parties.
Co- tenancy general rules
- Possession and use of the property by one co- tenant
- Accounting
- Partition
- Possession and use of the property by one co- tenant
- Accounting
- Partition
- Encumbrance
Possession and use of the property by one co- tenant
a. Each co- tenant has the right to possess the whole property, but no co- tenant has the right to exclusively possess any part of the property.
b. No duty to account for profits and losses: A co- tenant in possession has no duty to account to another co- tenant for the
1. Rental value of his own occupancy of the premises, or
2. Any profits retained from his own use of the land. Except, any net profits received from exploitations of the land, such as mining, and any rents collected from third parties must be shared. (See section III.E.2.b below.)
3. A co- tenant is solely responsible for his own losses from his use of the property and may not seek contribution.
c. Ouster: If a co- tenant has refused occupancy to his co- tenant and claims an exclusive right to possession, this constitutes an ouster.
1. The co- tenant must account to his ousted co- tenant for the fair rental value of the premises.
2. An ousted co- tenant may also bring an action to regain possession.
Accounting of payments
Accounting of payments made and received on behalf of the jointly owned property
a. Payments- made general rule
1. Taxes and mortgage interest: Co- tenants are responsible for their proportionate share of carrying costs, such as taxes and mortgage interest payments.
2. Payments in excess of share: Where a co- tenant has made payments on behalf of the property for taxes, repairs, or mortgage payments that are in excess of his pro rata share, he may seek contribution, but there is no automatic right to collect the pro rata share from his co- tenant. The co- tenant may deduct these payments from rents received, or seek reimbursement “off the top” if the property is sold.
3. Improvements: Co- tenants have no right to reimbursement for improvements. b. Payments- received general rule: Co- tenants must share net rents received from third parties, or net profits received from the exploitation of the land itself (e.g., mining).
c. General duty of fair dealing between all co- tenants.
Partition
This occurs when, through voluntary agreement or judicial action if in best interest of all parties, the property is divided, or ordered sold and the proceeds distributed.
a. Accounting: Each party has a right to have an accounting and be reimbursed for taxes or repairs paid in excess of his proportionate share.
b. Partition is not available to a tenancy by the entireties, only joint tenant or tenants in common.
Encumbrance
A co- tenant may encumber his own share of the property with a loan or judgment lien, but may not encumber the share of his co- tenant.
Joint tenancy
Joint tenancy is when two or more people hold a single, unified interest in a property with a right to survivorship. There are three types of joint property ownership:
- Joint tenancy
- Tenancy in common
- Tenancy by the entirety
