PROPERTY

Question 1

Restraints on Alienation

Answer 1

Any total restraint on the transferability of a legal interest in property is void. Partial restraints for a limited time and for a reasonable purpose may be upheld. Discriminatory restraints prohibiting the transfer or use of property to a person because of race, religion, or ethic group are not enforceable.

Valid Restraints

1) reasonable restrictions in commercial transactions b/c it is part of their bargained-for agreement;
2) reasonable options and rights of first refusal;
3) restrictions on assignment and sublease of leaseholds

Question 2

Joint Tenancy

Answer 2

Requires the existence of the four unities. The joint tenants must take title by the same instrument, at the same time, with identical interests and right to possession. Under the right of survivorship, upon the death a joint tenant, his/her interest terminates and automatically goes to the surviving joint tenants.

Question 3

Joint Tenancy - Severance

Answer 3

If a joint tenancy is severed, the survivorship rights cease and the tenancy becomes a tenancy in common (TIC). JT can be severed by:
Mortgage
Judgment Lien - does not sever the joint tenancy until the property is sold at a foreclosure sale
Contract - if one joint tenant contracts to convey her interest results in severance
Intervivos Conveyance - An intervivos conveyance by one joint tenant of her undivided interest destroys the joint tenancy so that the transferee takes the interest as a TIC. When the property is held in joint tenancy by more than 2 joint tenants, a conveyance by one of them destroys the joint tenancy only as to the conveyor’s interest and the remaining joint tenants hold in joint tenancy between themselves.

Question 4

Joint Tenancy - Severance by Mortgage

Answer 4

A unilateral act of mortgaging the property may sever the joint tenancy depending on the jurisdiction.

Lien Theory - holds that the tenancy is not severed by a unilateral mortgage.

Title Theory - holds that unilateral mortgage will sever the joint tenancy because title passes from the mortgagor to mortgagee. The result is that the joint tenancy becomes a tenancy in common.

Question 5

Tenants in Common

Answer 5

A tenancy with two or more grantees where each co-tenant has an undivided interest with unrestricted rights to possess the whole property, without a right of survivorship. Each tenant can devise or transfer his/her interest to anyone.

Question 6

TIC - Possession

Answer 6

Each co-tenant has a right to possess all portions of the property but has no right to exclusive possession. A co-tenant out of possession cannot bring a possessory action unless she is ousted. Ouster occurs when the cotenant in sole possession wrongfully excludes his cotenants from the property.
• Triggers AP analysis

Question 7

TIC - Rents and Profits

Answer 7

Co-tenant Rent - Generally, co-tenants are not entitled to rents from a co-tenant in sole possession unless there has been an ouster or agreement to the contrary. The tenant in possession must pay the ousted cotenant his share of the rental value of the property.

Third party Rent - A co-tenant must account to other co-tenants for rent received from leasing the property to third parties, but can deduct operating expenses when calculating net profits. Third party rent is divided based on each co-tenant’s ownership interest.

Profits - Co-tenant in possession has a right to retain profits gained by her use of the property and need not share profits with co-tenants out of possession unless there has been an ouster or agreement to the contrary.

Question 8

TIC - Contribution

Answer 8

Co-tenants who pays more than her pro-rata share of payments for taxes, government assessments, and mortgages signed by all co-tenants can compel other co-tenants for contribution. Co-tenant can compel contribution for necessary repairs so long as notice of the repair was given. No right of contribution for improvements or unnecessary repairs.

Question 9

TIC - Partition

Answer 9

Any co-tenant has a right to judicial partition, either in kind (physical division) or by sale and division of the proceeds. Courts prefer a partition in kind but will permit partition by sale when a fair and equitable physical division of the property cannot be made.