Real Property - Cotenancy

Question 1

What is a tenancy in common?

Answer 1

A tenancy in common is the default estate created by a conveyance of real property to two or more people. The grantor need NOT use any type of explicit language to create a tenancy in common (e.g., “O to A and B”).

Question 2

What rights to tenants have when tenancy in common?

Answer 2

Each tenant in common has:

1.A separate but undivided interest in the property (i.e., the property does not have to be physically divided);

2. The right to possess and enjoy the entire property;

AND

3. The right to transfer their interest in the property freely during their lifetime or at death (i.e., NO right of survivorship).

Question 3

What is a joint tenancy?

Answer 3

A joint tenancy is a conveyance of real property to two or more people that is distinguished by a right of survivorship, whereby the surviving joint tenants automatically take the deceased tenant’s property interest.

Thus, joint tenants CANNOT pass their property interest by will or intestate succession (at death, their property interest automatically passes to the other joint tenants).

Question 4

How is a joint tenancy created?

Answer 4

A joint tenancy is created by a conveyance of real property to two or more people if the grantor:

1. Makes a clear expression of intent to create a joint tenancy;

AND

2. Uses survivorship language (e.g., “as joint tenants with a right of survivorship”).

Question 5

What are the four unities?

Answer 5

The “four unities” (P.I.T.T.) must be in place to create a joint tenancy:

Possession. Each joint tenant must have an equal right to posses and enjoy the whole property (also required for tenants in common).

Interest. Each joint tenant must have an equal share of the same type of interest (e.g., two joint tenants each have a 50% share in fee simple).

Time. Joint tenants must receive their property interests at the same time.

Title. Joint tenants must receive their property interest in the same instrument
of title.

Question 6

What happens if any of the four unities (PITT) are severed?

Answer 6

If any of the four unities (P.I.T.T.) are severed (i.e., destroyed), then the joint tenancy is terminated and the cotenants hold the property as tenants in common.

Question 7

What if a joint tenant conveys her interest to a third party?

Answer 7

If there were originally two joint tenants, the conveyance converts the estate into a tenancy in common (i.e., the two tenants are now tenants in common with no right of survivorship).

If there were originally three or more joint tenants, the joint tenancy remains among the other joint tenants not involved in the conveyance while the third party is a tenant in common.

Question 8

What happens when a joint tenant grants a mortgage interest in the joint tenancy to a creditor?

Answer 8

The effect will depend on the jurisdiction:

In a lien theory jurisdiction (majority view), the mortgage is treated as a lien and does NOT terminate the joint tenancy.

In a title theory jurisdiction (minority view), the mortgage will terminate the joint tenancy, and the tenants will then hold the property as tenants in common.

Question 9

What are operating expenses?

Answer 9

Operating expenses consist of necessary charges (e.g., taxes and mortgage payments).

OE’s are divided among cotenants based on their ownership interest

Question 10

How are rent payments handled among cotenants?

Answer 10

Rent payments received from a third party’s possession of the property, minus operating expenses, are divided based on the ownership interests of each cotenant.

Question 11

How are repair costs handled among cotenants?

Answer 11

Repair costs (even if the repairs are necessary) are NOT divided between the cotenants (i.e., there is no right for reimbursement for necessary repair costs). However, the cotenant who pays for the repairs can get credit for the repairs in a partition action.

Question 12

How are improvement costs handled among cotenants?

Answer 12

Improvement costs are NOT divided between the cotenants (i.e., there is no right for reimbursement for improvement costs). However, the cotenant who pays for the improvements can get credit for the repairs in a partition action.

Question 13

Each cotenant has a right to possess…

Answer 13

…ALL of the property, regardless of ownership share.

Question 14

What is an ouster?

Answer 14

An ouster occurs if a cotenant denies another cotenant access to the property.

Question 15

What can an ousted tenant do?

Answer 15

1. Get an injunction granting access to the property;

AND/OR

2. Recover damages for the value of the use while ousted.

Question 16

What is a partition?

Answer 16

A partition action is an equitable remedy that is available unilaterally to joint tenants and tenants in common.

Question 17

What are the two types of partitions?

Answer 17

Partition in kind

and

partition by sale

Question 18

What is a partition in kind?

Answer 18

A partition in kind physically divides the property into distinct portions. Courts have a preference for physical divisions of property over forced sales.

Question 19

What is a partition by sale?

Answer 19

A partition by sale involves selling the property and dividing the proceeds from the sale among each cotenant based on their ownership interests.

Courts will order a partition by sale if a partition in kind is:

NOT practicable;

OR

NOT fair to all parties.

Question 20

Tenants in common (like joint tenants) owe each other a fiduciary duty of

Answer 20

fair dealing and good faith.

Question 21

If tenant in common grandson possesses land and fails to pay taxes, then land held at tax sale, and tenant in common sister buys the land at the tax sale, what is tenant in common grandson’s rights to the land?

Answer 21

When one co-tenant buys an outstanding interest, she holds that interest on behalf of the other co-tenant(s).
So here, when the sister bought the tax deed, she was deemed to have bought on behalf of the grandson as well as herself. Thus the grandson received, in effect, an option to contribute (after the fact) to the tax sale, and the sister got a lien to make sure that if the grandson didn’t exercise that option, the sister would own the property free and clear. So now, the grandson can choose either to pay his one-half share of the amount the sister paid at the tax sale (at which point the sister and the grandson would each own one-half of the tax debt and would in effect retire it), or to forfeit his undivided one-half interest. (The grandson is not personally liable for the one-half — the only sanction against him if he doesn’t pay is to lose his one-half interest in the property.)

Question 22

For co-tenants, does it matter if tenant in possession pays more than his share of taxes/maintenance?

Answer 22

Generally, each co-tenant has the right to occupy the entire premises (subject to the other’s right to do the same), without accounting to any absent co-tenant(s) for profits made from that occupancy. Nor does the fact that the tenant who is in possession pays more than his share of the taxes or maintenance constitute any kind of an “obligation” or “undertaking” to the other(s) that he will continue to do so, in the absence of an express contract between the two.

Question 23

So co-tenant doesn’t have to pay other co-tenant for making money off land?
But what if there’s a partition?

Answer 23

No.

During the course of partition, the court will order an accounting, to determine whether either party owes the other money for rents collected, taxes paid, etc. It is not clear what substantive rules will govern that analysis — for instance, jurisdictions differ on whether a co-tenant who occupies the premises himself must account for the imputed value of rent received beyond his pro rata share.

Question 24

Does zoning violation render title unmarketable and B able to survive a specific performance action by S?

Answer 24

Yes. Marketable title is title that, viewed objectively, is free from reasonable doubt in both law and fact, and that the reasonable buyer would accept without fear of litigation. Here, the zoning violation would give the purchaser a reasonable fear of litigation, since he could be compelled to make the property comply with the zoning regulation.

Zoning ordinances require strict compliance.

Question 25

The doctrine de minimis no curat lex means that, literally,

Answer 25

“the law is not concerned with trifles.”
This doctrine generally means that substantial performance is enough for contracts.