Feb.

2005 Property Essay Sample Answer

1. Bill’s (B), Executor’s (E), and Lender’s (L) Interest in the House

B’s Interest

Joint Tenancy

A joint tenancy is an estate in land held concurrently by two or more co-tenants. The feature that
distinguishes a joint tenancy from a tenancy in common is the right of survivorship: When one
joint tenant dies, the surviving co-tenants take the property free of the deceased tenant’s interest.

Creation

At common law, four unities are required to create a joint tenancy: the unities of time, title,
interest, and possession. This means the interests must have vested at that same time, have been
acquired by the same instrument, be of the same type and duration, and give identical rights to
enjoyment. As for the initial grant, a joint tenancy is created when there is a clear expression of
intent to create this estate. Here, the deed of title indicated that B and A took the house as “joint
tenants with rights of survivorship.” This language was sufficient to create a joint tenancy. Thus,
because A died before B, he will take her interest in the house through the right of survivorship
unless the joint tenancy was severed during her lifetime.

Severance

A joint tenancy can be terminated by the acts of one co-tenant. For example, a joint tenant’s
inter-vivos conveyance of his undivided interest destroys the joint tenancy, and the transferee
takes as a tenant in common. The effect of one co-tenant mortgaging her interest varies
depending on how mortgages are characterized in that jurisdiction. In the majority of states, a
mortgage is regarded as a lien on title; thus, one joint tenant’s execution of a mortgage on her
interest does not by itself cause a severance. However, in a minority of states, a mortgage is
regarded as a transfer of title, which destroys the unity of title, severing the joint tenancy.

Here, B mortgaged the house to L without A’s consent. Following the rule in most states, this act
alone did not sever the joint tenancy. Thus, when A died, B took her interest in the house
through his right of survivorship. As a result, B now owns an undivided interest in the house,
subject to L’s mortgage.

E’s Interest

Severance of Joint Tenancy

See severance rule above. In some states, B’s mortgage to L would have automatically severed
his joint tenancy with A, causing B and A to own the house as tenants in common instead. Then,
on A’s death, here interest in the house would pass to her estate, as represented by E, for
distribution to her heirs or assigns.

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However, the majority of states would regard B’s mortgage as merely a lien on title, which
would not sever the joint tenancy. In most states, then, A’s interest in the house would not go to
her estate on her death, but rather to B. Therefore, E has no interest in the house, and E’s rights
are limited to collecting the amounts due to A during her lifetime.

L’s Interest

A mortgage is a security interest in real estate, usually securing a promise to repay a loan. If the
loan is not paid when due, the mortgagee can either take title to the real estate or have it sold and
use the proceeds to pay the debt. A single joint tenant can encumber joint tenancy property.
Here, L’s interest depends on whether B had the power to encumber the joint tenancy property,
which he did. The fact that B executed the mortgage without A’s knowledge or permission does
not make the mortgage ineffective, so L had a valid mortgage interest in the property.

2. E’s and B’s Claims

Rent Payments from B

Ouster

The unity of possession means that each co-tenant has the right to possess and enjoy all portions
of the property, subject to the equal right of her co-tenant. An ouster occurs if one tenant
wrongfully excludes another from possession of the premises. An ousted co-tenant is entitled to
receive her share of the fair rental value of the property for the time she was wrongfully deprived
of possession. Although a claim of right to exclusive possession can constitute an ouster, here A
and B agreed that B would occupy the house while A lived in another state. Thus, there was no
ouster, and B did not owe A rent for his exclusive possession of the house.

Repairs

A co-tenant who pays more than her pro rata share of the cost of necessary repairs is entitled to
contribution from the other co-tenants in actions for accounting or partition. Here, B paid for all
repairs while he was in exclusive possession of the house. Thus, B has a claim against E to
recover A’s share of the repair costs.

Taxes

Each co-tenant has a duty to pay her share of taxes and payments due on mortgages on the entire
property. A tenant who is not in sole possession can pay the taxes and then compel contribution
from the other co-tenants. However, a co-tenant in sole possession will receive reimbursement
only for the amount that exceeds the rental value of the property. Here, B paid all the taxes on
the house; however, he was in sole possession as well. As a result, B will have a claim against E
for reimbursement only if B paid more in taxes than the rental value of the property.

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Rent Payments from Tenant (T)

As explained above, a tenant in possession need not reimburse her co-tenant for the rental value
of her use of the land unless there has been an ouster. However, a co-tenant out of possession
has a right to share in rents form third parties. While B was in exclusive possession of the house,
he leased the basement to T, receiving $500 per month for seven months. A was entitled to share
in the rent received. Thus, E has a claim against B for A’s portion of the $3500.

3. T’s Rent Obligations

Tenancy for Years

A tenancy for years is one that is to continue for any fixed period of time. In most states, the
Statute of Frauds requires that a lease creating a tenancy for more than one year be evidenced in
a signed writing. A tenancy for years ends automatically on its termination date, without either
party needing to notify the other. However, other situations can cause such a tenancy to
terminate prematurely, such as when the tenant exercises a remedy for the landlord’s breach.
Here, B leased the property to T for one year under a valid written lease. Thus, he created a
tenancy for years.

Covenant of Quiet Enjoyment – Constructive Eviction

Implied in every lease is a covenant that neither the landlord nor someone with paramount title
will interfere with the tenant’s quiet enjoyment and possession of the premises. One way a
landlord can breach this covenant is through constructive eviction. This means that if a landlord
does an act or fails to provide some services that he has a legal duty to provide, thereby making
the property uninhabitable, the tenant may terminate the lease and seek damages under this
theory. The tenant can claim constructive eviction only if: the landlord – not a neighbor or
stranger – breaches a duty to the tenant; the breach substantially and materially deprives the
tenant of her use and enjoyment of the premises; the tenant gives the landlord notice and a
reasonable time to repair; and the tenant vacates the property within a reasonable time.

However, a landlord has no common law duty to repair or maintain the premises – the duty must
be provided for in the lease or required by statute or by the implied warranty of habitability.
Here, B failed to fix the plumbing; T could establish that a malfunctioning toilet and drain make
an apartment uninhabitable; and T moved out after repeatedly complaining to B and then
attempting to have the plumbing fixed. Therefore, T could claim constructive eviction only if B
had a duty to repair faulty plumbing.

Implied Warranty of Habitability

The majority of the states have adopted this warranty for residential tenancies. Standards are
more favorable to tenants than with constructive eviction, and the range of remedies for breach is
broader. Courts usually apply be local housing code if one exists; if there is none, the court asks

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whether the conditions are reasonably suitable for human residence. T can establish that a
consistently malfunctioning toilet and drain qualify under this standard.

When a landlord breaches the warranty of habitability, courts have allowed tenants to: move out
and terminate the lease, as in constructive eviction; make repairs directly and offset the cost
against future rent obligations; reduce or abate rent to an amount equal to the fair rental value in
view of the defects in the property; or remain in possession, pay full rent, and seek damages
against the landlord. Here, T repeatedly notified B of the plumbing problem, after which T
attempted to make repairs directly, offsetting the cost against a future rent obligation. Following
the unsuccessful repair attempt, T moved out and terminated the lease. This was a valid exercise
of T’s remedies for B’s breach of the implied warranty of habitability. Thus, T is not obligated
to pay rent for the months remaining in the original lease term, and T does not owe B the $500
withheld.