Concurrent Ownership

Property Law
 Types of Co-Ownership

 Tenancy in Common
 Joint Tenancy
 Tenancy by the Entirety
 Types of Co-Ownership

Commonalities (absent agreement

otherwise):
• Each tenant has the right to possess the
entire property
• Each tenant has the right to share in profits
from the property
• Each tenant has the obligation to share the
basic costs to maintain the property.
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 Types of Co-Ownership

Differences (absent agreement

otherwise):
• How the cotenancy is created
• Right of survivorship
• Severance and termination of the
cotenancy
• Encumbrances on the property.

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 Tenancy In Common
Tenancy in common is a concurrent
interest in which co-tenants each own a
fractional but undivided share of the
property.
• “undivided” means each tenant,
regardless of the fraction he holds, has
the right to use and possess the whole of
the property, subject to the same right in
each co-tenant.
• There is no right of survivorship
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Tenancy In Common --Creation

• TIC can be created expressly or,

where instrument is ambiguous,
modern law will presume a tenancy in
common.
• There can be unequal shares (e.g., A
can hold 1/3 TIC interest and B can
hold 2/3 TIC interest)
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Tenancy In Common –Severance and
Encumbrance

Each tenant can transfer or encumber his or

her share unilaterally without consent of other
cotenants.
◦ Conveyance by one TIC to a third party.
◦ Transfer on death of TIC (there is no right of
survivorship in favor of other TICs)
◦ Partition – lawsuit (judicial partition) or
agreement (voluntary partition) to divide
TIC property, either “partition in kind” or
“partition by sale”
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 Joint Tenancy

Co-ownership where each tenant owns an

undivided interest in the whole estate and
each tenant has right of survivorship (ROS)
• ROS = on death of one joint tenant, the
surviving joint tenant(s) automatically
owns the deceased joint tenant’s interest
and nothing passes to the heirs of the
deceased joint tenant.
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 Joint Tenancy - Creation

Creation requires FOUR UNITIES:

1. Unity of time (interests created at the same time)
2. Unity of title (interests acquired by same instrument or title)
3. Unity of interest (tenants have equal fractional shares in the
property and the shares must last the same amount of time)
4. Unity of possession (all joint tenants have the right to possess
the entire property)
Some states have abandoned the four unities in favor of an ‘intent-
based’ test.

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 Joint Tenancy - Creation
• JT is always created by deed or will, never by
intestacy
• There must be two or more grantees; JT can’t
be created in one person
• Conveyance must specify joint tenancy with
clarity; the law presumes a TIC if “right of
survivorship” is not clearly stated.

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 Joint Tenancy - Severance

Any joint tenant can destroy joint tenancy (with its ROS)
at any time, which results in the parties holding as TICs.
Ways to sever:
◦ Inter-vivos (during life) conveyance by one joint tenant to a
third party.
◦ Partition – lawsuit or agreement to sever the joint tenancy
[partition in kind (physical) and partition by sale ($)]
◦ Divorce of Joint Tenants – an implied agreement to sever
◦ Merger – conveyance to another JT
Severance affects the selling owner’s interest; any remaining joint
tenants retain ROS

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 Tenancy by the Entirety

A form of co-ownership similar to joint tenancy

based on the common law concept of unity of
husband and wife as one person.
Available only to married couples.
Like joint tenancy, each spouse owns the whole
estate and not a fractional part of it. There is
ROS.
Available in about half the states.
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 Tenancy by the Entirety

Creation requires FIVE UNITIES:

1. Unity of time
2. Unity of title
3. Unity of interest
4. Unity of possession
5. Unity of person (i.e., husband and wife)

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 Tenancy by the Entirety
Rights during marriage
• Husband and wife share equally possession and all
rents and profits;
• Each spouse has right of survivorship
• One spouse cannot sever or partition T by E
property, unless with consent or on divorce
• One spouse cannot sell, transfer or encumber
without consent of other spouse
• Separate creditors cannot attach T by E property
to satisfy debts of one spouse. Joint creditors of
both H & W can attach T by E property.
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Recap – Concurrent Ownership

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Sharing Rights and Responsibilities

 Possession
 Profits
 Burdens
 Sharing Rights and Responsibilities
Possession
• Each co-owner has the right to possess the entire
parcel.
• Cotenant in possession (CoTIP) has no duty to
pay rent to cotenant out of possession (CoTOP),
unless there is an ouster
• Ouster is an explicit act of the CoTIP to exclude
CoTOP from the property
• After ouster, the rent owed by CoTIP to CoTOP is
the CoTOP’s fractional share of the fair rental
value (FRV) of the property.
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Conflicts over rent and possession

Olivas v. Olivas (NM 1989)

• What is a “constructive ouster?”
• What is the result of a constructive ouster?
• Co-TIP may have an obligation to pay rent if, even
though no actual ouster, the realities of the
situation, without any fault of either party,
prevents the cotenants from sharing occupancy.
• What is the difference between an ouster and an
abandonment?
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 Sharing Rights and Responsibilities
Profits
• Each co-owner is entitled to his or her
fractional share of rent paid by third party
lessees.
• A co-tenant has the right to lease the
property without consent of other cotenants;
lessee has right to possess entire parcel.
• Cotenants share profits on sale or partition of
the property according to their fractional
share of the property.
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 Conflicts over Unilateral Transfers

Carr v. Deking (Wash. 1988)

• Father and son TICs and leased property to
Deking annually for a crop share; Father
changes arrangement and leases to Deking
for 10 years without son’s consent.
• Son sues to invalidate the 10-year lease.
Deking argues for partition.
• Rule: TIC may lawfully lease his interest to a
third party without consent of other
cotenant, but lessee steps into the shoes of
the lessor – what does24this mean?
 Sharing Rights and Responsibilities
Burdens
• Cotenants must share basic expenses
needed to keep ownership of the property:
• Mortgage payments
• Property taxes and assessments (e.g. HOA)
• Property insurance
• Cotenants must share the costs of basic
maintenance and necessary repairs (although
courts are all over the map on what is
‘necessary’)
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 Sharing Rights and Responsibilities
Burdens
• Cotenants have no duty to share the cost of
improvements absent an agreement.
• Only on sale or partition of the property, an
improving cotenant may claim contribution
from the other cotenants for
improvements, but only of the amount by
which the improvement increases the value
of the property, not necessarily the cost of
the improvement.
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 Sharing Rights and Responsibilities
Burdens
• A Co-TIP possessing exclusively must pay all expenses
(mortgage, taxes, insurance, necessary repairs and
maintenance) if the CoTIPs share of the FRV of the
premises exceeds those costs.
• So, if the CoTOP’s share of those expenses is less than the
CoTOP’s share of FRV, the CoTOP has no obligation to
contribute.
• In other words, although a Co-TOP cannot sue a Co-TIP for
rent (absent ouster), a CoTIP in exclusive possession can
sue a CoTOP only for the CoTOPs share of expenses that
exceeds the FRV to which the CoTOP would be entitled if
the property were leased out to a third party.
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Sharing Rights and Responsibilities
Problem 1, page 673
Formula:
(Carrying costs – FRV) / # Tenants =
CoTOP’s contribution to CoTIP

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 Sharing Rights and Responsibilities
Problem 1
Formula:
(Carrying costs – FRV) / # Tenants =
CoTOP’s contribution to CoTIP
(500-1000) = -500/2 = -250 so B owes
nothing
(1200-1000) = 200/2 = B owes 100

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Sharing Rights and Responsibilities
Problem 2, page 673
Formula:
(Sales price–value of improvement)/
#tenants = Non-improver’s share
Improver receives same + value of
improvement

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 Sharing Rights and Responsibilities
Problem 2
Formula:
(Sales price–value of improvement)/ #tenants =
Non-improver’s share
Improver receives same + value of improvement

 A’s share: (200,000 – 15,000) = 185,000/2 = $92,500

 B’s share 92,500 + 15,000 = $107,500
 A’s share: (200,000 – 8,000) = 96,000
 B’s share: 96,000 + 8,000 = 104,000
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 Sharing Rights and Responsibilities

• Accounting – cotenants can bring a judicial

proceeding to have a court determine each
owner’s financial obligation and to obtain court
order for reimbursement/contribution or for
payment of share of third-party rents.
• Generally, Co-TIP has no duty to account to Co-
TOP unless there is an ouster or depletion of a
natural resource
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Conflicts over rent and possession

Depletion: the Co-TIP has a duty to account

to Co-TOPs if he depletes the land (e.g., Co-
TIP must split mining profits with Co-TOPs as
minerals are extracted).
• Different rule for farming and timber requires
accounting prior to extraction because Co-TIP can
fractionalize his/her interest and use only a portion of
the natural resource from the property.
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Conflicts over Unilateral Transfers

Tenhet v. Boswell (Cal. 1976)

• Did cotenant’s lease of the
property sever the joint
tenancy?
• Did surviving joint tenant take
the property free of the lease?
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 Conflicts over Unilateral Transfers
Does a lease severs JTROS?
• Majority rule (CA): A lease by one JT
does not sever JTROS
• Minority rule: Surrender of property
by lessor JT to a 3P lessee destroys
‘unity of possession’ with non-lessor
JT and severs the JTROS into a TIC.

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 Conflicts over Unilateral Transfers
Does a mortgage sever JTROS
• Majority rule (CA): a mortgage does not
sever JT, but foreclosure does because it is
a transfer of the JT’s interest in the
property to the lender.
• Minority rule: a mortgage does sever
JTROS and converts it to a TIC.

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 Conflicts over Unilateral Transfers
Tenancy by the Entireties
Sawada v. Endo (Haw. 1977)
T by E property is not liable for one
spouse’s separate debt, therefore when H
& W jointly transferred the property to their
sons for no consideration it was not in fraud
of H’s creditors because H’s creditors could
not have reached the property in the first
place..
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 Partition
Ark Land Co. v. Harper (W.Va. 2004)
Under W. Va. Statue sec 37-4-3, the presumption is
that property should be partitioned in kind; to
overcome the presumption P must show:
1. The property cannot be conveniently partitioned in
kind
2. The interests of the parties are promoted by a sale
3. The interests of the other parties are not prejudiced by
a sale
But what if, as here, the economic value is much
greater with a partition by sale?
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 Partition
Ark Land Co. v. Harper (W.Va. 2004)
Court must consider the interests of all the
cotenants, not just the economics of the
deal.
Evidence of longstanding sentimental or
emotional attachment to the property may
be considered and should ordinarily control
even if this causes an economic dis-
advantage to other cotenants.
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