Individually subdividing private possession co-ownership Flashcards
(37 cards)
Tenancy in Common
o Presumptive state of co-ownership
o Separate but undivided interests in the property; each owner is entitled to simultaneous use and possession of the whole parcel
No survivorship rights; descendible, devisable, alienable
Owners can voluntarily move for partition
Can arise by deed, devise, or by severance
Joint Tenancy
o Majority rule: Granted through explicit language, i.e. “To X, as joint tenants with right of survivorship”
o Like tenants in common, joint tenants have an undivided right to use and possess the whole property.
If one joint tenant transfers interest, joint tenancy is severed
• By conveyance
o Sale of interest to third party
• By consent
o Sale of interest to cotenant
Court will look for legit conveyance (consideration)
o By partition
o CANNOT be severed by will
Tenhet
Joint Tenancy - Four Unities (Common law and some jdxs)
- Time – interests must vest or be acquired at the same time
- Title – interests must be shared by instrument
- Interest – interests must be identical and equal in size and duration
- Possession – all joint tenants must have a right to possession, use, and enjoyment of the whole
Do leases implicitly sever JTs
Tenhet
o “A joint tenant may, during his lifetime, grant certain rights in the joint property without severing the tenancy.
o “But when such a joint tenant dies his interest dies with him, and any encumbrances placed on the property become unenforceable against the surviving joint tenant.”
A and B own Blackacre as joint tenants. A takes loan from C and puts up his joint interest in Blackacre as collateral. Five years later, A dies, devising all his property to D.
• Does the mortgage sever the joint tenancy?
o Most courts hold no (lien theory, TX) – does not end joint tenancy b/c unities are preserved
o Some courts hold yes (title theory) – mortgage is seen as conveyance of title, which severs unity
• C’s security interest does not survive A’s death in most jdxs
Tenancy by the Entirety
o A unit that owns the whole, but not separate divided shares of the whole
o Exists only in common law, not community property
Some TbE states assume conveyance to married couples presumptively tbE
Others require explicit language in conveyance
o Requires language “to A and B as tenants by the entirety”
Cannot be severed unilaterally, only through death or divorce
No rights of partition
Any separate conveyance by either spouse is void – cannot be separately alienated, Sawada
• Formalist – indivisible
• Functionalist – home protection, favors families and protects the family over creditors and unraveling the family home
Partition in Kind
physical partition
Presumptive option – preferred (Ark Land)
• Arkland – economic value of property is NOT exclusive test for determining whether partition in kind or partition by sale
o Interests of all tenants must be considered
o Commercial interest would always prevail in that case…
More appealing if they actually live on the land (sentimentality)
Partition by Sale
– forced judicial sale and proceeds are split according to the percentage owned (Ark Land just would’ve bought when went on sale)
Doesn’t account for sentimental value, someone will inevitably be shortchanged
Requirements –
• 1. Impracticability of partition in kind, and
• 2. Fairness/interest balancing
o Consider Pareto v. Kaldor-Hicks variations
Pareto says only if no one worse off can you move forward
Kaldor-Hicks – those that are made better off can offset those that are made worse off
Contribution during Co-Tenancy
o Rents – During occupancy, no owners must pay the other owners for rent
Pro rata share owned for rental to third parties
Possible obligations by sole owner-occupiers after occupancy ends
o Profits – Sharing obligations during occupancy, based on actual receipts and not FMV
o Taxes or Mortgage Payments – Co-tenant who pays more than his share is entitled to equitable share from other co-tenants
Minority rule – only co-tenants in possession must pay
No contribution during co-tenancy
o Improvements – No right of repayment during occupancy
Increased market value reflected at sale allocated to improver
Partition may include allocation of improved portion
o Necessary Repairs – No right of repayment during occupancy
Possible reimbursement via accounting action
Upon sale, credit for repairs
Ouster
• Actual Ouster – Physically preventing co-owners’ exercise of property rights (primarily use and exclusion), ie lock them out
• Constructive Ouster – Effectively preventing co-owners’ use of property by unreasonably interfering with their property rights (primarily use or exclusion)
o Emotional: usually divorce, requires mutual hostility, see Olivas (Husband argued to be pulled out as opposed to pushed out due to affair)
• Remedies
o Rent, necessary repairs upon sale/accounting
Common law marital property (Majority)
o Both spouses separately own property
o H&W are regarded as separate entities
o They each own what they earn, inherit, or are given
o Unless they opt into some co-ownership device, e.g., joint tenancy
Community property
o 9 states – LA, TX, NM, AZ, CA, NV, WA, ID, WI; AK and TN allows couples to opt in (also PR and several Indian tribes)
o H&W are regarded as a single indivisible entity (cf. tenancy by the entireties): the marital community
o The MC owns what each spouse earns during marriage, as well as any gifts to the community
o The spouses separately own pre-marital property as well as what they acquire via gift, descent, or devise during marriage
Prenuptial Agreements
o Presumptively enforceable, unless
Party did not sign voluntarily (duress), or
Agreement was
• Unconscionable when made
• Party did not receive full and fair disclosure
• Party did not waive right to disclosure, and
• Party could not have reasonably learned relevant information
Tenancy by the entireties conveyance
Majority view: cannot be conveyed unilaterally (Sawada)
Minority view: can be conveyed unilaterally
o Policy Considerations
Formalistic – indivisibility of the TbE where the interests of a husband or wife in a TbE are not subject to the claims of his or her individual creditors during the joint lives of the spouses; but also negative effect on the availability of loans
Functional – home protection, concerned about the home and family over creditors
Typology of State Responses - Married Women’s Act
Group I: No effect. H still has total rights of control over marital property. W has no such rights.
Group II: Marital property can be attached to satisfy debts of either spouse, subject to RoS.
• Implication – could attach the judgment, but if the right of survivorship means that he has no interest then out of luck.
Group III: Any separate conveyance by either spouse is void (including debt).
• Implication – cannot attach property to satisfy a judgment lien.
Group IV: Right of survivorship is alienable by either spouse, but rights during marriage are not.
• Implication – Only get an attachment if the one being sued outlives the other spouse.
Group V: MWPAs eliminate TbE.
• Implication – Can attach debts regardless of joint tenancy.
Are educational degrees marital property?
o Most states: not property (formalist view)
Guy: MI is officially formalist but doesn’t mean not entitled to reimbursement
o Some states: property (functionalist view)
Death & Elective Share Statutes
o Elective share (or force shared) legislation exists in all but one common law property state but no community (except GA)
o Surviving spouse is entitled to take some percentage of the decedent spouse’s estate, rather than what the surviving spouse would get under a will
Usually ½ or 1/3 (TX uses this approach w/r/t non-CP assets)
Divorce
• Historically, divorce available only if you could convince a court marriage was flawed
– E.g., adultery, abuse
– Property then went to title owning spouse
• ~1970, no-fault divorce became the norm
– Initial rule for property: equitable distribution
– Modern trend: equal distribution presumption
• Courts consider two questions:
– What is in the marital estate?
– Who gets it?
Types of Leasehold Estates
o Term of Years
Span determined by any period with a fixed, certain end date
o The Periodic Tenancy
Span determined by succeeding periods, e.g., month to month
o Tenancy at Will
No fixed period. (if fixed period is not certain, tenancy at will)
• Fair notice requirement in TX
• L leases to T for “as many years as T desires.”
o Tenancy at will under TX law, see Effel
o Minority rule: leases can specify sole terminability, see Garner (NY case)
o Tenancy at Sufferance (Holdover)
created when a person who rightfully took possession of land continues in possession after that right ends.
Landlord has two remedies –
• L may either evict or impose holdover tenancy.
• State law limits length of term to prevent L abuse.
o TX: new lease term is presumed month to month, though L can raise rent.
Variant state approaches to the holdover problem
- No states allow imposed term of more than one year.
- Most states: holdover creates month-to-month (periodic) tenancy, with some penalty (e.g., double rent).
- Some states: holdover imposes new one-year term.
- Some states: holdover imposes new term identical to previous one (capped by first rule).
L must unambiguously intend to treat T as holdover.
• I.e., choice is between eviction and holdover tenancy
Defining delivery of possession
o American rule: L must deliver only legal right to possession
o English rule: L must deliver both legal right to possession and actual premises (Keydata)
Assignment v. Sublease
Assignment – (more common in commercial settings):
• A new assignee takes over the initial tenant’s lease term;
• Assignee is in privity of estate with lessor, liable to lessor for damages/rent on a property theory;
• Initial tenant remains in only privity of contract and would be liable to lessor only on contract theory.
Sublease – (more common in residential settings)
• Tenant has executed second agreement with sublessee for part of remaining lease term;
• Tenant remains in privity of contract AND estate with lessor, and tenant is liable to landlord for any damages or lost rent incurred by sublessee on both property and contract theories.
This all assumes there is no novation voiding the K between lessor and initial tenant.
Look to the intent of the parties, as the actual words “sublease” or “assignment” are not conclusive, Ernst
• Landlord can limit sublease/assignment through clear lease terms and implied commercial reasonability limits
o Sole Discretion Clause – L may refuse/limit sublease/assignment for any reason
o Reasonableness Clause – L may refuse sublease/assignment only on commercially reasonable basis
o Silent Consent Clause – L may refuse sublease/assignment, must be commercially reasonably but L sole discretion is also implied
Tenants in Breach
o Tenant in Possession
Summary Proceedings are a quick and efficient means by which to recover possession after termination of tenancy
o Surrender v. Abandonment
Surrender – landlord and tenant agree to end the lease early
Abandonment – tenant vacates without justification and stops paying rent; triggers mitigation doctrine
o Tenant who has Abandoned Possession
Duty to Mitigate –If Landlord makes reasonable efforts to mitigate, can recover all rent tenant should have pain under the lease that is not paid by replacement tenant
• If landlord doesn’t make an effort, he forfeits the amount - Sommer v. Kridel
o “Reasonable efforts” – advertise and show unit, reasonable rent and terms; treat abandoned premises as part of vacant stock
• Tenant always owes landlord all losses that cannot be reasonably mitigated
