Unit 4 Flashcards
(53 cards)
Tenancy in Common
Presumption of TIC (if courts get stuck, this is where they’ll go)
No right of survivorship
Can partition their interests via agreement or court action
Devisable & descendible
One “unity” (possession)
Flexible: difference % ownership, can be created at different times
Joint Tenancy
Presumption of JT under the CL (that presumption is now gone for TIC)
Rights of survivorship
Requires the four unities (TTIP)
Can sever JT & transform to TIC by unilateral action
Requires “magic words” to create
Rigid requirements: same % ownership, created at same time & in same instrument, some possessory estate interests
Tenancy by the Entirety
Can only exist between spouses
Right of survivorship (not severable unilaterally - need both people)
Only distinction from JTs is that it was not severable
5 unities (4 unities + marriage)
Have to have marriage (if not considered legal marriage under the state, it won’t work as TbyE)
Not always available everywhere
Treats the couple as a single person, single economic unit
On divorce becomes a TIC
Property held in TbyE can’t be reached by creditors for an individual spouse
What is survivorship?
Interest disappears at death
Upon the death of a co-owner, that owner’s interest disappears, & the surviving co-owner(s) hold the entire interest in the property
JT & TbyE
Four Unities
Unity of time: the interest of the joint tenants arises at the same time
Unity of title: the interest must be created by the same instrument at the same time
Unity of interest: the tenants have the exact same interest
Unity of possession: common right of possession & enjoyment
Intent to sever a joint tenancy
Default rule:
- Contract to sell signed by all joint tenants is not seen as dissolving
- Divorce decree/property settlement maybe default is it should be dissolved (?)
Magic words for joint tenancy
“To A & B, as joint tenants”
“To A & B, as joint tenants with right of survivorship”
“To A & B as joint tenants with right of survivorship, & not as tenants in common”
True for all co-tenancies
Each tenant has right to possess the whole (if possession denied, there’s liability for ouster)
Contribution/accounting
Can partition & end the co-tenancy
What happens if one of these four unites isn’t met?
It wasn’t a JT, but instead a TIC
So straw people were often needed, since a currently existing owner couldn’t create a JT with another person, as that’d violate unity of title/time
Alternative approaches, such as intent approach - grantor’s intent in making a JT with right of survivorship is what matters, not the formalism
Survivorship & Severance
The JT is severed, & survivorship is terminated, when any of the “Four Unities” (TTIP) are broken
Upon severance, a JT becomes a TIC (meaning survivorship is no longer in effect)
Jones v. Shannon: a divorce decree doesn’t automatically sever a JT, but it may be evidence of an intent to sever. Intent turns on whether parties have acted in a way that is inconsistent with a desire to retain survivorship among them
JT Severance: Effect of a Sale
One JT’s sale of their indv interest to another person will sever the JT for that indv
But that doesn’t mean that a k by all JTs to sell one their joint interest -> severance only if there was intent to sever in that particular case
If one person signs, clear they intend to take interest out of box. If all working together & doesn’t look like they want to sever their interests into indv interests (Estate of Phillips v. Nyhus)
Albro v. Allen: A person sharing a joint life estate with full rights of survivorship may convey his interest without destroying the remaining joint tenant’s right of survivorship
Crowther v. Mower: a joint tenant’s valid conveyance of his interest in the property terminates the joint tenancy. JTs are terminated when one party severs (via a valid transfer), this was a valid transfer even though it was secret, and thus it transformed into a TIC
General severance rule: if one party acts in a way that is inconsistent with intent of right of survivorship, that right of survivorship goes away
Transfer of real property ownership occurs when the deed is delivered (Crowther)
JT Severance: Effect of a Gift
One party’s gift of their interest to another person will always sever that interest from the joint tenancy
Conveyance of title occurs at delivery of a deed
Mortgage Financing
3 theories: title, lien, & intermediate approach
Title Theory
A mortgage given by a JT on one’s own home severs the JT
Thus, mortgage (& deed of trust) has the same effect as a unilateral conveyance of the real estate by a JT
Minority approach
Lien Theory
What is at play in Brant. Conveying less than the entire interest to a third party won’t sever the JT
Lien: a “hold or claim” which one has on the property of another as security for debt or charge. It “binds the property to the debt” for its satisfaction
Majority/modern approach
Intermediate Approach
Mortgagor retains both legal and equitable title until the mortgage goes until default. After default, legal title passes to the mortgagee as if it were a title theory jurisdiction.
Even smaller minority of states follow this
Contribution
Esteves v. Esteves: when a tenant who has been in sole possession of the property demands contribution, fairness & equity require the one seeking contribution to allow a credit for the value of sole occupancy
Co-tenants are responsible for property maintenance costs (necessary/known costs) pro rata per ownership percentage (based on ownership, doesn’t matter if you live there)
A tenant who has been paying more than their share of necessary maintenance costs for the property may seek pro rata contribution from non-paying co-tenants
If property is held in a cotenancy, there are two general rules applicable to the distribution of proceeds upon sale of the property:
- Each cotenant must pay his pro rata share of the operating and maintenance expenses for the property
- Even though one tenant enjoys sole occupancy of the property, the non-possessing tenant has no right to receive rent from the tenant in possession.
- Even with general rules, for the sake of fairness and equity, that if a cotenant in sole possession demands contribution for operating and maintenance expenses from the non-possessing tenant, the tenant in possession must allow a corresponding credit for the value of his sole occupancy
Absent Co-Tenant
A co-tenant in sole possession of the property won’t affirmatively owe rental payment to any absent co-tenant unless:
- There has been ouster of the absent co-tenant; or
-The co-tenants have agreed otherwise
Ouster
Eviction/removal or possession prevention
It’s exclusion, not just exclusivity
If there has been an outster, then tenant in sole possession owes the ousted tenant payment of rental value of exclusive possession
- Rental value = fair market rental for property (for the ousted period) multiplied by percentage of ownership of the ousted co-tenant
Ouster & Adverse Possession
A co-tenant can adversely possess against other co-tenants but it’s hard. Only way to claim possession is adverse is if you ousted the other party.
Wright v. Wright: there can be no adverse possession against a cotenant absent an actual outster, exclusive possession after demand, or express notice of adverse possession
In addition to the traditional elements of adverse possession, a party who seeks to adversely possess against a cotenant must either: (1) effect an actual ouster; (2) retain exclusive possession after demand; or (3) give the cotenant express notice of adverse possession.
Exclusive possession, paying of taxes, and making of improvements by themselves are insufficient to establish ouster, but such acts in addition to other unequivocal acts of ownership, such as selling or leasing the disputed property, can establish adverse possession.
The express notice criterion is accomplished by demonstrating that: (1) actual notice was brought home to the cotenant, or (2) there are unequivocal, open, and public acts that make the possession hostile, exclusive, and notorious, such that there is a presumption of notice.
Ouster in 2 Contexts
Esteves v. Esteves: an occupying cotenant in possession who ousts a fellow cotenant becomes liable to the ousted cotenant for the percentage of the fair rental value of the premises
- 2 approaches
- Old: if there’s ouster -> liable for ½ rental value
- New used here: consider 3 factors & calculate reasonable values
1. Rental value
2. Other circumstances of living (his labor)
3. Sole possession equity (the practicality of co-tenant living there)
Wright v. Wright: ouster of a co-tenant by the co-tenant in possession determines when the clock begins to tick for AP
Finding Ouster
Just because one co-tenant remains in possession (even alone) doesn’t automatically mean ouster. A co-tenant has a right to possess the whole property unless there is an act of exclusion
What constitutes an ouster: there must be actual exclusion of the other co-tenant or a clear denial of their rights
Demand to enter & refusal strengthens ouster claim
Courts look for intent to exclude the other co-tenant - not just passive occupation
Contribution + Absent Co-Tenant
If a tenant in possession seeks contribution from an absent co-tenant, then the absent co-tenant may offset the Rental Value against the contribution amount due to the tenant in possession
