Exam Guide 1 I. Right to Exclude v. Rights of Access 3



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VII. Common Ownership


1. Joint Tenancy; Tenancy in Common; Tenancy by the Entirety; Marital Property

A. RIGHTS AND OBLIGATIONS OF CO-OWNERS



Tenancy in Common: each tenant in common has “undivided interest”; no matter how small her fractional interest, has the right to possess the entire parcel unless all the co-tenants agree otherwise by contract.

  • Can be transferred by the following language: “O conveys/devises Blackacre to A and B as tenants in common

  • When a tenant in common dies, his interest goes to his devisees under his will or to his heirs under state intestacy statute


Joint Tenancy: each joint tenant has the right to possess the entire parcel, but joint tenants have traditionally been required to possess equal fractional interests in the property.

  • Can be transferred by the following language: “O conveys/devises Blackacre to A and B as joint tenants

  • Right of survivorship: when joint tenant dies, her property interest is immediately transferred to the remaining joint tenants in equal shares, so the joint tenants have no rights to devise their interests since it goes to the other joint tenants upon death

  • Requirements to create joint tenancy: (1) the interest of each joint tenant must be created at the same moment in time (2) all joint tenants must acquire title by the same instrument or title, (3) all joint tenants must possess equal fractional undivided interests in the property and their interest must last the same amount of time, (4) all joint tenants must have the right to possess the entire parcel

  • Severance: a joint tenancy is destroyed if one of the joint tenants sells their interest, so the right of survivorship is destroyed. Joint tenant who wishes to destroy the right of survivorship while retaining her life interest can convey her interest to another who conveys it back.

  • Dual life estates with alternative contingent remainders: will establish an indestructible right of survivorship, can be created in language such as “O to A and B as life tenants, with a remainder in A if A survives B and a remainder in B if B survives A.


Interpretation of tenancy in common versus joint tenancy: when ambiguous whether something is a tenancy in common or a joint tenancy, the practice is to interpret the conveyance as a tenancy in common.
Transferability of co-tenancy interests: Both joint tenants and tenants in common can transfer their interests without consent of their co-owners
Partition: both can sue for judicial partition, where the court may order the property physically divided among the co-owners and if that’s not possible the court will order the property to be sold and the proceeds divided among the co-owners in proportion to their ownership shares. Agreements among co-tenants not to partition jointly held property will likely be upheld today if they are reasonably limited in time and have a reasonable purpose.
Fiduciary obligations for commonly owned property

  • If one co-owner chooses to live on property and another chooses not to, tenant in possession has no duty to pay rent to non-possessing tenant

  • Duty to pay rent if possessing tenant ousted non-possessing tenants

  • Right to share any rents paid by possessing third parties

  • Right to lease interest without consent of other co-tenants; rents shared only if other co-tenants agree to be bound by leasehold, waiving possession rights for term of lease

  • Duty to share basic expenses (e.g. mortgage payments, taxes, and insurance)

  • Co-owner exclusively possessing bears burden of expenses


Ouster: explicit act by which one co-owner wrongfully excludes others from jointly owned property.

  • Constructive ouster arises when property is too small to be physically occupied by all co-owners


Trespass: each co-owner possesses the whole and is entitled to invite others onto premises despite any objections of other co-owners
Adverse Possession and ouster: one co-tenant cannot obtain adverse possession against another unless the possessing tenant makes clear to the non-possessory tenant that he is asserting full ownership rights in the property to the exclusion of the other’s rights because otherwise there is no trespass.
Tenancy by the entirety: available only to married couples and has been abolished in most states though still available in about 20. Have been held to violate equal protection clause by defining property in discriminatory fashion.

  • #Singersame sex couples unlikely to be allowed to create tenancy by the entirety through contract

B. CONFLICTS OVER RENT AND POSSESSION

Olivas v. Olivas, N.M. Ct. App. (1989)



  • Facts: Husband and wife separate and husband moves out. They hold home as community property during marriage and tenants in common afterwards.

  • Rule: Constructive ouster is possible when emotions of divorce make it impossible for spouses to continue sharing community property

  • Holding: Court did not find constructive ouster

C. FAMILY CONFLICTS OVER USE OF COMMUNITY PROPERTY

Carr v. Deking, Wash. Ct. App. (1988)



  • Facts: Father and son own land as tenants in common, leasing it to farmer in oral agreement for 1/3 of crop. Son informs farmer he wants cash rent. Farmer declines and executes written crop-share lease with father, without consent of son.

  • Rule: Co-tenant may lawfully lease his own interest in common property to another without consent of the other tenant and without his joining the lease; the leasee effectively becomes a co-tenant (“steps into the shoes” of leasing co-tenant)

  • Rule: Non-joining co-tenant may not demand exclusive possession, but may demand co-possession

  • Holding: Son not entitled to eject lessee, proper remedy is partition


Tenhet v. Boswell, Cal. (1976)

  • Facts: Joint tenant leases interest in property to third person, without consent of joint tenant and dies during lease. Co-tenant seeks exclusive possession as surviving joint tenant.

  • Rule: Lease does not sever joint tenancy; interest of decedent joint tenant extinguishes upon his death and lease of property also expires when lessor dies

  • Holding: Lease no longer valid

  • #Singer – feels this rule should be less forgiving in residential context than in business


Leases by one joint tenant and right of survivorship: courts are divided on whether leases sever joint tenancies
Kresha v. Kresha, Neb. (1985)

  • Facts: Husband and wife co-own land. Father leases lands to son without consent of mother. Mother wins land in divorce and notifies son she is terminating lease. Son continues occupancy.

  • Rule: Tenants in common may lease interest to third persons and party obtaining such property in divorce assumes it subject to any lease

  • Holding: Father does not encumber interest of mother and she took lands subject to son’s continuing lease agreement


Mortgages and right of surviviorship: courts are divided on whether mortgages sever joint tenancies
Swada v. Endo, Haw. (1977)

  • Facts: Plaintiffs injured in car accident. Defendant conveys property to their sons to keep it away from plaintiffs in settlement.

  • Rule: Interest of one spouse in real property, held in tenancy by the entirety, is not subject to levy and execution by his or her individual creditors absent consent of both spouses.

  • Holding: Court declines to set aside conveyance

  • Dissent: spouses take equal rights and also equal disabilities and creditors of either spouse may levy and execute upon separate rights of survivorship


Tenancy in the entirety and the Married Women’s Property Acts: courts are divided on rights of spouses in tenancy in the entirety

  • MA, MI, NC: possession and profits of estate subject to husband’s exclusive dominion and control

  • AL, AR, NJ, NY, OR: interest of debtor spouse may be sold or levied upon, subject to other spouse’s contingent right of survivorship

  • 10 states + DC: attempted conveyance by either spouse is void, estate may not be subjected to separate debts of single spouse

  • KY, TN: contingent right of survivorship separately alienable and attachable by creditors

D. SEPARATE PROPERTY



Governs property rights of spouses in majority of US
During marriage: spouses own property separately, except to extent they choose to share it. Each spouse owns whatever property they possessed before marriage and is individually liable for prior debts. Property earned after marriage also owned separately.
On divorce

  • Some states have statutes call for “equitable distribution” of property subject to (1) economic need, (2) rehabilitation, and (3) contributions of the parties

  • Some states provide for “alimony” or periodic support payments


On death: many states provide for statutory forced share, allowing widow/widower to override will and receive a stated portion of estate

E. COMMUNITY PROPERTY



During marriage: property owned prior to and acquired after marriage are separately owned. Property acquired during marriage owned equally. Couples allowed to transmute property between separate and community property by written agreement. Often require consent of both parties with respect to conveyance or mortgage of real property and assets.
On divorce: Most states adopt “equitable distribution” principle
On death: generally do not have statutory forced share statutes as spouse already vested in ½ of community property

F. OTHER ASPECTS OF MARITAL PROPERTY



Premarital agreements: generally enforceable unless unconscionable
Homestead laws: almost all states have laws designed to protect interests of surviving spouse and children in family home from claims of deceased spouse’s creditors


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