Property Law Outline - Concurrent Interests

  1. Tenancy in Common (non-marital)
    1. Features
      1. No right to survivorship.
        1. Upon death, right descends to heirs, not to co-tenants.
      1. Can be accessed by creditors.
    1. Creation
      1. Can be created expressly in a grant or will or by operation of law.
      1. Can be created through operation of law if several people inherit a particular piece of property.
        1. Presumption - court assumes TIC unless devise specifically states otherwise.
        2. Can also occur if a grant to two or more persons does not create a valid joint tenancy OR if it is ambiguous as to the type of concurrent interest intended.
    1. Termination
      1. Death of a co-tenant does not terminate a TIC.
        1. Tenancy passes to heirs or devisees, who become tenants-in-common with the surviving co-tenants.
      1. Therefore, the only way to terminate a TIC is by transferring all the interests to a single person or by "partitioning the property."
        1. Right all tenants have if they disagree with the management of the property.
        1. Partition can be:
          1. "In kind"- land is physically divided;
          2. "By sale"- property is sold and proceeds are divided;
          3. "By appraisal"- one co-tenant buys out the others at appraisal price. 
  1. Joint Tenancy (non-marital)
    1. Features
      1. Right to Survivorship
        1. Upon death, passes to joint tenant, not to heirs even if specifically directed in will.
      1. Avoids probate ("poor man's will")
        1. Has made JT must more popular in the last century.
      1. Cannot be accessed by creditors after interest has passed to co-tenant.
        1. Ex. People v. Nogarr (p.193)
          1. One JT took out a mortgage on his part of the property without knowledge of other JT. After his death, creditor came, tried to take his half of property.
          1. Held that if title passed with the mortgage, that would destroy unity of title and would create TIC that creditor could get to. Because this mortgage only put lien on property, none of the unities were destroyed. Was a JT, passed directly to other JT, nothing for creditor to get at.
          1. This is a bad ruling for creditors; in states where liens rather than title pass with mortgages, creditors require signatures from both JTs.
    1. Creation
      1. "Four Unities" required:
        1. Unity of interest - interests granted must be identical.
        2. Unity of title - interests must be created in the same grant/instrument.
        3. Unity of time - interests must vest at the same moment.
        4. Unity of possession - required owners to have equal rights of access to and use of all portions of the land.
      1. Third party straw man often used to create the interest so that it fulfilled the four unities.
        1. Some states have disregard this rigid application of the rule.
        1. Some states have abolished joint tenancies altogether, and most other states favor tenancies in common over joint tenancies.
          1. Presumption is in favor of tenancy in common unless the words "joint tenancy" or "joint tenants" are used.
    1. Termination
      1. By contract if all JTs agree.
      2. Simultaneous death of all JTs.
      3. Murder of one JT by other JT.
      4. Divorce of JTs.
      5. In some states, by unilateral act of one JT.
        1. Policy arguments for unilateral termination…
          1. Inefficient to just convey interest to straw man then convey back.
        1. Policy arguments against unilateral termination…
          1. Fairness and notice issues for the party  in the dark.
          2. Party in the dark would have an incentive to find and destroy the unilateral instrument. (some states require recording now to prevent fraud)
        1. Ex. Riddle v. Harmon (Supp)
          1. Husband and wife JTs, wife did not want husband to get her share after her death. Drew up document that purported to terminate the JT and grant herself 50% interest in the property. Destroyed time and title unities. Husband was unaware.
          2. Held that she could unilaterally terminate the JT and create a TIC. Old rule of requiring straw man is inefficient and based upon medieval assumptions.
  1. Tenancy by the Entirety (marital)
    1. 4 Unities + Marriage. (need explicit language too)
    2. Same as JT but cannot sever through conveyance to third party.
    3. Severing is only available through contract or divorce.
    4. One TBE co-tenant may not take out mortgage without consent of other TBE co-tenant.
  1. Co-tenants' Rights and Obligations
    1. Partition- judicial procedure to end TIC or JT.
      1. Is a RIGHT- doesn’t matter if it is inconvenient to co-tenants.
      2. Occurs when co-tenants no longer agree on management of property.
      3. Can be:
        1. "In kind"- land is physically divided (FAVORED);
        2. "By sale"- property is sold and proceeds are divided;
        3. "By appraisal"- one co-tenant buys out the others at appraisal price.
      1. Courts can order compensatory adjustment to take into account inequalities in expenses incurred or benefits derived from the property.
      1. Issues with physical (in kind) partition:
        1. Might not promote interests of owners.
        2. Might not be most efficient method.
        3. NOTE: What are the goals of property we are trying to further here?
      1. An agreement not to partition could be a restraint on alienation.
    1. Possession
      1. Each co-tenant has the right to possess and use entire property.
        1. Therefore, co-tenants not in possession cannot demand an accounting for rental value of property.  A co-tenant can't be forced to pay rent to another co-tenant.
        2. Also, co-tenant can't be compensated for profits derived through occupying co-tenant's own labors (but can if he depletes resources- see below).
      1. Ouster occurs if one co-tenant bars another from using the property.
        1. Ousted co-tenant can seek an injunction and damages.
        2. NOTE: Occupying tenant's claim can ripen into an adverse possession claim after ouster.  Usually, co-tenants can't adversely possess, but if they oust others, they can.
    1. Contribution
      1. A co-tenant can demand contribution for certain expenditures, such as taxes, mortgage, insurance, and vital repairs.
        1. However, cannot demand contribution for improvements to the property unless there was a prior agreement pertaining to them.
        2. When partitioning occurs, courts try to give improver the improved land or money for the improved value.
      1. Accounting
        1. Arises when:
          1. The co-tenant leases to a third party and must share proceeds with other co-tenants.  One co-tenant cannot lawfully sign a lease binding all tenants w/o the consent of the other co-tenants.
          2. A co-tenant has depleted natural resources.  A co-tenant usually is unsuccessful in a claim of waste.  BUT, can recover some proceeds from depletion through accounting.
        1. Questions in an accounting claim:
          1. Were the other co-tenants excluded?
          1. Was the resource depleted in a wasteful way?
          2. Did the co-tenant take more than their share?
            1. NOTE: This may depend not just on quantity taken/quantity available, but also on quality of natural resource taken.  Depends on characteristics of resource.
            1. Ex: White v. Smyth (p.204) White took less than 1/9 of rock asphalt on land that he was 1/9 part co-tenant in.  However, he took the most accessible and best asphalt. 
              1. Court held that he took more than his share and owed money to Smyth in accounting.  No partition in kind b/c nature of resource was not uniform so it would be difficult to divide up.
              2. Court also held that the finished product rock asphalt was not sufficiently changed from original mineral, so White owed 8/9 of proceeds to Smyth, not just 8/9 value of raw asphalt.  Note the accession argument here.
            1. BUT SEE: Kirby Lumber Co.- Here, co-tenant with 2/3 share cut down timber on property.  Because this is a uniform natural resource (timber), co-tenant only had to account for timber cut down in excess of his 2/3 share.