Modern Concurrent Estates
When multiple people own property at the same time they are called cotenants. Each cotenant has the right to use and possess all of the property. However, when conflicts arise, common law helps determine how the property will be used.
There are three modern concurrent estates
- Tenancy in common (Most common)
- A conveys to B and C. B and C have the right to use all of the law and their interest is divided equally. When the land is sold, they would both have an interest. These interests are freely alienable, devisable, and descendable.
- Joint tenancy
- A conveys to B and C as joint tenants with right of survivorship. That means when B dies, C (the survivor) would have the remainder of the property. However, four elements need to be met: Unity of time, title, interest, and possession. In other words, if the parties receive the property at a different time, different deed, have disproportionate interest, or unequal rights of possession, the joint tenancy is instead a tenancy in common. As such, this interest is alienable (but it becomes a tenancy in common), but it is not devisable or descendable.
- Tenancy by the entirety (Joint Tenancy + marriage)
- A conveys to B and C as tenants by the entirety. This is like a joint tenancy but ads another unity element: unity of marriage. The only way this tenancy ends is through death, divorce, or spousal agreement.
James v. Taylor
969 S.W.2d 672 (App. Ct. Ark. 1998).
What happens if the language is ambiguous?
Did the ambiguity create a joint tenancy or tenants in common?
Arkansas statute says that when there is ambiguity, a tenancy in common is favored.
The conveyance is a tenant in common. Reverse and Remand
Mrs. Redmon conveyed her land to her three children: Sewell, Sewell, and Taylor (surnames). One Sewell died, and Mrs. Redmon wished to convey that interest into the two surviving interest. Soon afterwards, Mrs. Redmon passed followed by the other Sewell child. Taylor is suing now for an injunction to obtain the entirety of the estate. Defendants are the heirs of the Sewell children.
Under the common law, any ambiguity in a deed would be resolved by looking at the intent of the creator of the deed. If that was the case, then the present facts would have created a joint tenancy with the right of survivorship. However, an Arkansas statute favors a tenancy in common when there is ambiguity.
So, the parties agree the language is ambiguous (no recognition of estates that follow the words “jointly and severally”). As such, the court favors a tenancy in common, despite the conveyers intent to create a joint tenancy.
Starting from the beginning of the analysis:
- Determine the present interests
- Redmon has a life estate
- Determine future interests
- Children have an indefeasibly vested remainder.
- Determine the nature of the concurrent ownership
- Joint Tenancy? – Taylor would win all
- Tenancy in Common? – Taylor would retain a third but her nieces and nephews would retain the other two thirds for each sibling.
In this instance, the words “jointly and severally” are ambiguous because it does not contain the precise language. Here, the terms follow the language of torts, not property (need language of survivorship). Thus, the courts follow the rules of construction. Arkansas’s rules determine that this is a tenancy in common. So, although her intentions leaned towards a joint tenancy, that is not applicable.
A joint tenancy is severed if one party conveys their interest to another. A tenancy in common is created by the remaining parties and the person who the interest was conveyed to. The following case addresses what happens if that interest is instead leased instead of conveyed.
In sum, severance only applies to joint tenancy. The severance transitions the joint tenancy to a tenancy in common by removing the right of survivorship.
Tenhet v. Boswell
554 P.2d 330 (Cal. 1976).
Tenhet is the plaintiff. She lost and appealed.
Does leasing ones interest sever a joint tenancy?
A lease does not sever a joint tenancy. When a lease is created, and the lessor dies before the expiration of the lease, then the lease dies too and the interest is conveyed to the survivor.
Joint tenancy is not severed by a lease
Johnson and Tenhet had a joint tenancy. Johnson created a lease in Boswell with his interest. Three years later, Johnson died. Tenhet, as the survivor, sought to evict Boswell who refused. Thus, Tenhet sued.
The defendant is arguing that a leasehold severs a joint tenancy. The reasoning is that a lease would break the unity of title and possession. If that is the case, then the defendant would serve as a tenancy in common with the plaintiff.
On the other hand, the plaintiff argues that the lease is valid only during the life of the lessor. Consequently, the lease serves as a life estate whose interest was conveyed. At the expiration of life, it would return to the individual who has the remainder.
Because a joint tenancy was expressly created, because there are unambiguous means of severing and none of those means were employed, the lease does not breach a joint tenancy. Instead, at the expiration of the lessor’s life, the lease is terminated and the survivors obtain the remaining interest.
The issue here is whether the issuance of the lease sufficiently alters the joint tenancy. In other words, we need to examine if the lease alters the elements of unity:
There was no evidence that that there was discussions about how this would have effected the joint tenancy. So, there would need to be evidence of an express writing stating severance.
As a result of this case, the lease lasts for either 10 years (the term of the lease involved) or the life of the lessor, whichever happens first.
Don’t need permission, can’t sever through a lease unless it is express, or can through neutral agreement. Mortgages are debatable (title severs while lien does not). Additionally, there is no way to adversely possess after the expiration of a joint tenant.
If there is a conflict that cannot be resolved, the parties can go to court for a partition. This will end the cotenancy and distribute the assets of such. The question in the case below is how? Should the court physically divide the land or sell it and divide the proceeds?
This applies when an agreement between parties (typically tenancy in common) break down.
Ark Land Co. v. Harper
599 S.E.2d 754 (Ct. App. W.V. 2004).
Ark Land Co. is the plaintiff. Won in the trial court and the defendants appealed.
Did the trial court get it right in determining that the best way to issue the land is through a partition by sale?
“Partition means the division of the land held in cotenancy into the cotenants’ respective fractional shares. If the land cannot be fairly divided, then the entire estate may be sold and the proceeds appropriately divided.”
However, partition in kind is the preferred method. Thus the party wishing the sale must show:
- No convenience to partition in kind
- Interests of the parties will be promoted by the sale
- Interests of other parties will not be prejudiced by the sale.
This test refers to both financial and sentimental/emotional interests.
The land could be partitioned in kind. Reversed and Remanded.
The Caudill family had lived on this piece of property for about 100 years. It was used as a homestead and now is used for family purposes. Ark Land Co. is a coal mining company. They purchased the majority of the interest from several Caudill family heirs (about 60%). However, the remaining heirs were unwilling to sell their remainder interest to preserve the home on the land.
Ark Land Co. took this issue to court requesting partition by sale. At trial, the defendants argued that there was no coal on the land where the home was located and therefore Ark Land could work around the home. Ark Land argued that this would add several million dollars of development costs to avoid the homestead. The trial court agreed with Ark Land saying that there was a financial benefit to all parties involved for the sale.
There are two ways to partition. First, one can divide the land based on the percentage of the interest remaining. Second, one could sell the land and divide the proceeds to the several parties. A partition in kind is preferred because one party may oppose the sale while the other largely benefits from the sale. Thus, an entity wanting a partition by sale must meet several elements to do so. When meeting those elements, the court must factor in both the financial benefits/prejudice of the parties as well as the sentimental benefits of the parties.
In this instance, the land can be divided in kind because the sentimental benefits either match or outweigh the financial benefits. The mining company had been in the area for only 3 years while the family had owned the home for over 100. The family wanted to preserve that family history. Thus, the order to sell was reversed and remanded with instructions to partition in kind based on where the coal was.
The concurrence/dissent agreed with the new rule but disagreed with the application. They argued that the family did not live there anymore and thus the only sentimental value was attributed to occasional weekend trips. Because economic production is more valuable here, the conclusion should be changed.
Takeaway from the case: economic interests are not the only interests to consider.
Options to resolve disputes include:
- Selling the property and dividing equally
- Buying out the other party
- Asking the court to partition.
- Partition by sale (Sell and divide equally)
- Partition by kind (Providing a physical division of the land – default because one party may not want to sell. So, there must be a good reason to partition by sale instead of kind).
Thus, the party wishing the sale must show:
- No convenience to partition in kind
- Interests of the parties will be promoted by the sale
- Interests of other parties will not be prejudiced by the sale.
- Maximization of economic value
- Lack of evidence of longstanding ownership and sentiment.
The takeaway: This test refers to both financial and sentimental/emotional interests.
Cotenant Rights and Duties
Who has to do what?
Esteves v. Esteves
775 A.2d 163 (Sup. Ct. N.J. 2001).
The parents are the plaintiff while the son is the defendant. Plaintiffs won in trial court and defendant appealed.
Who gets how much based on who did what?
All cotenants are liable for their interest while they are currently in occupation of the property. Thus, if they are no longer in occupation, expenses incurred by another cotenant does not add against the person who is not present.
Reversed and Remanded to determine how much the son’s total should be deducted from the finding of the trial court.
The parents and son had purchased a home for about 35,000. The son put in about 2,000 worth of labor. Shortly after, he moved out and the parents lived there for another 18 years paying the mortgage and other bills totaling around 60,000. At that point, the parents sold the home for 115,000. The issue here was to determine who gets how much based on the expenses put into the home.
The trial court determined that the son was obligated to pay half of the 60,000 but that the 2,000 worth of labor could be counted as a credit.
Because the son was not occupying the home during the 18 years, it would be unfair of the court to impose on him the entirety of half of the 60,000. As such, he is only responsible for the half of the 60,000 from his time spent in the home living with his parents.
So, the case is remanded to determine how much of the 60,000 occurred when the son was living at home. The son will then pay half of that amount minus the 2,000 labor credit.
Thus, the rule can be restated “A contenant in possession does not owe any rent to a cotenant out of possession.” In other words, the parents did not need to pay rent to the son but the son also did not need to pay for expenses of while he was not present.
Parties are able to create their own rules for who has what duties and responsibilities. However, when parties do not create such an agreement (typical), States have created rules to understand how these responsibilities are divided depending on who is using the land.
So, the question comes down to, do the parents have to pay rent for their occupancy without the son present and does the son have to pay half of the expenses incurred in management?
The trial court determines that the occupancy amounts are determined based on the percentage owned by the others. Additionally, because both parties have the right to occupancy, the fact that one party chose not to occupy does not entitle them to rent from the other cotenants (unless a cotenant is kicked out. The term is ouster. If a cotenant is ousted and does nothing, there is a potential of adverse possession).
Instead, the court determines that the son cannot collect rent but does not charge him the half of the contribution costs. What happens instead is that the costs are divided based on actual occupancy of the property.
Things that are shared Common Law:
“Each cotenant is responsible for her pro-rata share of operating expenses. Cotenant in possession can collect only the amount that exceeds rental value of property.
- Half of operating expenses
- Land Profit
- Selling natural resources from the land.
Things that are not shared under Common Law:
- Responsible for pro-rata share
- Does not owe rent to co-tenant out of possession absent ouster
- Improvement cannot compel contribution but does increase cotenant’s share at partition
- Profits from land (rent, mineral resources) are divided in pro-rata shares
- A confidential relationship exists among cotenants, so if a cotenant purchases a lien holder’s claim against property, must give the other cotenant a reasonable time to pay share and acquire proportionate interest.
Separate Property System (Majority Approach)
Spousal rights can be divided into three categories: during the marriage, at divorce, and at death.
During the marriage, anything that was owned by one party continues to be owned by that party. For instance, if the wife has 500,000 before marriage, she retains that 500,000 during marriage and anything she purchases with that money is considered her property. In this instance, the husband owns very little. However, they can choose to have a concurrent ownership or gift property one to another.
At divorce, the property owned by each is divided in a way that is just and fair (equitable distribution). Factors could include who contributed more, who has the most income needs, health concerns, etc. This is divided from property that is generated during the marriage.
At death, the surviving spouse receives a forced share where they can either take through the will or receive a defined portion of the decedent’s estate (usually 1/3 or 1/2). So, even if the spouse devises all the estate at death to anyone other than the spouse, the spouse can still take their forced share.
Community Property System (9 States Approach)
During the marriage, anything earned by either spouse is owned equally by both spouses. Anything owned prior to the marriage is still owned separately.
At divorce, the property is divided equally but some states consider equitable distribution factors. Previously owned property is not subject to this division.
At death, the decedent can devise up to half of the shared property and all of the previously owned property.
Tenancy by the Entirety
Sawada v. Endo
561 P.2d. 1291 (HI 1977).
Sawada is the plaintiff. They lost in trial court and appealed.
Whether the interest of one spouse who holds a tenancy by the entireties is subject to levy and execution by the other’s creditors.
Nether spouse has a divisible interest in property that is a tenancy by entirety that can be reached by execution. In other words, if one spouse has a debt and because the property is concurrently owned, the debtor is protected by the status of protecting the interest of the other spouse.
Affirmed, the conveyance is valid and so the creditors have no claim.
Endo negligently caused an accident that injured Sawada. Recognizing that there may be a claim against him, the spouses conveyed their only interest (home) to their son. The purpose of which was likely to avoid being required to pay the judgment against Mr. Endo.
Well, the Sawada’s won in trial but failed to collect. As such, they became creditors. They requested that the court vacate the conveyance so they would be able to collect proceeds for their injuries.
Because the spouse is protected from creditors due to the interest to protect the spouse who did not cause an offense, the conveyance is valid. As such, the creditors are unable to collect.
Tenancy by the entirety has several benefits:
- There is a right of survivorship
- There is no unilateral severance
- And there are creditor protections.
Here, the creditors were unable to attach their interest to the home because the home was held under a tenancy by the entirety. As a result, this is not a fraudulent conveyance.
There are four different approaches, they adopt the third approach:
- “The interest of a spouse in an estate by the entireties is not subject to the claims of his or her individual creditors during the joint lives of the spouse.” In other words, if a creditor has an interest against the husband, then they are not able to attach that interest to property owned together in a spouse.
There is a policy reason for the adoption of this rule. The tenancy by the entirety restricts unilateral action by one spouse. Therefore, the court wants to protect the family interest of the entirety estate.
The exception to this rule in the jurisdiction is if the interest was a tax lien. Governments are the only creditors that can attach their interest.
Defining Marital Property
Guy v. Guy
736 So. 2d 1042 (Miss. 1999).
Student Spouse is the plaintiff, lost in proceedings and appealed.
Is a professional degree marital property? If not, can the supporting spouse be reimbursed for their effort?
Although a professional degree is not marital property, the supporting spouse can be compensated if there is adequate proof about the contribution.
A professional degree is not marital property (reversed in part) but there needs to be more evidence to show what contributions the supporting spouse provided (remanded).
The husband was working full time to support his wife who was going through nursing school. He claims that he spent 35,000 in support. Soon after obtaining her degree, she left him and the divorce proceedings began. The chancellor determined that a professional degree was marital property and the supporting spouse was entitled to reimbursement.
A professional degree is not marital property because it does not meet the rights of property. It cannot be transferred, or destroyed. The only use was for intellectual advancement and otherwise provides no economic value.
However, the courts are interested in protecting the supporting spouse who helped student spouse obtain the degree by financial support. This extends to more than tuition and books but also covers housing and grocery expenses. Although there must be sufficient evidence, the supporting spouse can be reimbursed for the costs spent to support.
However, the dissent argues that this should not be a new category. Yes, the support can be weighed into the equitable distribution but the awarding of a lump sum for a different category opens up the expansion of other categories.
The majority rule is that a professional degree is not marital property.
Should there should be a claim for palimony (compensation for living together)? Best approach is to have cohabitating couples enter a contract to protect financial interests.
The content contained in this article may contain inaccuracies and is not intended to reflect the opinions, views, beliefs, or practices of any academic professor or publication. Instead, this content is a reflection on the author’s understanding of the law and legal practices.