Concurrent Estates – Concurrent Ownership – Co-ownership

Concurrent Estates – Concurrent Ownership – Co-ownership


Concurrent Estates. A concurrent estate is when two or more people
own the same piece of property. These people are called cotenants (or co-owners). Before we begin, it is important to keep in
mind one characteristic that exists for all the concurrent estates: All cotenants have
the right to use the whole property. This is simple enough, however sometimes the
“right to use the whole” is confusing for students because it is often referred
to in different ways: The right to possess the whole,
The right to enjoy the whole, and It is also called an undivided share. These are all the same. In this lecture, the form that will be used
is the “right to use the whole.” There are three kinds of concurrent estates
and the basics of each are as follows: The tenancy in common is the simplest concurrent
estate. Thus it is no surprise that it is also the
default concurrent estate. Cotenants can have different percentages of
ownership. And when a cotenant dies, his share of the
land passes to his heirs. The joint tenancy is different,
Cotenants can only have equal shares in ownership. And when a cotenant dies his share passes
to the other cotenants instead of his heirs. This distinguishing factor is the most defining
characteristic of the joint tenancy. It is referred to as the Right of Survivorship. The tenancy by the entirety is almost the
same as the joint tenancy. Its defining characteristic is that it involves
marriage. Now we will proceed with more detail on each
concurrent estate. Tenancy in common
As we already mentioned, the tenancy in common is the default concurrent estate. When the type of concurrent estate is not
stated, the courts favor the tenancy in common. The tenancy in common is also the easiest
concurrent estate to learn because the characteristics to remember are open-ended. The tenancy in common:
Allows for any proportion of shares; equal or unequal. And, these shares can be transferred to anyone
for any reason. When a cotenant dies, the property goes to
that particular cotenant’s heirs. And, like all concurrent estates, each owner
has the right to use the whole property. If a cotenant wants to end a tenancy in common,
he has the right to petition the court to divide the property amongst the cotenants. This is called partition. There are two ways that a court will partition
the property. A partition in kind means that the Court will
make a physical division in the property. If a physical division is not in the best
interest of the cotenants, than a partition by sale will occur. A partition by sale means that the court will
force a sale of the property and divide the proceeds amongst the cotenants. Joint Tenancy. Like all concurrent estates, cotenants of
a joint tenancy have the right to use the whole property. The most distinguishing characteristic of
the joint tenancy is the Right of Survivorship. The right of survivorship means that when
one cotenant dies, the other cotenants take over his share of the property. Note: The deceased cotenant’s heirs do not
get any of the property. For Example: A and B own a ranch together
as joint tenants. B writes a will which states, “I assign
my share of the ranch to C when I die.” When B dies, B’s share of the ranch does
not go to C because A has the right of survivorship which is superior. The right of survivorship must be clearly
indicated. The simplest way to do this would be for the
grantor to include the words “right of survivorship” in the conveyance. However, if not such words exist, it is enough
to show that the grantor’s intent was to have a “right of survivorship”. In addition to the right of survivorship,
the joint tenancy has 4 requirements. They are called the 4 Unities: Time, Title,
Interest, and Possession. The Unity of Possession requires that each
cotenant have the right to use the whole. It is the first and easiest Unity that we
cover because it is review. We already know that all cotenants from any
concurrent estate have the right to use the whole. The slight difference here is that other concurrent
estates can alter this right. But a joint tenancy cannot because it is a
required by the Unity of Possession. For Example: O conveys, “to A and B as joint
tenants with right of survivorship, but B can’t use the lake because he will eat all
the fish. This joint tenancy fails because B does not
have the right to possess the whole. Instead, A and B have a tenancy in common. In another Example: O conveys, “to A and
B as joint tenants with right of survivorship, but A can’t use the land in the fall because
he will shoot all the deer. This joint tenancy fails because A does not
have the right to possess the whole. Instead, A and B have a tenancy in common.
The Unity of Time requires that the cotenants acquire the property at the same time. The Unity of Title requires that the cotenants
have the same title to the property. At common law, this created a problem when
someone who owned a property wanted to create a joint tenancy with himself and another person. To remedy this problem, the owner would have
to set up what is called a straw man. The straw man approach is best understood
through an example: A has a property in FSA but now he decides
to create a joint tenancy with B. To do this A must first convey his property to a disinterested
3rd party, i.e. the straw man. Then the straw man conveys the property to
both A and B as joint tenants with right of survivorship. The Unity of Interest requires that each cotenant
must have the same interest in the property. This means that the percentage of ownership
is identical and that the type of ownership is identical. For example: O conveys, “to A and B, 70%
and 30%, respectively, as joint tenants with right of survivorship.” Here the joint tenancy fails because the percentage
of ownership is not equal. What if O conveys, “to A and his heirs but
also to B for life, as joint tenants with right of survivorship.” Here the joint tenancy fails because the types
of ownership are different. B’s Life Estate is different than A’s
Fee Simple Absolute. A joint tenancy will end when there is Severance. Severance occurs when any of the 4 unities
are interrupted. However, the usual causes for severance are:
Partition, Transfer, and sometimes Mortgage in some states. Similar to how a tenancy in common can end
by partition; a joint tenancy can be severed by partition. See the above section on partition for the
tenancy in common. Any transfer during the cotenant’s lifetime
will cause a joint tenancy to be severed. It is important to note that severance will
be found to have occurred even with the simplest act of entering into a contract to sell, where
the deal has time before it closes and thus the actual transfer of property has not occurred. This is based on the doctrine of Equitable
Conversion. The doctrine of Equitable Conversion provides
a saying: “Equity sees that as done what ought to be done.” In simple words, this means that: out of fairness,
something that will truly be completed in the future is treated as having already been
completed. This doctrine is best understood with an example:
A and B own an apartment building as joint tenants with right of survivorship. B enters into a contract to sell his ownership
of the building to C on June 1st. On August 1st the transaction closes. According to the doctrine of Equitable Conversion,
the joint tenancy is severed on June 1st and not August 1st. In a minority of states which apply Title
Theory, a mortgage will sever a joint tenancy. Title Theory is where if one joint cotenant
takes out a mortgage or lien on his share of the property, then the joint tenancy is
severed to that share. However, the majority of states apply Lien
Theory where if one joint cotenant takes out a mortgage on his share the joint tenancy
will stay intact. Note: When a joint tenancy is severed, the
remaining estate is a tenancy in common. However, if there are three or more cotenants,
then the joint tenancy remains intact among the non-severing cotenants. For example: If a joint tenancy has 3 cotenants,
and one cotenant conveys his share to another person, then that person owns a 1/3 share
on a tenancy in common basis. The other two original cotenants continue
to hold the remaining 2/3s on a joint tenancy basis. Tenancy by the entirety. The defining characteristic of the tenancy
by the entirety is that the owners are married. It is similar to the JT in that it has a right
of survivorship and that the 4 unities are required. But in addition, the unity of marriage is
also required. In the minority of states that practice the
tenancy by the entirety, property which is conveyed to a married couple is presumed to
be a tenancy by the entirety. However, this presumption can be rebutted
if it can be shown that the grantor had a different intent. The tenancy by the entirety is a highly secure
form of coownership. Each spouse cannot transfer his share of the
property without the other spouse’s consent. This also means that the property is protected
from the debt of the other spouse. For Example: A and B own a house as tenants
by the entirety. A loses his job and can’t payback his debts. The creditors will not be able to collect
their debt by taking the house because such a transfer would require consent by both spouses. A tenancy by the entirety only ends when the
marriage ends. Thus, a tenancy by the entirety will end by
death and the tenancy by the entirety will end by divorce. Now let’s review some of the main elements
of each concurrent estate. There are three concurrent estates. The Tenancy in Common is the default concurrent
estate. The Tenancy in Common is also the concurrent
estate for which there can be a varying percentage of ownership. All the concurrent estates hold the Right
to Use the Whole. The Tenancy in Common and the Joint Tenancy
hold the Right to Partition. The Joint Tenancy and the Tenancy by the Entirety
hold the Right of Survivorship. The Joint Tenancy and the Tenancy by the Entirety
also require the 4 Unities with the Tenancy by the Entirety also requiring Marriage. Rights and Duties of Cotenants. The first two rights to be covered here are
review from above. Partition. Cotenants of a tenancy in common or a joint
tenancy have the right to petition the court to divide the property amongst the cotenants. However, it is important to remember that
a Tenancy by the Entirety does not have this right because it only ends when the marriage
ends. Possession. As we mention now for the fifth time, all
cotenants have the right to use the whole property. If one cotenant A prevents cotenant B from
any part of possession, then A has ousted B. And, B can bring a cause of action for
Ouster. Adverse Possession. If one cotenant leaves the property for an
extended period of time, the cotenant that stays in possession cannot gain the entire
title to the property by adverse possession. This is because the hostility element of adverse
possession is missing. However, if the cotenant with possession has
ousted the cotenant that has left, then the hostility element is satisfied. Profits. If the property makes money, each cotenant
is entitled to a share equivalent to their share of the property. For Example: A and B own some land as tenants
in common. A owns 80% and B owns 20%. A leases the land to a farmer for $1000 per
month. B is entitled to his fair share of $200 per
month. If one cotenant is left in exclusive possession
of the property, he is not liable to the other cotenants for rent. However, if the other cotenants were ousted
by the tenant with exclusive possession, then that cotenant is liable for rent. For example: A and B share a condo as tenants
in common. A owns 80% and B owns 20%. B leaves A with exclusive possession and travels
the world for 4 months. Upon B’s return he demands that A pay him
rent for the time that he was in exclusive possession. B cannot collect any money from A unless he
can prove that he was ousted. Costs. If the property costs money, i.e. taxes or
mortgage payments, each cotenant is responsible to pay an amount equivalent to their share
of the property Repairs and Improvements. In general, there is no right to contribution
for repairs or improvements. However, there are two exceptions. If a cotenant gives notice to the other cotenants
of a reasonably necessary repair, then there is a right to contribution of an amount proportional
to ownership of the property. For example: A and B own a house as tenants
in common. One of the windows has recently broken and
B decides that it is reasonably necessary to repair the window. B pays for the window to be repaired and is
now asking A to pay his fair share for the repair. A does not have to pay B for the repair because
there is no right to contribution for repairs. Instead imagine that in addition to the above
facts, that B had told A that the window was broken and she was going to pay for it to
be repaired. Now B has a right to contribution. A must pay B for the repair because B gave
A notice and the repair was necessary and reasonable. When cotenants decide to sell their property,
and it sells at a premium due to a modification made by one of the cotenants, then that cotenant
is entitled to that premium in full. Note, that the opposite is also true. If the property is sold at a discount, the
responsible cotenant bears the burden in full. Waste. Cotenants must not commit waste. Remember the three kinds of waste: Voluntary,
Permissive and Ameliorative. For review, see the Present Estates video
lecture at 10:15 minutes.

13 thoughts on “Concurrent Estates – Concurrent Ownership – Co-ownership

  1. please post more!!!!

  2. I usually have questions when I am confused about a problem in my book. This time I have a different but albeit related question. At 9:12 you said that a bank could not take the house if one of the spouse is in debt but the other spouse did not consent to it. But how come we see on the news constantly (especially in today's economy) about foreclosures and people losing their houses. Can you "not" lose your house simply by having a tenancy by entirety and this tenancy is something that people do not know about? Or is there more law beyond this that is not covered here.

  3. Thank you for all your videos and explanations. They are great help and very clear!

  4. Wow! You make property law so easy! I really needed this to get all the concepts down for the upcoming bar exam!! Thank you!!

  5. These videos are great!! Thank you so much for posting them! 🙂

  6. Great video. This makes it so much easier to understand. Thank you!

  7. I have a question here , the lake example in the video says that if the cotenant cannot use the lake it will not create a joint tenant but a tenancy in common, however, a tenancy in common also requires the right to use the whole. So how come?

  8. Thanks for all your great videos !!

  9. Great. Thank you

  10. This is genius. You just summed up about 2 hours of bar lectures in about 15 minutes. Bravo!

  11. these videos are fantastic. life savers!!

  12. I have been struggling with this concept in Real Estate class… This really helped..

  13. honestly, Property is by far my worst subject as I am using Barbri and their CEO is fucking garbage at lecturing. These videos are life savers.

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