Concurrent estate

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Property law

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v
t
 e

A concurrent estate or co-tenancy is a concept in property law which describes the various
ways in which property is owned by more than one person at a time. If more than one person
owns the same property, they are referred to as co-owners. If more than one person leases the
same property, they are called co-tenants or joint tenants. Most common law jurisdictions
recognize tenancies in common and joint tenancies, and some also recognize tenancies by the
entirety. Many jurisdictions refer to a joint tenancy as a joint tenancy with right of survivorship,
and a few U.S. states treat the phrase joint tenancy as synonymous with a tenancy in common.

The type of ownership determines the rights of the parties to sell their interest in the property to
others, to will the property to their devisees, or to sever their joint ownership of the property. Just
as each of these affords a different set of rights and responsibilities to the co-owners of property,
each requires a different set of conditions to exist.

Law can vary from place to place, and the following general discussion will not be applicable in
its entirety to all jurisdictions.

Contents
[hide]

1 Rights and duties of co-owners (general)

o 1.1 Contribution and improvements
o 1.2 Mortgages
2 Tenancy in common
o 2.1 Destruction of tenancy in common
3 Joint tenancy
o 3.1 Four unities of a joint tenancy
o 3.2 Breaking a joint tenancy
o 3.3 Mortgages to break joint tenancy
o 3.4 Petition to partition to sever a joint tenancy
4 Tenancy by the entirety
5 References
6 External links
7 See also

Rights and duties of co-owners (general)[edit]

Under the common law, Co-owners share a number of rights by default:

1. Each owner has an unrestricted right of access to the property. When one co-owner
wrongfully excludes another from using the shared property, the excluded co-owner can
 bring a cause of action for ouster. As a remedy, the court may grant the wronged co-
owner the fair rental value of the property for the time that they were ousted.
2. Each owner has a right to an accounting of profits made from the property. If the
property generates any income (e.g. rent, farming, etc. . . .) each owner is entitled to a
pro-rata share of that income.
3. Each owner has a right of contribution for the costs of owning the property. Co-owners
can be forced to contribute to the payment of expenses such as property taxes, necessary
maintenance and repairs or mortgages for the entire property.

Contribution and improvements[edit]

Co-owners generally do not have any obligation to contribute to any costs of improving the
property. If one co-owner adds a feature that enhances the value of the property, that co-owner
has no right to demand that any others share the cost of adding that feature even if other co-
owners reap greater profits from the property because of it. However, at partition, a co-owner is
entitled to recover the value added by his or her improvements of the property if the
"improvements" resulted in an increase in property value. Conversely, if the co-owner's
"improvements" decrease the value of the property, the co-owner is responsible for the decrease.
In an Australian case,[1] the High Court said that the costs of repairing by one co-owner must be
taken into account on the partition or final distribution (i.e. sale) of the property.

Mortgages[edit]

Furthermore, each co-owner can independently encumber the co-owner's own share in the
property by taking out a mortgage on that share (although this may effectively convert a joint
tenancy to a tenancy in common, as described below); other co-owners have no obligation to
help pay a mortgage that only runs to another owner's share of the property, and the mortgagee
can only foreclose on that mortgagor's share. Bank loans secured by mortgages on individual
shares of co-owned property are one of the most rapidly expanding areas in the mortgage lending
industry.

Finally, co-owners owe one another a duty of fair dealing. Because of this, any co-owner who
acquires a mortgage claim against the property must give his co-owners a reasonable opportunity
to purchase proportionate shares in that claim.

Tenancy in common[edit]
Tenancy in common is a form of concurrent estate in which each owner, referred to as a tenant in
common, is regarded by the law as owning separate and distinct shares of the same property. By
default, all co-owners own equal shares, but their interests may differ in size.

TIC owners own percentages in an undivided property rather than particular units or apartments,
and their deeds show only their ownership percentages. The right of a particular TIC owner to
use a particular dwelling comes from a written contract signed by all co-owners (often called a
Tenancy In Common Agreement), not from a deed, map or other document recorded in county
records.[2] This form of ownership is most common where the co-owners are not married or have
contributed different amounts to the purchase of the property. The assets of a joint commercial
partnership might be held as a tenancy in common.

Tenants in common have no right of survivorship, meaning that if one tenant in common dies,
that tenant's interest in the property will be part of his or her estate and pass by inheritance to that
owner's devisees or heirs, either by will, or by intestate succession. Also, as each tenant in
common has an interest in the property, they may, in the absence of any restriction agreed to
between all the tenants in common, sell or otherwise deal with the interest in the property (e.g.
mortgage it) during their lifetime, like any other property interest.

Destruction of tenancy in common[edit]

Where any party to a tenancy in common wishes to terminate (usually termed "destroy") the joint
interest, he or she may obtain a partition of the property. This is a division of the land into
distinctly owned lots, if such division is legally permitted under zoning and other local land use
restrictions. Where such division is not permitted, a forced sale of the property is the only
alternative, followed by a division of the proceeds. (This paragraph is not the case in the law of
England and Wales)

If the parties are unable to agree to a partition, any or all of them may seek the ruling of a court
to determine how the land should be divided physically division between the joint owners
(partition in kind), leaving each with ownership of a portion of the property representing their
share. Courts may also order a partition by sale in which the property is sold and the proceeds are
distributed to the owners. Where local law does not permit physical division, the court must
order a partition by sale.

Each co-owner is entitled to partition as a matter of right, meaning that the court will order a
partition at the request of any of the co-owners. The only exception to this general rule is where
the co-owners have agreed, either expressly or impliedly, to waive the right of partition. The
right may be waived either permanently, for a specific period of time, or under certain
conditions. The court, however, will likely not enforce this waiver because it is a restraint on the
alienability of property.[3]

Joint tenancy[edit]
A joint tenancy or joint tenancy with right of survivorship (JTROS, JTWROS or JT TEN
WROS) is a type of concurrent estate in which co-owners have a right of survivorship, meaning
that if one owner dies, that owner's interest in the property will pass to the surviving owner or
owners by operation of law, and avoiding probate. The deceased owner's interest in the property
simply evaporates and cannot be inherited by his or her heirs. Under this type of ownership, the
last owner living owns all the property, and on his or her death the property will form part of
their estate. Unlike a tenancy in common, where co-owners may have unequal interests in a
property, joint co-owners have an equal share in the property.[4]

It is important to note, however, that creditors' claims against the deceased owner's estate may,
under certain circumstances, be satisfied by the portion of ownership previously owned by the
deceased, but now owned by the survivor or survivors. In other words, the deceased's liabilities
can sometimes remain attached to the property.

This form of ownership is common between wife and husband, and parent and child, and in any
other situation where parties want ownership to pass immediately and automatically to the
survivor. For bank and brokerage accounts held in this fashion, the acronym JTWROS is
commonly appended to the account name as evidence of the owners' intent.

To create a joint tenancy, clear language indicating that intent must be used e.g. "to AB and
CD as joint tenants with right of survivorship, and not as tenants in common". This long form of
wording may be especially appropriate in those jurisdictions which use the phrase "joint
tenancy" as synonymous with a tenancy in common. Shorter forms such as "to AB and CD as
joint tenants" or "to AB and CD jointly" can be used in most jurisdictions. Words to that effect
may be used by the parties in the deed of conveyance or other instrument of transfer of title, or
by a testator in a will, or in an inter vivos trust deed.

If a testator leaves property in a will to several beneficiaries "jointly" and one or more of those
named beneficiaries dies before the will takes effect, then the survivors of those named
beneficiaries will inherit the whole property on a joint tenancy basis. But if these named
beneficiaries had been bequeathed the property on a tenancy in common basis, but died before
the will took effect, then those beneficiaries' heirs would in turn inherit their share immediately
(the named beneficiary being deceased).

Four unities of a joint tenancy[edit]

Main article: Four unities

To create a joint tenancy, the co-owners must share "four unities":

Time the co-owners must acquire the property at the same time.
Title the co-owners must have the same title to the property. If a condition applies to
one owner and not another, there is no unity of title.
Interest each co-owner owns an equal share of the property; for example, if three co-
owners are on the deed, then each co-owner owns a one-third interest in the property
regardless of the amount each co-owner contributed to the purchase price
Possession the co-owners must have an equal right to possess the whole property.

If any of these elements is missing, the joint tenancy is ineffective, and the joint tenancy will be
treated as a tenancy in common in equal shares.

Breaking a joint tenancy[edit]

If any joint co-owner deals in any way with a property inconsistent with a joint tenancy, that co-
owner will be treated as having terminated (sometimes called "breaking") the joint tenancy. The
remaining co-owners maintain joint ownership of the remaining interest. The dealing may be a
conveyance or sale of the co-owner's share in the property. The position in relation to a mortgage
is more doubtful (see below). For example, if one of three joint co-owners conveys his or her
share in the property to a third party, the third party owns a 1/3 share on a tenancy in common
basis, while the other two original joint co-owners continue to hold the remaining 2/3s on a joint
tenancy basis. This result arises because the "unity of time" is broken: that is, because on the
transfer the timing of the new interest is different from the original one. If it is desired to
continue to maintain a joint tenancy, then the three original joint co-owners would need to
transfer, in the one instrument, the joint interest to the two remaining joint co-owners and the
new joint co-owner.

A joint co-owner may break a joint tenancy and maintain an interest in the property. Most
jurisdictions permit a joint owner to break a joint tenancy by the execution of a document to that
effect. In those jurisdictions which retain the old common law requirements, an actual exchange
with a straw man is required. This requires another person to "buy" the property from the joint
co-owner for some nominal consideration, followed immediately by a sale-back to the co-owner
at the same price. In either case, the joint tenancy will revert to a tenancy in common as to that
owner's interest in the property.

A significant issue can arise with the simple document execution method. In the straw man
approach, there are witnesses to the transfer. With the document, there may not be witnesses.
With either method, as soon as the break occurs, it works both ways. Because there may not be
witnesses, the party with the document could take advantage of that fact and hide the document
when the other party dies.

Mortgages to break joint tenancy[edit]

If one joint co-owner takes out a mortgage on jointly owned property, in some jurisdictions this
may terminate the joint tenancy. Jurisdictions which use a title theory in this situation treat a
mortgage as an actual conveyance of title until the mortgage is repaid, if not permanently. In
such jurisdictions, the taking of a mortgage by one owner terminates the joint tenancy as to that
co-owner. There are exceptions, and the law in the State of Georgia is a notable exception.

In Georgia, joint tenancy is commonly conveyed in a deed as "Joint Tenants with Rights of
Survivorship". The legal effect of this type of tenancy is a "life estate" with a "contingent
remainder". Translated, this means that the interest of each joint tenant can be thought of in two
parts: the "present" interest while the parties are both alive and what happens in the "future"
when one of the tenants dies. Viewed separately, the interest of each independent co-tenant is
only "temporary" interest while they both co-tenants are alive and neither owns a "full" interest.
The "full" interest is determined by who outlives the other and vests automatically in the
survivor at, and only at, the time of death. In the case of a mortgage executed by only one of the
living joint tenants, the mortgage does not sever the tenancy. Instead, the mortgage is interpreted
as conveying whatever interest the debtor holds. In this example, that would be the debtor's life
(or "temporary") estate only, since both parties are still living, but the lender would also be
entitled to the full estate, but only if the debtor were to outlive the other joint-tenant.
Consequently, if the debtor dies first, the co-tenant, who is not party to the mortgage, would take
full ownership interest of the property free and clear of the mortgage. However, just because a
surviving co-tenant isn't liable on the mortgage does not mean that the mortgage is extinguished
or that the property is not subject to foreclosure if the mortgage isn't paid. The Georgia Supreme
Court decision of Manders v. King, 284 Ga. 338, 339, 667 S.E.2d 59, 60 (2008) is instructive.
"Georgia is one of several states adhering to the common-law doctrine of exoneration, which
provides that, unless a will specifically provides otherwise, an heir or devisee of real property
may look to the decedent's personal property for satisfaction of liens on devised real property, at
the expense of the residuary legatees or distributees of the decedent's personal estate. J. Kraut,
Annotation, Right of Heir or Devisee to Have Realty Exonerated from Lien Thereon at Expense
of Personal Estate, 4 A.L.R.3d 1023, 3. See Raines v. Shipley, 197 Ga. 448, 458, 29 S.E.2d
588 (1944) ([U]nder the general law it was the duty of the executors to discharge this particular
mortgage debt [on devised real property] from the personal property of the testatrix, if any she
had....). See also Killingsworth v. First Nat. Bank of Columbus, 237 Ga. 544, 546, 228 S.E.2d
901 (1976) (estate required to exonerate devised real property by paying balance of mortgage
liens so long as the liens were debts of the testator and not an assumption of debts of a
predecessor in title). Id. In Manders, the Court held a surviving joint tenant does not qualify for
exoneration of a mortgage on joint tenancy property unless there is language in the decedent's
will clearly expressing an intention that the mortgage debt be paid. In re Estate of Young, supra;
In re Estate of Dolley, supra, 265 Cal.App.2d at 72.2. In short, if there is a mortgage on a
property that was executed by only one joint-tenant and that joint-tenant dies, unless there is a
specific provision in the Will of the deceased joint-tenant that estate assets should be used to pay
the outstanding mortgage, then surviving joint-tenant is not exonerated from the mortgage and
the property is subject to foreclosure if the mortgage goes into default.

In sum, under Georgia law, execution of a mortgage (called a "Deed to Secure Debt" or "Security
Deed") by one co-tenant does not sever the joint tenancy.

However, in jurisdictions which use the lien theory, the mortgage merely places a lien on the
property, leaving the joint tenancy undisturbed. As a lien is not enough to terminate a joint
tenancy, if the debtor dies before the creditor sues, the creditor is left with no claim against the
property, as the debtor's interest in the property evaporates and automatically vests in the other
surviving co-owners.

Petition to partition to sever a joint tenancy[edit]

A co-owner of a joint tenancy with rights of survivorship deed may sever the joint tenancy by
filing a petition to partition. A petition to partition is a legal right, so usually there is no way to
stop such an action. When a court grants a partition action for a joint tenants with rights of
survivorship deed, the property is either physically broken into parts and each owner is given a
part of equal value OR the property is sold and the proceeds are distributed equally between the
co-owners regardless of contribution to purchase price. No credits would be issued to any tenant
who may have made a superior contribution toward purchase price.

Some states allow a co-owner the option of buying out the other co-owners to avoid a public sale
of the property. Some states also allow multiple co-owners to join their shares together to claim a
majority ownership to avoid public sale of the property and to have the property awarded to the
majority owners. If the property is sold publicly, the usual method is a public auction.
During a partition process, credits may be granted to co-tenants who have paid property expenses
in excess of their share, such as utilities and property maintenance. Credit may be given for
improvements done to the property if the improvements have increased the value of the property.
No credit would be given for excess contribution to purchase price, as joint tenancy with rights
of survivorship deeds are taken in equal shares as a matter of law.

Pennsylvania partition case example: In DArcy v. Buckley, 71 Bucks Co. L. Rep. 167 (August
21, 1998), two persons purchased property as joint tenants with right of survivorship. The
Plaintiff contributed five times more than the Defendant toward the purchase price. In a partition
action, the Plaintiff sought credit for the full amount of his superior contributions. The Court
held that, in the absence of fraud, the working of the deed operated to convey a one-half interest
to each of the two joint tenants. The decision relies the authorities of Masgai v. Masgai, 460 Pa.
453, 333 A.2d 861 (1975) and DeLoatch v. Murphy, 369 Pa. Super. 255, 535 A.2d 146 (1987).
The Plaintiff argued, to no avail, that he did not intend to make a lifetime gift to defendant.

Tenancy by the entirety[edit]

A tenancy by the entirety (sometimes called a tenancy by the entireties) is a type of concurrent
estate formerly available only to married couples, where ownership of property is treated as
though the couple were a single legal person. (In the State of Hawaii, the option of Tenants by
the Entirety ownership is also available to domestic partners in a registered "Reciprocal
Beneficiary Relationship"; Vermont's Civil Union statute qualifies parties to a civil union for
tenancy by the entirety.) Like a Joint Tenancy with Rights of Survivorship, the tenancy by the
entirety also encompasses a right of survivorship, so if one spouse dies, the entire interest in the
property is said to "ripen" in the survivor so that sole control of the property ripens, or passes in
the ordinary sense, to the surviving spouse without going through probate.

In some jurisdictions, to create a tenancy by the entirety the parties must specify in the deed that
the property is being conveyed to the couple "as tenants by the entirety," while in others, a
conveyance to a married couple is presumed to create a tenancy by the entirety unless the deed
specifies otherwise.[5] (see also Sociedad de gananciales)[6] Also, besides sharing the four unities
necessary to create a joint tenancy with right of survivorship time, title, interest, and
possession there must also be the fifth unity of marriage. However, unlike a JTWROS, neither
party in a tenancy by the entirety has a unilateral right to sever the tenancy. The termination of
the tenancy or any dealing with any part of the property requires the consent of both spouses. A
divorce breaks the unity of marriage, leaving the default tenancy, which may be a tenancy in
common in equal shares. Many US jurisdictions no longer recognize tenancies by the entirety.[7]
Where it is recognized, benefits can include the ability to shield the property from creditors of
only one spouse, as well as the ability to partially shield the property where only one spouse is
filing a petition for bankruptcy relief. If a non-debtor spouse in a tenancy by the entirety survives
a debtor spouse, the lien can never be enforced against the property. On the other hand, if a
debtor spouse survives a non-debtor spouse, the lien may be enforced against the whole property,
not merely the debtor spouse's original half-interest.

In many states, tenancy by the entireties is recognized as a valid form of ownership for bank
accounts and financial assets. One must be careful to ensure that the tenancy by the entireties
designation is chosen as opposed to other forms of joint ownership such as joint tenancy with
rights of survivorship, so that the benefits of tenancy by the entireties status is not lost. For
example, under Florida law, if a bank account titling document allows for tenancy by the
entireties and joint tenancy with rights of survivorship, if the account is opened as a joint tenancy
with rights of survivorship account, the benefits of tenancy by entireties will not attach.