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Concurrent estate
A concurrent estate or co-tenancy is a concept in property law,
particularly derived from the common law of real property, which
describes the various ways in which property can be owned by more
than one person at a given time. The parties who own property jointly
are referred to as co-tenants or joint tenants. Most common-law
jurisdictions recognize three kinds of concurrent estate: tenancy
in common, joint tenancy with right of survivorship, and tenancy
by the entirety. Many jurisdictions simply refer to a joint tenancy
with right of survivorship as a joint tenancy, but 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 convey
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 joint owners of property, each requires a different set of
conditions in order to exist.
* 1 Rights and duties shared by all co-tenants
* 2 Tenancy in common
o 2.1 Destruction of a tenancy in common
* 3 Joint tenancy with right of survivorship
o 3.1 The four unities
o 3.2 Breaking a JTWROS
o 3.3 Effect of a mortgage
* 4 Tenancy by the entirety
Rights and duties shared by all co-tenants
Co-tenants, irrespective of the type of tenancy, share certain rights
to the property:
1. Each tenant has an unrestricted right of access to the property.
Where one co-tenant wrongfully excludes another from making use
of the property, the excluded co-tenant can bring a cause of action
for ouster, and may receive the fair rental value of the property
for the time that he was dispossessed. 2. Each tenant has a right
to an accounting of profits made from the property. If the property
generates income such as rent, each tenant is entitled to a proportion
of that income. 3. Each tenant has a right of contribution for the
costs of owning the property. Co-tenants can be forced to contribute
to the payment of expenses such as repairs, property taxes, and
mortgages on the entire property.
Co-tenants do not have any obligation to contribute to any costs
of improving the property. If one co-tenant adds a feature that
enhances the value of the property, that co-tenant has no right
to demand that any others share the cost of adding that feature
- even if other co-tenants reap greater profits from the property
because of it.
Furthermore, each co-tenant can independently encumber their own
share in the property by taking out a mortgage on that share; other
co-tenants have no obligation to help pay a mortgage that only runs
to another tenant's share of the property, and the mortgagee can
only foreclose on that share.
Finally, co-tenants owe one another a duty of fair dealing. Because
of this, any co-tenant who acquires a mortgage claim against the
property must give his co-tenants a reasonable opportunity to purchase
proportionate shares in that claim.
Tenancy in common
Tenancy in common is the default form of concurrent estate, in which
each owner, referred to as a tenant in common, is regarded by the
law as each owning separate and distinct shares which may differ
in size. This form of ownership is common where the co-owners are
not married or have contributed different amounts to the acquisition
of the property. Also, if joint owners had attempted to use another
form of joint ownership such as a joint tenancy with right of survivorship
or a tenancy by the entirety, and the effort was for some reason
invalid, the joint owners would then be tenants in common. If conclusive
evidence is not available of the desire to create a tenancy with
rights of survivorship or a tenancy by the entirety, courts will
determine that a tenancy in common has in fact been created.
Tenants in common have no right of survivorship, meaning that if
one owner dies, that owner's interest in the property will pass
by inheritance to that owner's devisees or heirs, either by will,
or by intestate succession.
Destruction of a tenancy in common
Where the parties to a tenancy in common wish to destroy the joint
interest, they can do so through a partition of the property - a
division of the land into distinctly owned plots.
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 up, physically divide it 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. [edit]
Joint tenancy with right of survivorship
A joint tenancy with right of survivorship or JTWROS is a type of
concurrent estate in which the joint owners have a right of survivorship,
meaning that if one owner dies, that owner's interest in the property
will automatically pass to the remaining owner or owners. On the
death of one of the tenants, the whole of the property passes to
remaining tenant(s); this is the "right of survivorship."
The deceased tenant's property interest simply evaporates by operation
of law, and cannot be inherited by his heirs (which means it avoids
going through probate). Under this type of ownership, the last owner
living takes all.
It is important to note, however, that creditors' claims against
the deceased tenant'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 husband and wife, and parent
and child, and in any other situation where parties want absolute
ownership to immediately pass 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.
In order to create this type joint ownership, the party or parties
seeking to create it must use specific language indicating that
intent. For example, if Joey wishes to convey property for Kelly
and Lisa to share as joint tenants with right of survivorship, Joey
must state in the deed that the property is being conveyed "to
Kelly and Lisa as joint tenants with right of survivorship, and
not as tenants in common."
The four unities
In order for a JTWROS to be created, the co-owners must share the
"four unities":
* Time = the property interest must be acquired by both tenants
at the same time. * Title = both tenants must have the same title
to the property in the deed - if the deed places a condition on
one tenant and not the other, they do not have the same title, and
the attempt to create a JTWROS is invalid. * Interest = both tenants
must have the same interest in the property - e.g. three owners
each having a 1/3 interest. * Possession = both tenants must have
the right to possess the whole property - if one owner can prove
that he or she has been improperly excluded from the property by
the other, the JTWROS will be invalidated.
If any one of the four unities is missing, the JTWROS is invalid,
and becomes a tenancy in common.
Breaking a JTWROS
The co-tenant in property owned by a JTWROS can break the JTWROS
as to their interest in the property at any time by conveying their
interest in the property to another person. Under the old common
law, this required an actual exchange with a straw man - another
person who would buy the property from the co-tenant for some nominal
consideration, then sell it back to the co-tenant at the same low
price. Many states now permit a joint tenant to break the JTWROS
without a straw man, simply by executing a document to that effect
- even if that owner does not inform the other owners. In either
case, the JTWROS will, again, revert to a tenancy in common as to
that owner's interest in the property.
It is important to note, however, that if there are three or more
owners, and only one of the owners breaks the JTWROS, the other
owners remain in the JTWROS as to each other. For example, suppose
Joey, Kelly, and Lisa own a piece of property as joint tenants with
right of survivorship, but then Joey conveys his share in the property
to Ryan. If Ryan dies, his 1/3 share will go to his heirs. But if
Kelly dies, her 1/3 share will go to Lisa, because they still owned
their total 2/3 share in JTWROS.
Effect of a mortgage
Where one party takes out a mortgage on the jointly owned property,
this may break the JWTROS, depending on the law of the state. Some
states use a lien theory, which posits that the taking of a mortgage
merely places a lien on the property, leaving the joint tenancy
undisturbed. However, other states that use a title theory, contending
that a mortgage actually conveys title to the mortgagor until the
mortgage is paid. In such states, the taking of a mortgage by one
owner breaks the joint tenancy as to that owner.
A creditor's judgment lien is not enough, no severance, if debtor
dies before creditor sues, the creditor has no interest in the property
left to collect against.
Tenancy by the entirety
Tenancy by the entirety is a type of concurrent estate available
only to married couples, wherein ownership of the property is treated
as though the husband and wife are a single legal person. Like a
JTWROS, the tenancy by the entirety also encompasses a right of
survivorship, so if one spouse dies, the entire interest in the
property passes to the surviving spouse, without going through probate.
In order for a tenancy by the entirety to be created, the party
or parties seeking to create it must specify in the deed that the
property is being conveyed to the couple "as tenants by the
entirety". Also, the parties must share the four unities necessary
to create a joint tenancy with right of survivorship - time, title,
interest, and possession - plus a fifth unity, marriage. However,
unlike a JTWROS, neither party in a tenancy by the entirety has
a unilateral right to sever the tenancy by the entirety - if it
is to be undone, or if any part of the property is to be conveyed
to another person, this must be carried out by both husband and
wife. A divorce breaks the unity of marriage, leaving the default
tenancy – a tenancy in common.
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