What language does it take to create each of these interest. Know the rules for real property and bank accounts. Once the interest is created what can one owner do with the property. Can one cotenant convey his interest without the consent of the other cotenant? Can one cotenant lease or rent the property to a third party without the consent of the other party. If one cotenant lives on the property does he owe rent to the other cotenant? Look to majority and minority rule. Who pays mortgage and taxes. Who pays to fix the roof. If one cotenat pays more than his share can he get reimbursement or does that it take something else. You sue your cotenant in a contribution action or a accounting action or in a partition action. These are different suites with different remedies. We did a little on the marital interest. A husband and wife in a common law state or separate property states. 40 states are called this. In these states during the marriage what the husband earns is his and what the wife earns is hers. In 10 states there is community property. This si AC. In these states earning durining a marriage are owned 50/50 from the moment they are acquired. We give registered domestic partners in CA get same rights as married people fro property.
Life Estate: Life tenant gets to use the property for life, thus deriving economic value of possession. Life tenant cannot waste property or they cannot do things to permanently impair the property other than normal living conditions that render normal ware and tear. o There are three types of waste: (1)Affirmative waste. This is when the tenant does something to hurt the property. (2)Permissive waste is when they do nothing or do not take care of it. (3)Ameliorative waste is when the tenant does something to change the property that increases its value. You create a life estate my saying ― to X for life and H there after.‖ Defeasible Fees Defeasibel fees are subject to termination upon a certain event happening. There is a difference between a fee simple absolute and an FSD. No future event can terminate a FSA where it can in a FSD. 3 types o Fee Simple Determinable This terminates automatically upon a certain event where as FSCS does not. This is held until a future event happens. i.e. Black Acre to X so long as it is used for a library. Key words: so long as, until, during, while o If not used for a library it reverts back to the owner. The retained interest in the original owner is called a possibility of reverter. FSD is transferable but it still keeps the same limitations. o Fee Simple Subject to Condition Subsequent
FSCS can terminate after an event but does not have to. The grantor may pull the string back but he does not have to. i.e. Black Acre to X, but if ever used for N then grantor can take it back. Words: provided that, however, but if, on condition that The grantor retains a right of entry. To take back the property he must do more than just say that he wants it back. FSCS is transferable but there is still the same limitation. If there is ambiguity whether it is a FSD or FSCS then go with FSCS. o Fee simple subject to an executory limitation This is a fee simple that is divested or shifted. Blackarce to X for a school, if not used for a school to Y. (Y would have an executory interest.) Types of restraints that are invalid Forfeiture: To X but if she ever tries to transfer to Y. Disabling: To X, but nor further transfer by X of any interest in the property shall be valid. Promissory: To X and X promises that she will never transfer the property. No matter what type of restraint is used, a total restraint on alienation is never valid. Future Interest FI retained by the Grantor The reversion is the future interest that is created when the grantor conveys a lesser estate that he originally owned. A reversion is freely alienable during life and may be devised or inherited. o Reversion: X ownes Blackacre. He gives Y a LE. X still has the reversion. After Y dies it goes or reverts back to estate of X. Also: X has a FSA. Gives Y a LE. Y leases to Z. Y has a reversion. Contingent remainder: X has an FSA. X gives LE to Y and then to Z. X has a reversion unless Z survives Y. Z has a contingent remainder. FI created in Grantees Remainder: this is a future interest created in a grantee upon the happening of some event. o i.e. X to Z for life, then to Y. Y has a remainder. o Remainders are vested or contingent Vested: a remainder created that is not subject to any condition Vested remainder subject to complete divestment: X to Y for life and then to Z, but if W returns then to W. Z has a VRSCD. W has an executory interest. Vested remainder subject to open or partial divestment: this is created in a class of people o X to Y for life and then to my kids who graduate from law school. Contingent: it has a condition life surviving someone.
Tenancy in Common How Created? Restrictions in creating To A and B Unity of possession They can give it up with initially it is a present possesory interest.
Convey Inter Vivos? (can 1 co tenant convey intervivos) Devise/decend at co-owner’s death? Probate? Can 1 co-tenant’s creditor reach the property?
Yes, one can convey
Yes,
Yes Yes, alive or dead
Joint Tenancy with Right of Survivorship To A and B JT with Right of Survivorship (ros) Time: created at the same time. (has to be in the same deed. Taking: Interest: we have to have equal percentages Poss. Yes one can convey. If one convey it destroys the right of survivorship here. No, because if A and B are JT A’s interest disappears when A dies. No Alive: yes while A is alive. If A can transfer it away the creditor can reach it. Dead:
Tenancy by the Entirety To H + W as T by E You have to be married. You need 4 unities and have to be married.
No
No
No 1 co-tenant cannot convey the property so a creditor cannot reach it. That is the advantage of this.
Concurrent Interests Tenancy in Common TOC own separate but undivided interest in the same property. Each tenant owns the entire property. A TOC may be alienated, devised, inherited separate from the other tenants interest. o There are no survivorship rights. o i.e. X conveys blackacre to Y and W. W conveys his interest to T. T and Y are TOC. By statute conveyance of property to two people who are not married is assumed to be TOC. In a TOC each tenant can possess the entire property so long as the other tenant does not object. Joint Tenancy (JT)
Each tenant owns an undivided share in the property. The surviving tenant gets the other tenants half. o A JT is not subject to probate. o If creditors want a JT interest they must gain and sell the interest while the JT is alive. The debtors interest disappears at his death. o There has to be four unities for a JT to exist:
TIME—interest of each tenant must vest at the same time. TITLE—interest of each tenant must be acquired by same instrument or by joint adverse possession; never by intestate succession or law. INTEREST—each tenant must have an equal undivided share and identical interest measured by duration. It cannot be 2/3 to X and 1/3 to W. must be 50/50 POSSESSION—each tenant must have right to possession of whole, but one can give right of exclusive possession to another tenant.
o Severance of a JT A JT may severe or destroy the JT at any time, usually by conveyance. Under common law and majority a tenant cannot sever a JT unilaterally and keep an interest in a TOC. You would need a straw Minority says that you do not need a straw and you can do it yourself. o Mortgages Jurisdictions are split as to where a JT may mortgage his interest. It mostly depends on where there is a title theory or lien theory. Title theory (Minority): Does sever JT, mortgagee is
conveyed title which exists between him and mortgagor, who has right to redeem title once lien is paid. It changes interest so it becomes a TOC. Lien Theory (Majority): on a joint tenant’s interest will not sever JT, unless lien goes unpaid and there is a conveyance of title at expiration of redemption period; mortgagor keeps title and mortgagee is given a lien or encumbrance on property.
o A problem arise when a JT dies who has a mortgage or lien against the property. It is typically held that the bank loses. The Other JT gets it all.
o Lease At common law if the JT leased his interest the JT was severed. Majority today do not hold this to be true. There is still survivorship rights. If the JT dies and he leased it to someone most jurisdictions say the lease becomes invalid. o Bank Accounts POD –payable on death it is mine now but yours when I die.
Present gift it is yours and mine right now Convenience account it is mine but you can have access to it with my consent. Tenancy by the Entirety This is a form of joint ownership available only to a husband and wife. There is a right of survivorship. o The four unities are required plus being married. o Neither tenant acting alone can sever the tenancy, unlike a JT. Neither can obtain partition or convey his interest Rights and Obligations of Concurrent Owners Partition o A JT or a TOC may demand a partition of the property at any time. A Tenant by entirety may not. o Partition is accomplished by either Physical division of the property Sale and division of the proceeds. Partition in Kind: this is physical division of the property. This is the preferred method. Courts will use this unless it is impossible or impractical or it is not in the best interest of all the parties. Partition by sale: this is the most common. Property is sold and split. o An agreement not to partition is enforceable if it is clearly manifested in a contract by the parties and the duration is for a limited or reasonable time. Rent Profits and Possession o Exclusive possession by 1 tenant is valid since each tenant owns it, however they have certain obligations to the other tenant. o Rental value (jurisdictions split) Majority: co-tenant has not duty to share rental value with the other co-tenant unless The other tenant has been ousted The cotenant in possession owes a fiduciary duty to the other tenants The cotenant has agreed to pay rent. o The corollary is that the tenant has to pay carrying costs. Ouster occurs if the tenant in exclusive possession either: o Actually prevents or bars physical entry by a cotenant or o Denies the cotenants claims to title. Minority: the minority is the cotenant is liable for the rent unless there is a prior agreement.
Rents from third parties: a cotenant who receives rent on the property must account for the other cotenant i.e. X and Y own Blackacre. W rent part for 5$ and Z rents part for 7$. W pays X and Z pays Y. Y must pay 1$ to X to account for the rent. Profits from Land: if minerals or other value from the land are removed by one cotenant it must account to the other cotenant. (Timber is different so long as they just take their share). o Accounting for the costs of ownership Each cotenant is responsible for his share of the proportion of the costs – mortgage payments, taxes, repairs, and maintenance. For repairs a cotenant does not have to make any repairs. He can let it ruin. However if he does the other cotenant is under no obligation to pay. However the other cotenant can recover those cost in two ways: o 1 – he may deduct from rent he may owe the other cotenant from an accounting or o 2 – upon partition, a repairing cotenant is entitled to be reimbursed for the repair costs in excess of his share. Improvements: no one is forced to pay for improvements. However a cotenant can recover value if improvements are made. o