3.3 Delaware Property Ownership and Rights

Forms of Co-Ownership

Delaware recognizes the standard concurrent estates, and the state exam tests the distinctions sharply.

The express-words rule

To create a joint tenancy with right of survivorship, the deed must expressly state that intent (e.g., 'as joint tenants with right of survivorship, and not as tenants in common'). If the granting language is silent, Delaware presumes tenancy in common between unmarried co-owners. This presumption is a favorite exam question.

Tenancy by the entirety

Reserved for married couples, tenancy by the entirety treats the spouses as a single legal unit:

• Automatic survivorship — the surviving spouse takes the whole, outside probate.
• Creditor shield — a creditor of only one spouse generally cannot force a sale or reach the property.
• Termination — only by death, divorce (which converts it to tenancy in common), or mutual written agreement.

Worked example: A married couple owns their home as tenants by the entirety. A creditor wins a judgment against the husband alone. Because the property is entireties property, that creditor cannot levy on the home; only a judgment against both spouses jointly could reach it.

The four unities of joint tenancy

A valid joint tenancy historically requires the four unities — remember them as T-TIP:

• Time: all owners take title at the same moment.
• Title: all take through the same deed or instrument.
• Interest: each owns an equal share.
• Possession: each has an undivided right to the whole.

If one joint tenant later sells their share, the new buyer takes as a tenant in common with the remaining joint tenants, because the unities of time and title are broken for that share. Tenancy by the entirety adds a fifth unity — marriage — on top of these four.

Lien Theory and Judicial Foreclosure

Delaware is a lien-theory state. When a borrower finances a home, the borrower keeps legal title and the lender holds only a lien created by the mortgage. Two documents work together:

Because Delaware uses a two-party mortgage (borrower + lender) rather than a three-party deed of trust (which adds a trustee), the lender cannot simply seize title on default.

Judicial foreclosure (required)

Delaware mandates judicial foreclosure through the Superior Court. Typical stages:

1. Default after missed payments and notice.
2. Lender files a foreclosure complaint (often a scire facias sur mortgage action) in Superior Court.
3. Borrower is served and gets a chance to respond/defend.
4. Judgment entered if undefended or after a hearing.
5. Sheriff's sale — public auction; the sheriff's deed transfers title to the high bidder.

This court supervision makes Delaware foreclosures slower than in non-judicial states but protects borrower due-process rights.

Deficiency judgments

If the sheriff's sale proceeds do not cover the debt, Delaware lets the lender pursue a deficiency judgment against the borrower for the shortfall, subject to fair-value considerations.

Realty Transfer Tax

Delaware imposes a realty transfer tax on most conveyances. The combined rate in most jurisdictions is about 4% — roughly 2.5% to the State plus up to 1.5% to the county or municipality (lower-rate areas total closer to 3-3.5%). By custom the 4% is split 50/50 between buyer and seller, though the split is negotiable.

Worked example: On a $300,000 New Castle County home at 4%, the total transfer tax is $12,000. Split 50/50, buyer and seller each owe $6,000 — before any first-time-buyer reduction on the buyer's portion. Property taxes themselves are county-assessed and are priority liens against the parcel.

Severalty, Encumbrances, and Easements

Ownership in severalty means one person (or one legal entity) holds title alone — 'severed' from all others — and bears full control and full probate exposure. Beyond who owns the land, the exam tests what burdens it:

An easement appurtenant benefits an adjoining parcel (the dominant estate) and burdens another (the servient estate); it runs with the land when sold. An easement in gross benefits a person or company (a utility) rather than neighboring land. A long, open, and continuous use can ripen into an easement by prescription — Delaware's statutory period for adverse possession and prescriptive rights is 20 years, a hard number worth memorizing. These encumbrances must appear on the seller disclosure and are exactly what title insurance (Section 3.4) protects buyers against.