28.3 Concurrent Ownership: Tenancy in Common, Joint Tenancy & Tenancy by the Entirety

28.3 Concurrent Ownership: Tenancy in Common, Joint Tenancy & Tenancy by the Entirety

Concurrent ownership questions usually ask what form of cotenancy the parties hold, whether something severed a joint tenancy, and how cotenants must account to one another for rents, expenses, and improvements.

---

The Three Concurrent Estates

                               ┌────────────────────────────────┐
                               │       Concurrent Estates       │
                               └───────────────┬────────────────┘
                                               │
            ┌──────────────────────────────────┼──────────────────────────────────┐
            ▼                                  ▼                                  ▼
┌──────────────────────┐           ┌──────────────────────┐           ┌──────────────────────┐
│  Tenancy in Common   │           │    Joint Tenancy     │           │Tenancy by the Entirety│
│        (TIC)         │           │        (JT)          │           │        (TBE)         │
├──────────────────────┤           ├──────────────────────┤           ├──────────────────────┤
│ • Modern Default     │           │ • Four Unities (PITT)│           │ • Married Spouses    │
│ • No Survivorship    │           │ • Survivorship Right │           │ • Survivorship Right │
│ • Alienable/Devisable│           │ • Trumps Wills       │           │ • Shield from Single │
│ • Unequal % allowed  │           │ • Severed by Inter   │           │   Spouse Creditors   │
│                      │           │   Vivos Conveyance   │           │ • No Unilateral Exit │
└──────────────────────┘           └──────────────────────┘           └──────────────────────┘

1. Tenancy in Common (TIC)

The Tenancy in Common is the standard, default form of concurrent ownership in modern American law. Any conveyance to two or more unmarried persons is presumed to create a Tenancy in Common unless explicit language indicates an intent to create a joint tenancy.

• Unity of Possession: The only unity required to create a Tenancy in Common is the unity of possession. Each co-tenant has an equal, non-exclusive right to possess the entire property, regardless of the disparity in their fractional ownership shares.
• Distinct Fractional Shares: Co-tenants can hold unequal percentages (e.g., A owns 70%, B owns 30%). Their shares may be acquired at different times, through different deeds, and from different grantors.
• No Right of Survivorship: When a tenant in common dies, their undivided interest does not pass to the surviving co-tenants. Instead, it passes through the deceased tenant's estate by will or intestate succession.
• Alienability: A tenant in common may freely sell, gift, lease, mortgage, or transfer their individual share inter vivos without obtaining the knowledge, consent, or joinder of other co-tenants.

2. Joint Tenancy with Right of Survivorship (JT)

A Joint Tenancy is a concurrent estate distinguished by the Right of Survivorship (ius accrescendi). When one joint tenant dies, that tenant's interest is extinguished automatically by operation of law, and the surviving joint tenant(s) continue to own the entire estate unburdened by the decedent's interest.

The Four Common-Law Unities (PITT)

To create a valid joint tenancy at common law, the co-tenants must acquire their interests satisfying the Four Unities simultaneously:

1. Possession: Every joint tenant must possess an identical, equal right to occupy and enjoy the whole property.
2. Interest: All joint tenants must hold equal undivided shares with identical estate durations (e.g., two joint tenants must each hold a 50% fee simple interest; one cannot hold a 60% fee simple while the other holds a 40% life estate).
3. Time: The interests of all joint tenants must vest or be acquired at the exact same point in time.
4. Title: The interests must be created in the exact same instrument (the same deed or will).

Express Survivorship Language Required

Because statutes universally disfavor joint tenancies in favor of tenancies in common, the granting instrument must use clear, affirmative words of survivorship: "to A and B as joint tenants with right of survivorship, and not as tenants in common." A grant simply "to A and B jointly" is insufficient in most jurisdictions and creates merely a Tenancy in Common.

Survivorship Trumps Wills

The right of survivorship operates instantaneously upon death. Therefore, a provision in a joint tenant's will attempting to devise their joint tenancy interest is a legal nullity. The decedent's interest vanishes the millisecond death occurs, leaving nothing to pass under the will.

---

Severance of Joint Tenancy

A joint tenancy is severed whenever any of the four unities is destroyed. Upon severance, the affected share converts into a Tenancy in Common.

                    [A & B hold as Joint Tenants]
                                  │
                    A conveys interest to C (Deed)
                                  │
                                  ▼
                    [B & C hold as Tenants in Common]


            [A, B, & C hold as Joint Tenants (1/3 each)]
                                  │
                    A conveys interest to D (Deed)
                                  │
                                  ▼
             D holds 1/3 as a Tenant in Common with [B & C]
             B & C hold 2/3 as Joint Tenants BETWEEN THEMSELVES

1. Inter Vivos Conveyance

• Voluntary Transfer: If joint tenant A conveys her interest to third party C, the unities of time and title are shattered. C becomes a tenant in common with B. B no longer has survivorship rights against C.
• Multi-Party Severance: If A, B, and C are joint tenants (each holding a 1/3 share) and A conveys her interest to D, D holds a 1/3 share as a tenant in common with B and C. However, the joint tenancy remains intact between B and C as to their remaining 2/3 interest. If B subsequently dies, C takes B's share by survivorship, giving C a 2/3 share as a tenant in common with D's 1/3 share.
• Secret Conveyances: An unrecorded inter vivos deed executed by one joint tenant severs the joint tenancy immediately upon delivery, even if the other joint tenants are completely unaware of the transfer.

2. Mortgages: Lien Theory vs. Title Theory

A critical MBE topic is the effect of a mortgage executed by only one joint tenant:

3. Contracts of Sale & Equitable Conversion

When a joint tenant executes an enforceable contract to convey their interest, the doctrine of Equitable Conversion severs the joint tenancy in equity on the date the contract is signed, even though legal title does not pass until the closing.

4. Judicial Partition

Any joint tenant or tenant in common possesses an absolute right to petition a court for partition, which formally dissolves the concurrent relationship:

• Partition in Kind: Physical division of the acreage into separate, individually owned parcels. Favored by courts unless the land is an urban lot, contains improved structures, or physical division would severely impair total economic value.
• Partition by Sale: The court orders the property sold at a public auction and divides the net sale proceeds proportionally among the co-tenants according to their respective interests.

---

Tenancy by the Entirety (TBE)

A Tenancy by the Entirety is a protected marital estate recognized in approximately half of U.S. jurisdictions. It exists exclusively between legally married spouses and carries an indestructible right of survivorship.

• Creation: Requires the four unities of PITT plus the unity of marriage (the parties must be legally married at the time the deed is delivered). In states recognizing TBE, a deed to spouses jointly is presumed to create a Tenancy by the Entirety.
• The Absolute Creditor Shield: Creditors of only one spouse cannot attach, execute, or place an involuntary judgment lien upon property held in a Tenancy by the Entirety. Only joint creditors of both spouses can levy against TBE real estate.
• No Unilateral Alienation or Severance: Neither spouse acting independently can convey, encumber, lease, mortgage, or sever a Tenancy by the Entirety. Any deed or mortgage executed by one spouse alone is a legal nullity.

Termination of Tenancy by the Entirety

A Tenancy by the Entirety can be terminated through only four exclusive events:

1. Death of either spouse (surviving spouse takes the whole fee simple absolute);
2. Divorce (automatically dissolves the marital unity, converting the estate by operation of law into a Tenancy in Common with equal 50/50 shares);
3. Mutual Agreement in writing signed by both spouses; or
4. Execution by a Joint Creditor of both spouses.

---

Rights and Duties of Co-Tenants

Whether co-tenants hold as joint tenants or tenants in common, their ongoing financial relationship is governed by uniform rules of property law:

1. Possession and Rents

• Exclusive Possession: Each co-tenant has the right to occupy 100% of the property. A co-tenant who chooses to occupy the entire property does not owe rent to absent co-tenants, nor does the occupying tenant have to account for the value of their personal occupancy.
• Ouster: If the occupying co-tenant wrongfully prevents another co-tenant from entering or exercising their possessory rights (e.g., changing the door locks and stating "you have no right to enter"), an ouster has occurred. Upon ouster, the ousted co-tenant is entitled to collect their pro rata share of the fair rental value of the property from the occupying tenant for the duration of the exclusion.
• Third-Party Rental Income: A co-tenant who leases the property to a third-party tenant must account to the other co-tenants for their proportionate share of the net rental income received from the third party.

2. Carrying Costs (Taxes, Mortgage Interest, and Insurance)

• Pro Rata Contribution: Each co-tenant is legally obligated to contribute their proportionate share of mandatory carrying charges, including ad valorem property taxes and interest payments on encumbering mortgages.
• Occupying Tenant Offset: If an occupying co-tenant pays 100% of the property taxes and mortgage interest, they may seek contribution from absent co-tenants for their share. However, if the occupying co-tenant is in sole possession, their right of contribution is reduced by the fair rental value of their occupancy.

3. Repairs and Improvements

• Necessary Repairs: A co-tenant who carries out necessary, reasonable repairs cannot compel affirmative, independent contribution from other co-tenants during the co-tenancy. However, the repairing co-tenant is entitled to a credit or reimbursement for those repair costs in an accounting action for third-party rents or upon formal judicial partition.
• Voluntary Improvements: There is no right of contribution for voluntary capital improvements, regardless of how beneficial or aesthetic. A co-tenant who builds a swimming pool or tennis court cannot force co-tenants to reimburse them. However, at judicial partition, the improving tenant is credited with any increase in property value resulting from the improvement (or suffers the full loss if the improvement reduced property value).

---

Comparative Table: Concurrent Estates

---

More on Co-Ownership

Other Severance Questions

• Leases by one joint tenant: Jurisdictions divide. Some treat a lease as a severance; others hold that a lease by one joint tenant does not sever and ends when the leasing tenant dies (Tenhet v. Boswell, Cal. 1976).
• Judgment liens: A judgment lien against one joint tenant's interest generally does not sever the joint tenancy until the property is sold at an execution sale. If the debtor dies first, the survivor usually takes free of the lien.
• Killing a cotenant: Slayer statutes treat a joint tenant who feloniously and intentionally kills another joint tenant as having severed the tenancy, so the killer cannot take by survivorship.
• Simultaneous death: Under the Uniform Simultaneous Death Act, if joint tenants die without clear evidence that one survived the other by the required period (120 hours under the revised act), the property is divided equally as if each survived the other.
• Agreements: An agreement among joint tenants to hold as tenants in common, or conduct showing a mutual intent to end survivorship, severs the joint tenancy.

Leasing, Waste, and Adverse Possession Among Cotenants

• Leasing a share: A cotenant may lease her own interest; the lessee steps into her shoes and shares possession but cannot exclude the other cotenants.
• Waste: A cotenant who commits waste—for example, by removing timber or minerals beyond her share—must account to the other cotenants.
• Adverse possession: Because each cotenant is entitled to possess the whole, exclusive possession by one cotenant is presumed permissive. The statutory period begins only after an ouster or an unequivocal notice to the other cotenants that the possessor claims exclusive ownership.

Partition Details

• Heirs property: Many states have adopted the Uniform Partition of Heirs Property Act, which gives cotenants buyout rights and favors partition in kind for family-owned land passed down without a will.
• Tenancy by the entirety: Neither spouse may obtain partition while the marriage lasts.
• Agreements not to partition: Cotenants may agree to waive partition for a reasonable time; such agreements are enforced as reasonable restraints.