Ownership of real property - Rights and obligations of cotenants

Learning Outcomes

After reading this article, you will be able to distinguish the main types of cotenancy, identify the rights and obligations of cotenants regarding possession, rent, expenses, and improvements, and apply the rules governing ouster and partition. You will be equipped to answer MBE questions on concurrent ownership, including scenarios involving rent, repairs, and the right to force a sale or division of property.

MBE Syllabus

For the MBE, you are required to understand the forms of concurrent ownership and the associated rights and duties of cotenants. For revision, focus on:

  • Distinguishing tenancy in common, joint tenancy, and tenancy by the entirety, including creation, survivorship, and severance.
  • The right of each cotenant to possess the whole property and the rules regarding ouster.
  • The obligation to share rents and profits from third parties.
  • Contribution rights for taxes, mortgage payments, repairs, and improvements.
  • The right to partition and the forms it may take.
  • The absence of a general fiduciary duty between cotenants, except in special circumstances.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

  1. Which cotenancy form includes a right of survivorship?
    1. Tenancy in common
    2. Joint tenancy
    3. Tenancy by the entirety
    4. Both b) and c)
  2. If one cotenant leases the property to a third party, what is the general rule regarding rent?
    1. The leasing cotenant keeps all rent
    2. Rent must be shared proportionally with all cotenants
    3. Only cotenants in possession share rent
    4. Rent is owed only if there is an ouster
  3. Can a cotenant in sole possession generally require other cotenants to contribute to the cost of improvements?
    1. Yes, always
    2. No, never
    3. Only if the improvement increases value and there is a partition or sale
    4. Only if the other cotenants consent in writing

Introduction

Concurrent ownership arises when two or more persons hold title to the same real property at the same time. Each concurrent owner, or cotenant, has rights and responsibilities regarding the property and the other cotenants. The three main types of cotenancy tested on the MBE are tenancy in common, joint tenancy, and tenancy by the entirety. Understanding the distinctions between these forms, and the rules governing possession, expenses, and partition, is essential for MBE success.

Types of Cotenancy

Tenancy in Common

A tenancy in common is the default form of concurrent ownership. Unless a deed or will expressly states otherwise, a conveyance to two or more persons creates a tenancy in common.

  • Each tenant in common owns a separate, undivided fractional share (which may be equal or unequal).
  • There is no right of survivorship: when a tenant in common dies, their interest passes by will or intestacy, not automatically to the other cotenants.
  • Each interest is freely transferable, devisable, and inheritable.

Key Term: Tenancy in Common A concurrent estate where two or more persons hold undivided shares in the same property, with no right of survivorship. Each share is descendible and may be conveyed separately.

Joint Tenancy

A joint tenancy is characterized by the right of survivorship: when one joint tenant dies, their interest passes automatically to the surviving joint tenant(s).

  • Creation requires the "four requirements" (PITT):
    1. Possession: Each joint tenant has the right to possess the whole.
    2. Interest: Each has an equal, undivided interest.
    3. Time: Interests vest at the same time.
    4. Title: Interests are acquired by the same instrument.
  • Modern law requires clear language of intent, usually including "as joint tenants with right of survivorship."
  • Severance: If any requirement is destroyed (e.g., by inter vivos transfer), the joint tenancy is severed as to that share, which becomes a tenancy in common.

Key Term: Joint Tenancy A concurrent estate where two or more persons own property with right of survivorship. Requires the four requirements at creation. A deceased joint tenant's share passes automatically to the survivors.

Tenancy by the Entirety

A tenancy by the entirety is a special marital estate available only to spouses.

  • Creation requires the four requirements plus marriage.
  • Includes a right of survivorship.
  • In most states, creditors of one spouse cannot reach property held in tenancy by the entirety.
  • Severance occurs only by death, divorce, mutual agreement, or execution by a joint creditor.

Key Term: Tenancy by the Entirety A concurrent estate between married spouses with right of survivorship. Neither spouse can unilaterally convey or encumber the property.

Rights and Obligations of Cotenants

Possession

Each cotenant has the right to possess and enjoy the entire property, regardless of their fractional share. A cotenant in sole possession generally does not owe rent to cotenants out of possession, unless there has been an ouster or an agreement to the contrary.

Key Term: Ouster The wrongful exclusion of a cotenant from possession of the whole or any part of the commonly owned property.

If a cotenant in possession denies another cotenant access to the property, this is an ouster. The ousted cotenant may sue for their share of the fair rental value for the time they were excluded.

Rents and Profits

  • From Own Use: A cotenant in possession need not share profits from their own use (e.g., farming), unless the use constitutes waste.
  • From Third Parties: If a cotenant leases the property to a third party, they must account to the other cotenants for their proportionate share of the rent, less operating expenses.
  • From Exploiting Resources: Profits from depleting the land (e.g., mining) must be shared according to ownership shares.

Expenses

  • Taxes and Mortgage Payments: Each cotenant must pay their share of taxes and mortgage payments. A cotenant who pays more than their share may demand contribution from the others. If the paying cotenant is in sole possession, their right to contribution is limited to amounts exceeding the fair rental value of the property.
  • Repairs: A cotenant who pays for necessary repairs may recover a proportionate share from the others, but usually only in an accounting or partition action.
  • Improvements: There is no right to contribution for improvements. However, in a partition or sale, the improving cotenant may receive a credit for any increase in value attributable to the improvement (or bear the loss if the improvement decreases value).

Fiduciary Duties

Cotenants generally do not owe fiduciary duties to each other. However, if one cotenant acquires the property at a tax or foreclosure sale, they may be required to hold the property for the benefit of all cotenants if the others are willing to contribute their share of the purchase price.

Partition

Any tenant in common or joint tenant (but not a tenant by the entirety) has the right to partition the property.

  • Partition in Kind: The court divides the property physically among the cotenants if practical and fair.
  • Partition by Sale: If physical division is impractical or would decrease value, the court orders a sale and divides the proceeds according to ownership shares.
  • Accounting: In a partition action, the court will equitably account for necessary expenditures and improvements.

Key Term: Partition A legal action to physically divide or sell concurrently owned property, terminating the cotenancy.

Worked Example 1.1

Three siblings inherit a house as tenants in common. One sibling lives in the house for four years, paying all property taxes and making $10,000 in roof repairs. The other siblings do not request possession or pay any expenses. Can the resident sibling demand rent from the others? Can they demand contribution for taxes and repairs?

Answer: The resident sibling cannot demand rent from the others; a cotenant in possession generally owes no rent unless there is ouster. The resident sibling can demand contribution for taxes (shared equally), but not for repairs unless there is an accounting or partition. The $10,000 in repairs may be credited in a partition action, but there is no immediate right to contribution.

Worked Example 1.2

Two joint tenants own a rental property. One leases the property to a third party and collects all rent. What must the leasing cotenant do?

Answer: The cotenant who leased the property must account to the other cotenant for their share of the rent, after deducting operating expenses. Rent from third parties must be shared proportionally among all cotenants.

Exam Warning

Exam Warning On the MBE, be alert for questions where a cotenant in possession is sued for rent by an out-of-possession cotenant. Unless there is ouster or an agreement, no rent is owed. Many students incorrectly assume rent is always due.

Revision Tip

Revision Tip Remember: Contribution for repairs and improvements is generally unavailable unless there is a partition or accounting. Taxes and mortgage payments are different—contribution is usually required.

Summary

Cotenants share the right to possess the whole property. Rent from third parties and essential expenses (taxes, mortgage) must be shared. Repairs and improvements are credited only in partition. Partition is available to tenants in common and joint tenants, but not to tenants by the entirety.

Key Point Checklist

This article has covered the following key knowledge points:

  • Three main types of cotenancy: tenancy in common, joint tenancy, tenancy by the entirety.
  • Tenancy in common is the default; no survivorship.
  • Joint tenancy requires four requirements and has right of survivorship; severed by transfer.
  • Tenancy by the entirety is for spouses; includes survivorship and creditor protection.
  • Each cotenant has the right to possess the whole property.
  • Ouster occurs when a cotenant is excluded; ousted cotenant may claim rent.
  • Cotenants must share rent from third parties.
  • Contribution for taxes and mortgage payments is required; repairs and improvements are credited only in partition.
  • Partition (in kind or by sale) is available to tenants in common and joint tenants.

Key Terms and Concepts

  • Tenancy in Common
  • Joint Tenancy
  • Tenancy by the Entirety
  • Ouster
  • Partition
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