Ownership of real property - Severance

Learning Outcomes

After reading this article, you will be able to explain what severance of real property ownership means, identify the legal consequences of severing a joint tenancy, distinguish between the main methods of severance, and apply these principles to MBE-style questions. You will also be able to spot common exam traps and avoid typical errors related to severance.

MBE Syllabus

For the MBE, you are required to understand the rules governing the severance of concurrent ownership interests in real property. This includes the legal effects of severing a joint tenancy, the methods by which severance can occur, and the impact on the right of survivorship. During your revision, focus on:

  • The distinction between joint tenancy and tenancy in common.
  • The legal consequences of severance, especially regarding survivorship.
  • The recognized methods by which severance can occur (e.g., inter vivos transfer, mutual agreement, mortgage, lease).
  • The effect of severance on the interests of co-owners.
  • Examining how severance interacts with other property law concepts, such as partition and death of a co-owner.

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 of the following actions will always sever a joint tenancy?
    1. One joint tenant dies.
    2. One joint tenant sells their interest to a third party.
    3. One joint tenant makes a will leaving their share to a friend.
    4. One joint tenant mortgages their interest in a lien theory state.
  2. After severance of a joint tenancy, the former joint tenants hold title as:
    1. Tenants by the entirety.
    2. Tenants in common.
    3. Joint tenants with right of survivorship.
    4. Life tenants.
  3. Which of the following does NOT usually sever a joint tenancy?
    1. Partition by mutual agreement.
    2. Inter vivos sale by one joint tenant.
    3. Granting a lease for a term of years in a majority jurisdiction.
    4. Execution of a mortgage in a title theory state.

Introduction

Severance in the context of real property refers to the process by which a joint tenancy is converted into a tenancy in common. This change has significant legal consequences, especially regarding the right of survivorship. Understanding how and when severance occurs is essential for MBE success, as questions often test both the methods and effects of severance.

Key Term: Severance The act or event that converts a joint tenancy into a tenancy in common, ending the right of survivorship.

Types of Concurrent Ownership

The two most commonly tested forms of concurrent ownership are joint tenancy and tenancy in common. Joint tenancy is characterized by the right of survivorship, meaning that when one joint tenant dies, their interest passes automatically to the surviving joint tenant(s). In contrast, tenancy in common does not include survivorship; each tenant’s share passes according to their will or intestacy.

Key Term: Joint Tenancy A form of concurrent ownership where two or more persons hold equal interests with the right of survivorship.

Key Term: Tenancy in Common A form of concurrent ownership where each owner has a separate, undivided interest that passes to their heirs or devisees, not by survivorship.

Methods of Severance

A joint tenancy can be severed in several ways, each with distinct legal effects:

1. Inter Vivos Transfer

If a joint tenant sells or conveys their interest to another person during their lifetime, the joint tenancy is severed as to that share. The transferee becomes a tenant in common with the remaining joint tenants.

2. Mutual Agreement

All joint tenants may agree to sever the joint tenancy, converting it into a tenancy in common.

3. Partition

A partition action, whether voluntary or by court order, divides the property or its proceeds and severs the joint tenancy.

4. Mortgage

The effect of a mortgage on severance depends on the jurisdiction:

  • Title theory states: A mortgage by one joint tenant is treated as a transfer of title, severing the joint tenancy.
  • Lien theory states: A mortgage is viewed as a lien and does not sever the joint tenancy.

5. Lease

Granting a lease may or may not sever a joint tenancy, depending on the jurisdiction. In most states, a lease by one joint tenant does not sever the joint tenancy, but in some, it does.

Legal Consequences of Severance

Once a joint tenancy is severed, the right of survivorship is lost. The former joint tenants now hold as tenants in common, and each share is freely devisable and inheritable. Severance affects only the interest of the joint tenant who acts; the remaining joint tenants continue as joint tenants among themselves unless all shares are severed.

Worked Example 1.1

Three siblings, A, B, and C, own property as joint tenants. A sells her interest to X. What is the resulting ownership structure?

Answer: The sale by A severs the joint tenancy as to her share. X becomes a tenant in common with B and C. B and C remain joint tenants with each other as to their combined two-thirds interest.

Worked Example 1.2

Two friends, D and E, own land as joint tenants in a lien theory state. D takes out a mortgage on her interest. Does this action sever the joint tenancy?

Answer: In a lien theory state, D’s mortgage is treated as a lien and does not sever the joint tenancy. The right of survivorship remains unless and until D’s interest is foreclosed and sold.

Exam Warning

Be careful: The effect of a mortgage on severance depends on whether the jurisdiction follows the title theory or lien theory. Always check which rule applies in the question.

Revision Tip

Remember: Death of a joint tenant does NOT sever the joint tenancy—the right of survivorship operates automatically. Severance only occurs through a qualifying act during life.

Key Point Checklist

This article has covered the following key knowledge points:

  • Severance converts a joint tenancy into a tenancy in common, ending the right of survivorship.
  • Inter vivos transfer by a joint tenant always severs the joint tenancy as to that share.
  • Partition and mutual agreement are recognized methods of severance.
  • The effect of a mortgage on severance depends on whether the state follows title theory (severs) or lien theory (does not sever).
  • After severance, the former joint tenants hold as tenants in common, and their shares pass by will or intestacy.
  • Severance affects only the interest of the acting joint tenant; others may remain joint tenants among themselves.

Key Terms and Concepts

  • Severance
  • Joint Tenancy
  • Tenancy in Common
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