Webinar Essay Series

WEBINAR ESSAY SERIES

REAL PROPERTY ESSAY #1

MODEL ANSWER

In 1980, Fred, a widower and the owner of Blackacre, a farm, died and by his will devised Blackacre to his three children, "Art, Bob, and Carol as joint tenants with common law right of survivorship." Art, who had lived with his father on Blackacre, continued to occupy and farm it after Fred's death. Bob and Carol, although claiming equal rights to Blackacre, preferred to continue living in the cities in which they owned their homes and never went into possession of Blackacre.

Art lost money in his farming operations in each of the years 1980 to 1985. At the end of 1985, without consulting either Bob or Carol, Art conveyed by quitclaim deed all of his "right, title and interest in Blackacre to Dan and his heirs." Dan immediately took possession of Blackacre.

In 1990, Bob died intestate survived by Sam, his sole heir, and by Art, Carol and Dan. During the period from 1986 to 1995, the net profits resulting from Dan's operation of the farm amounted to $80,000. During the period from 1992 to 1995, Dan also received net rentals of $8,000 from a tenant renting a cottage on the farm.

Assume that there is a 10-year statute of limitations for the recovery of land and that no other statute of limitations applies.

What interest does each of the following have in Blackacre: Dan? Sam? Carol? Discuss.

What rights do Sam and Carol have with respect to the profits in the years from 1986-1995 and the rents from 1992 to 1995? Discuss.

3. Is Carol liable to Art for any of the monetary losses suffered by Art from 1980 through 1985? Discuss.

MODEL ANSWER

I. What interest does each of the following have in Blackacre: Dan? Sam? Carol? Discuss.

CONCURRENT INTERESTS.

JOINT TENANCY.

A joint tenancy involves two or more owners of property, with a right of survivorship. The granting instrument must clearly state that there is a joint tenancy with a right of survivorship, because modernly a joint tenancy is disfavored due to the fact that they are often used to avoid probate. A joint tenant may convey their interest during their lifetime, without the permission of the other joint tenants.

Here, Fred, a father, left a specific grant of Blackacre to Art, Bob and Carol, with right of survivorship. This is a clear grant of a joint tenancy.

FOUR UNITIES. The four unities must be present at the creation of a joint tenancy. The four unities include taking the interests at the same time, through the same title, with identical equal interests, and with identical possession rights to possess the whole property. In other words: Time, Title, Interest and Possession. Here, Art, Bob and Carol took their interests with the four unities. Even though Bob and Carol decided not to live at Blackacre, they still retained their right of possession in Blackacre.

DAN’S INTEREST.

SEVERANCE OF ART’S INTEREST. Severance of a joint tenancy may occur through a sale, a mortgage, through partition, death, or via an agreement. A joint tenant may sell or transfer their interest during their lifetime, with or without the knowledge of the other joint tenants. However, such a sale will sever the four unities on the date of the land-sale contract, thereby establishing a tenancy in common between the new tenant and the remaining joint tenants, but the remaining joint tenants will still be joint tenants between themselves.

Art sold his share in Blackacre to Dan, via a quitclaim deed, that did not make any promises or covenants regarding the deed. The sale severed the previous joint tenancy, and established Dan as a tenant in common with no right of survivorship, with respect to Bob and Carol. Bob and Carol, however, retained their joint tenancies. Art could not convey all of Blackacre, even though he was the only person who lived at Blackacre. He could only convey his share of Blackacre. Therefore, upon taking his interest, Dan took as a tenant in common. He

owned an individual part of the whole estate.

ADVERSE POSSESSION / OUSTER. Ousters take place when:

A co-tenant in possession refuses another co-tenants’ demand to share the property.
A co-tenant attempts to convey sole ownership of the entire property to another and the grantee takes possession with notice to other co-tenants.

When a co-tenant asserts a hostile claim to sole ownership and other co-tenants have notice.

Once an ouster occurs, this will indicate the hostility element for adverse possession. An ouster will not occur merely because only one co-tenant lives on the property. If there is an ouster, a co-tenant who has exclusive continuous possession of the property for the statutory period, may take via adverse possession. Here, it appears as though Dan has exclusive and continuous possession of Blackacre, from 1985 to at least 1995, thus meeting the statutory requirement of ten years. He also had actual and open possession of Blackacre, thus meeting most of the requirements for adverse possession. The question is whether he had properly ousted Bob and Carol. There is no indication that Art tried to convey the entire estate of Blackacre, especially since he conveyed only through a quitclaim deed, with no promises or covenants. Additionally, Dan never asserted a hostile claim to sole ownership through notice to Bob and Carol, which is another way he could have ousted the other co-tenants. Therefore, absent an ouster, Dan would not have a claim to Blackacre in adverse possession.

SAM’S INTEREST.

SAM IS SOLE HEIR OF BOB / RIGHT OF SURVIVORSHIP. A surviving joint tenant automatically takes the property on the death of another joint tenant. The family of a joint tenant is not entitled to any share of a joint tenancy. Sam is the sole heir of Bob, and therefore, Sam may be entitled to much of Bob's estate. However, Bob, as a joint tenant, did not have the ability to transfer his share of Blackacre after his death, because at his death, his share transfers automatically to any other joint tenants through their right of survivorship. Therefore, Sam is not entitled to any share of Blackacre.

CAROL’S INTEREST.

CAROL’S RIGHT OF SURVIVORSHIP IN JOINT TENANCY.

Carol retained her right of survivorship as to other joint tenants, even after Art terminated his right of survivorship through a sale of his share. Therefore, upon Bob's death, his share one-third share of Blackacre transferred automatically to Carol, and Carol would hold a two-third's share in Blackacre.

CONCLUSION. Dan's share of Blackacre is a one-third share as a tenant in common, Sam has no share of Blackacre, and Carol has a two-third's share of Blackacre.

II. What rights do Sam and Carol have with respect to the profits in the years from 1986-1995 and the rents from 1992 to 1995? Discuss.

NO NEED TO ACCOUNT TO OTHER CO-TENANTS for PROFITS.

There is no need to account for profits made, unless one is keeping another off the property, there is a lease by a co-tenant to a third party, there is a depletion of natural resources, or there is an agreement to share.

Here, there is no evidence of an agreement to share. Also, as stated earlier, there was no ouster. Additionally, there was no depletion of natural resources. However, Dan rented a cottage on the property from 1992-1995. A co-tenant who leases all or part of the property, must account to the other co-tenants for their fair pro-rata share of rental income based on initial contribution or contract.

CAROL. Carol would not be allowed any portion of the profits from Blackacre, because she was a non-occupying tenant. However, she would be entitled to her pro rata share of rents from1992-1995.

SAM. Sam, as Bob's heir, would be entitled only to the same rights that Bob had while Bob was alive. Since Bob died in 1990, Sam may have only the rights that Bob had up until that time. Since Blackacre was not rented until after Bob died, Sam would not be entitled to any share of the rent. Additionally, Bob was a non-occupying co-tenant with no right to profits, therefore, Sam would have no right to profits.

CONCLUSION. Carol is entitled to her pro rata share of rents, but she is not entitled to an y profits. Sam is not entitled to either profits or rents.

III. Is Carol liable to Art for any of the monetary losses suffered by Art from 1980 through 1985? Discuss.

CONTRIBUTION / CARRYING COSTS / ENCUMBRANCES.

Each co-tenant is responsible for their share of carrying costs such as taxes and mortgage payments, by percentage of ownership. If one co-tenant has sole possession of the property without ouster, that co-tenant is entitled to contribution from the other co-tenants for taxes, insurance and other carrying costs, and may recover for these costs. However, a co-tenant in sole possession must offset the carrying costs against the value of the benefit derived from use and occupation of the property, which will often be in excess of the carrying costs.

The question here is whether Carol should be liable for the losses suffered by Art from 1980-1985. At that time period, Art and Carol were joint tenants. Carol would be responsible for her share of taxes and mortgage payments, and for improvements that Art informed her about before improvements were enacted. However, Carol is not responsible for Art's faulty farming, because such losses in a joint tenancy are not attributable to the non-possessing co-tenants.

CONCLUSION. Carol is not liable for monetary losses due to Art's faulty farming.