Concurrent Ownership

Throughout the preceding chapters, this treatise has examined ownership as though a single person held an interest in land. We have studied fee simple ownership, life estates, future interests, reversions, remainders, and defeasible fees. Each of those doctrines focused primarily on the rights of an individual owner.

Real property, however, is frequently owned by more than one person at the same time.

Married couples purchase homes together. Siblings inherit family farms. Business partners acquire commercial property. Investors purchase rental properties jointly. Trusts may hold property for multiple beneficiaries, and heirs often become co-owners through probate.

These arrangements are known collectively as concurrent ownership, sometimes called co-tenancy or concurrent estates. Rather than dividing the land into separate physical portions, concurrent ownership generally allows multiple persons to hold present ownership interests in the same parcel simultaneously. The legal consequences of that shared ownership depend upon the particular form of concurrent estate created. (Legal Information Institute)

A concurrent ownership exists when two or more persons hold present ownership interests in the same estate at the same time. (Legal Information Institute)

The defining characteristic of concurrent ownership is that each co-owner generally possesses an undivided interest in the property. An undivided interest does not entitle a person to a particular room, acre, or corner of the property. Instead, each co-owner ordinarily has the legal right to possess and use the entire property, subject to the equal rights of the other co-owners. (Legal Information Institute)

This concept often surprises new students of property law.

Suppose Alice owns a one-third interest in Blackacre and Benjamin owns the remaining two-thirds.

Although their ownership percentages differ, Alice does not own one-third of the physical land while Benjamin owns the remaining two-thirds. Instead, each generally has the right to possess and enjoy the whole property, with their ownership percentages becoming most significant when profits, expenses, sale proceeds, or partition are determined. (Legal Information Institute)

Concurrent ownership may be contrasted with sole ownership.

This distinction may be summarized as follows:

• Sole Ownership — One owner holds the present estate. One person exercises ownership rights. No questions of survivorship between owners.
• Concurrent Ownership — Two or more owners hold present interests simultaneously. Ownership rights are shared among co-owners. Rights may depend upon the form of co-ownership.

Property law recognizes concurrent ownership because individuals often wish to own land together.

Common examples include:

• married couples purchasing a family residence;
• unmarried individuals purchasing investment property;
• siblings inheriting property from parents;
• business partners acquiring commercial real estate;
• family farms transferred to multiple heirs;
• trusts holding property for several beneficiaries; and
• estate planning arrangements designed to avoid unnecessary transfers.

Recognizing concurrent ownership allows property to be acquired, managed, and transferred collectively while providing established legal rules for resolving disputes concerning possession, survivorship, transferability, creditors, and partition. Because co-ownership affects title and succession, the law limits concurrent estates to recognized forms rather than allowing unlimited customization. (Legal Information Institute)

The most common form of concurrent ownership is the tenancy in common. (Legal Information Institute)

A tenancy in common exists when two or more persons own separate, undivided interests in the same property without a right of survivorship. In many jurisdictions, it is the default form of concurrent ownership unless the conveyance clearly creates another estate. (Legal Information Institute)

A tenancy in common has several defining characteristics.

Separate Undivided Interests

Each tenant in common owns an individual interest in the property.

Those interests may be:

• equal;
• unequal;
• acquired at different times; or
• obtained through different conveyances.

Nevertheless, each co-owner ordinarily retains the right to possess the entire property. (Legal Information Institute)

No Right of Survivorship

Perhaps the most important characteristic is the absence of survivorship.

When one tenant in common dies, that person's interest does not automatically pass to the surviving co-owner.

Instead, the deceased owner's interest passes according to:

• a valid will; or
• the applicable laws governing intestate succession.

Transferability

Each tenant in common may generally:

• sell the interest;
• give the interest away;
• mortgage the interest;
• devise it by will; or
• allow it to pass through inheritance.

The remaining co-owners continue to own their respective interests.

Example

• Present Estate: Tenancy in Common.

In many jurisdictions, unless the deed clearly expresses an intent to create a joint tenancy or another recognized form of co-ownership, the conveyance creates a tenancy in common. (Legal Information Institute)

A joint tenancy is another recognized form of concurrent ownership, distinguished primarily by its right of survivorship. (Legal Information Institute)

Under a joint tenancy, each owner possesses an equal undivided interest in the property. When one joint tenant dies, that person's interest disappears, and the surviving joint tenant or tenants automatically acquire the deceased owner's share without probate. (Legal Information Institute)

The Right of Survivorship

The right of survivorship is the defining feature of a joint tenancy.

For example:

• If A dies first:
• A's interest does not pass through A's estate.
• B automatically becomes the sole owner.

Because survivorship alters the ordinary rules of inheritance, courts generally require clear language demonstrating an intent to create a joint tenancy. Many jurisdictions presume a tenancy in common when survivorship language is absent. (Legal Information Institute)

The Four Unities

Traditionally, a valid joint tenancy required four unities:

• Time — each owner acquires the interest at the same time.
• Title — each owner receives title through the same instrument.
• Interest — each owner receives an equal interest.
• Possession — each owner has equal rights to possess the whole property.

If one of these unities is destroyed under applicable law, the joint tenancy may be severed, often resulting in a tenancy in common. (Legal Information Institute)

A tenancy by the entirety is a specialized form of concurrent ownership recognized in many states for married spouses. (Legal Information Institute)

Like a joint tenancy, tenancy by the entirety generally includes a right of survivorship. However, it is based upon the legal relationship between the spouses and often carries additional legal protections, particularly concerning transferability and creditor claims. The exact rules vary considerably among the states. (Legal Information Institute)

Common characteristics include:

• ownership limited to spouses where recognized by law;
• equal undivided ownership;
• survivorship;
• restrictions on unilateral transfer by one spouse; and
• potential protection against the separate creditors of one spouse under state law.

Because state statutes differ significantly, readers should consult the law governing the jurisdiction in which the property is located.

Several states follow a community property system rather than relying exclusively upon common-law concurrent ownership principles. (Legal Information Institute)

Generally speaking, community property systems distinguish between:

• community property, acquired during marriage under applicable law; and
• separate property, owned before marriage or acquired under circumstances specified by statute.

Community property involves a distinct body of law beyond the scope of this introductory chapter and will be examined separately in a future volume addressing marital property and family law.

Although the forms of concurrent ownership differ, co-owners generally share several important rights and responsibilities.

Right of Possession

Each co-owner ordinarily possesses the right to occupy and use the entire property, subject to the equal rights of the other owners. (Legal Information Institute)

Sharing Rents and Profits

When one co-owner receives income generated by the property, questions may arise regarding the proper distribution of those proceeds under applicable law.

Contribution

Co-owners may have obligations concerning:

• taxes;
• mortgage payments;
• maintenance;
• necessary repairs; and
• preservation of the property.

The allocation of these responsibilities depends upon the governing law and the circumstances of the ownership.

Accounting

Where one owner has managed the property or received income on behalf of the ownership group, another co-owner may seek an accounting to determine the proper allocation of revenues and expenses.

One of the most important remedies in concurrent ownership is partition. (Legal Information Institute)

Partition permits co-owners to terminate the co-tenancy when they no longer wish to own the property together.

Traditionally, courts recognize two principal forms.

Partition in Kind

The court physically divides the property so that each owner receives a separate parcel.

Partition in kind is generally more practical for large or undeveloped tracts of land.

Partition by Sale

If physical division would be impracticable or inequitable, the court may order the property sold and divide the proceeds among the owners according to their respective interests.

Partition actions are among the most common forms of litigation involving concurrent ownership.

The principal forms of concurrent ownership may be compared feature by feature:

The language of the conveyance determines the form of concurrent ownership.

Example One

• Present Estate: Tenancy in Common.

In many jurisdictions:

Example Two

• Present Estate: Joint Tenancy.

Example Three

The legal effect depends upon the governing state law and whether tenancy by the entirety is recognized and properly created.

When interpreting any deed involving multiple grantees, the reader should identify:

• the number of owners;
• the language describing their relationship;
• whether survivorship is expressly created; and
• whether applicable state law modifies the common-law rules.

Concurrent ownership plays a significant role in modern real estate practice.

These doctrines frequently arise in:

• residential home purchases;
• investment real estate;
• probate administration;
• estate planning;
• trust administration;
• business organizations;
• title examination;
• partition litigation; and
• creditor rights.

Because the form of ownership affects transferability, survivorship, probate, taxation, and title, properly identifying the concurrent estate is an essential part of any real property analysis.

Owning Half the Property Means Owning Half the Land

Incorrect. Most concurrent owners possess an undivided interest, meaning they generally have equal rights to possess the entire property regardless of their ownership percentage. (Legal Information Institute)

Joint Tenancy and Tenancy in Common Are the Same

They are not. The principal distinction is the right of survivorship, which generally exists in joint tenancy but not in tenancy in common. (Legal Information Institute)

Every Married Couple Automatically Owns Property as Tenants by the Entirety

Incorrect. Whether tenancy by the entirety exists depends upon state law and the manner in which title is taken. Not every jurisdiction recognizes this estate, and not every conveyance to spouses creates it automatically. (Legal Information Institute)

A proper study of concurrent ownership begins with binding legal authority.

Primary Authorities

• State property statutes
• State probate codes
• State conveyancing statutes
• Judicial decisions interpreting concurrent ownership
• Recorded deeds creating concurrent estates

Authoritative Secondary Sources

Among the leading secondary authorities are:

• Restatement (First) of Property
• Restatement (Third) of Property
• Powell on Real Property
• Thompson on Real Property
• Tiffany Real Property
• American Law of Property
• Corpus Juris Secundum (C.J.S.) Property
• American Jurisprudence 2d (Am. Jur. 2d) Property

These authorities explain and synthesize the doctrines of concurrent ownership but do not replace controlling statutes or judicial decisions.

• Concurrent ownership exists when two or more persons hold present ownership interests in the same property simultaneously. (Legal Information Institute)
• The principal common-law forms are tenancy in common, joint tenancy, and tenancy by the entirety, while community property exists in certain jurisdictions. (Legal Information Institute)
• Co-owners generally hold undivided interests, giving each the right to possess the whole property rather than a specific physical portion. (Legal Information Institute)
• Tenancy in common generally does not include survivorship, whereas joint tenancy and tenancy by the entirety generally do. (Legal Information Institute)
• The form of concurrent ownership affects inheritance, transferability, creditor rights, probate, and partition.
• Understanding concurrent ownership is essential before studying easements, covenants, deeds, title, and real estate transactions.

Next Chapter — Easements

The next chapter introduces easements, one of the most significant nonpossessory interests in real property. It examines how one person may acquire a legal right to use another person's land without acquiring ownership, the principal categories of easements, methods of creation and termination, and the role easements play in title examination, land development, utilities, and modern real estate practice.