Cotenancy: mortgages and leases by one joint tenant, rent and ouster, contribution, and partition

Black-letter propositions

1. 01

   The unities of interest, title, time, and possession are fundamental to a joint tenancy, and destruction of any of them by one of the joint tenants, voluntarily or involuntarily, severs the tenancy.

2. 02

   A mortgage given by one joint tenant of his interest does not sever the joint tenancy, so the surviving joint tenant's right of survivorship operates on the death of the mortgagor.

3. 03

   A surviving joint tenant takes by virtue of the conveyance that created the joint tenancy and not as the successor of the deceased, so a mortgage given by the deceased joint tenant does not survive as a lien on the survivor's property.

4. 04

   A lease of the joint property by one joint tenant for a term of years does not sever the joint tenancy, and it expires on the death of the lessor joint tenant, because a joint tenant's interest and any encumbrance he placed on it die with him.

5. 05

   In the absence of an agreement to pay rent or an ouster, a cotenant in possession is not liable to the other cotenants for the value of his use and occupation of the property.

6. 06

   Ouster for purposes of rent liability arises when the occupying cotenant refuses a demand of the other cotenants to be allowed into use and enjoyment of the land, and merely asking the occupying cotenant to vacate is not enough because he may rightfully occupy the whole.

7. 07

   Ouster for adverse possession purposes requires a showing that the possessing cotenant asserted complete ownership, which is a different showing from ouster for rent purposes.

8. 08

   In North Carolina a cotenant has a right to contribution from the other cotenants for the payment of the property's carrying costs, such as property taxes, insurance, repairs, and loan payments, and for the lesser of the value added by improvements or their actual cost.

9. 09

   A partition proceeding is by special proceeding in superior court, may be brought by any person claiming as a tenant in common or joint tenant, and must join all cotenants.

10. 10

    The court in a partition proceeding shall order actual partition unless the party seeking a sale proves by a preponderance of the evidence that actual partition cannot be made without substantial injury to any party, and it may not order a cotenant to continue to hold in cotenancy over the cotenant's objection.

Use this attack sequence under time

Common wrong turns

• A mortgage by one joint tenant does not sever the tenancy, but the lender's lien is lost if the mortgagor dies first.
• A lease by one joint tenant ends at his death, and the survivor is not bound by it.
• A cotenant in possession does not owe rent to the others merely because he is in possession.
• A partition sale requires a showing of substantial injury from a division in kind.

Worked example

Two brothers own a house as joint tenants. One brother mortgages his interest to secure a loan for a friend without telling the other, and then dies. The lender sues to enforce the mortgage against the surviving brother's house.

Practice this topic

Encumbrances by one joint tenant

Harms v. Sprague held that a mortgage given by one joint tenant of his interest does not sever the joint tenancy, that the surviving joint tenant therefore owned the property in its entirety on the mortgagor's death, and that the mortgage did not survive as a lien because the survivor succeeds to the deceased joint tenant's share by virtue of the original conveyance and not as his successor, and it described the unities of interest, title, time, and possession as fundamental.

Tenhet v. Boswell held that a joint tenant's lease of the property for 10 years, with an option to purchase, made without the other joint tenant's knowledge, did not sever the joint tenancy and expired upon the lessor joint tenant's death, because when a joint tenant dies his interest dies with him and encumbrances he placed on the property become unenforceable against the survivor.

Rent, ouster, and contribution

Spiller v. MacKereth held that in the absence of an agreement to pay rent or an ouster, a cotenant in possession is not liable to his cotenants for the value of his use and occupation, explained that the word ouster describes two different situations, the beginning of adverse possession and liability for rent, and that liability for rent arises when the occupying cotenant refuses the other cotenants' demand to be allowed into use and enjoyment of the land.

North Carolina General Statutes section 46A-27 gives a cotenant a right to contribution from the other cotenants for carrying costs, meaning the actual costs of preserving the value of the property including property taxes, insurance, repairs, and loan payments, and for the lesser of the value added by the cotenant's improvements at the start of the proceeding or their actual cost, with the property-tax contribution limited to taxes paid in the 10 years before the petition.

Partition

North Carolina General Statutes section 46A-21 allows any person claiming as a tenant in common or joint tenant to petition to partition in superior court and requires joinder of all tenants in common and joint tenants, and section 46A-26 lists the methods of partition including actual partition, partition sale, a combination, and partition of part with the rest remaining in cotenancy, though the court may not order a cotenant to remain a cotenant over objection.

Section 46A-75 provides that the court shall order a sale in lieu of actual partition only if it finds by a preponderance of the evidence that actual partition cannot be made without substantial injury to any party, that the party seeking sale bears the burden of proof, and that the court must consider whether the fair market value of each share in a partition would be materially less than the share of a sale of the whole, whether a partition would materially impair any cotenant's rights, and whether owelty would mitigate injury.

Frequently asked questions