Owning property can be complicated. The purpose of this blog post is to talk about different ways to hold title, and provides information on the meaning of some common terms so the average person can better understand their rights and responsibilities with respect to their property. Different types of property ownership come with different rights. By better understanding these terms, we hope to empower people to able to make the best possible decisions when faced with difficult situations.
An undivided co-ownership exists when an entire property belongs to two or more owners. An undivided interest includes the property as a whole and the owners have the right to the entire property. Undivided interests can be characterized as a joint tenancy, where two or more individuals each own a partial and equal right to an entire property. (Civ. Code, § 683.)
The Four Unities
Joint tenancies are purchased, as the name implies, jointly and must satisfy the four unities. These are 1) unity of interest, 2) unity of time, 3) unity of title, and 4) unity of possession. (Tenhet v. Boswell (1976) 18 Cal.3d 150, 155.)
The unity of interest refers to the share of each owner, which must be equal. In being equal, the interests must be the same type and must run for the same duration. If one owner has a larger or smaller share of the property, the unity of interest is broken.
Unity of time relates to when the owners acquired their interests. The owners must acquire their interests at the same time, or there is no unity of time.
Unity of title means that the interest held by each owner must originate from the same instrument, i.e., title. If the share of either owner stems from a different instrument, there is no unity of title.
The unity of possession refers to each owner’s right to possess the whole property. Any agreement where a share of the property does not allow an owner the right to possess a portion of the whole property breaks the union of possession.
If any one of the four unities is broken, a joint tenancy becomes a tenancy in common. (Swartzbaugh v. Sampson (1936) 11 Cal.App.2d 451, 454.) The uniqueness of the four unities allows an owner to unilaterally, or individually, terminate the joint tenancy by conveying their share to another person. (Tenhet v. Boswell (1976) 18 Cal.3d 150, 155.)
Right of Survivorship
Joint tenancies are specific because they allow what is called the “right of survivorship.” The right of survivorship means that when one owner passes away, the surviving owners automatically receive that person’s share of the property. However, just because a joint tenancy provides a right of survivorship does not mean that it lasts forever. The ability for survivors to retain shares is dependent on the duration of the joint tenancy. If one of the four unities is broken, the joint tenancy is broken, and the right of survivorship is lost. (Gwinn v. Commissioner of Internal Revenue, (1932) 287 U.S. 224, 229.)
Without any of the four unities, an undivided interest can become a divided interest.
Divided interests, also known as a tenancy in common, exist where two or more individuals own property together with separate and distinct shares. (Civ. Code § 686.) Each owner has the right to sell, transfer, or mortgage their property without input from the other owners. When one of the owners dies, their heirs or beneficiaries receive the owner’s share of the property, or it goes through intestate succession. The share of the deceased owner does not automatically transfer to the other owners, unlike the shares of an undivided interest.
If an undivided interest or joint tenancy is sold or transferred and it is not explicitly stated in the sale and transfer contracts that it will be a joint tenancy, then the undivided interest is then considered a tenancy in common. (Estate of Horn (1951) 102 Cal. App. 2d 635, 640.)
For example, a condominium is a common type of property when referring to divided co-ownership. Each unit and private area have its respective owner and its own lot number. The ownership of common spaces is divided among the owners according to a percentage established in the creating act of co-ownership. The lot, elevators, stairwells, outside walls, roof, pool, weight room and other building amenities are all examples of common areas.
In Partition Actions
Parties with interests in the same property have the right to partition. (Civ. Code § 872.710(b).) Whether you have an undivided or divided interest, you have a complete right to have your interest separated from that of the other co-owners. (Lazzarevich v. Lazzarevich, (1952) 39 Cal. 2d 48, 50.)
Underwood Law Firm, P.C. Can Help
At Underwood Law, our specialized attorneys are here to help. If you are worried about what steps to take in separating co-owned property, please do not hesitate to contact our office.