Definition of concurrent estate
A concurrent estate or co-tenancy is a concept in property law which describes the various ways in which property is owned by more than one person at a time. If more than one person own the same property, they are referred to as co-owners, co-tenants or joint tenants. Most common law jurisdictions recognize tenancies in common and joint tenancies, and some also recognize tenancies by the entirety. Many jurisdictions refer to a joint tenancy as a joint tenancy with right of survivorship, and a few U.S. States treat the phrase joint tenancy as synonymous with a tenancy in common.
The type of ownership determines the rights of the parties to sell their interest in the property to others, to will the property to their devisees, or to sever their joint ownership of the property. Just as each of these affords a different set of rights and responsibilities to the co-owners of property, each requires a different set of conditions in order to exist.
Law can vary from place to place, and the following general discussion will not be applicable in its entirety to all jurisdictions.
Rights and duties of co-owners (general)
Under the common law, Co-owners share a number of rights by default:
- Each owner has an unrestricted right of access to the property. When one co-owner wrongfully excludes another from using the shared property, the excluded co-owner can bring a cause of action for ouster. As a remedy, the court may grant the wronged co-owner the fair rental value of the property for the time that they were ousted.
- Each owner has a right to an accounting of profits made from the property. If the property generates any income (e.g. rent, farming, etc. . . .) each owner is entitled to a pro rata share of that income.
- Each owner has a right of contribution for the costs of owning the property. Co-owners can be forced to contribute to the payment of expenses such as property taxes, mortgages for the entire property.
Contribution and improvements
Co-owners generally do not have any obligation to contribute to any costs of repairing or improving the property. If one co-owner adds a feature that enhances the value of the property, that co-owner has no right to demand that any others share the cost of adding that feature - even if other co-owners reap greater profits from the property because of it. However, at partition, a co-owner is entitled to recover the value added by his or her improvements of the property if the "improvements" resulted in an increase in property value. Conversely, if the co-owner's "improvements" decrease the value of the property, the co-owner is responsible for the decrease. In an Australian case, the High Court said that the costs of repairing by one co-owner must be taken into account on the partition or final distribution (i.e. sale) of the property.
Furthermore, each co-owner can independently encumber the co-owner's own share in the property by taking out a mortgage on that share (although this may effectively convert a joint tenancy to a tenancy in common); other co-owners have no obligation to help pay a mortgage that only runs to another owner's share of the property, and the mortgagee can only foreclose on that mortgagor's share. Bank loans secured by mortgages on individual shares of co-owned property are one of the most rapidly expanding areas in the mortgage lending industry.
Finally, co-owners owe one another a duty of fair dealing. Because of this, any co-owner who acquires a mortgage claim against the property must give his co-owners a reasonable opportunity to purchase proportionate shares in that claim.
- Wiktionary. Published under the Creative Commons Attribution/Share-Alike License.