Concurrent or Common Ownership

Texas Supreme Court interprets life estate as a fee simple because the remainders were subject to divestment

/ Concurrent or Common Ownership, Estates and Future Interests, Real Estate Transactions, Wills and Inheritance

In Jordan v. Parker, 2022 WL 17998227 (Tex. Dec. 30, 2022), the Texas Supreme Court held that a conveyance of a life estate actually conveyed a fee simple since the remainders were subject to alteration or even complete divestment by the life estate owner. In this case, a man devised his entire estate to his widow for life with remainders in their children, but the devise gave the widow complete power to transfer both the life estate property and to redirect ownership of the remainders. Part of the estate was a fractional ownership interest in a ranch. Some years later, while the widow was still alive, a son who was a remainder owner conveyed his remainder interest to his daughters (the granddaughters of the widow and the testator). The widow never exercised her power to alter the remainders in her children during her lifetime, and the question was whether the widow …

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Homeowners Association architecture regulations must be reasonable and authorized by governing documents

/ Concurrent or Common Ownership, Condominiums and Homeowners Associations

The Nevada Supreme Court adopted §6.7 and §6.9 of the Restatement (Third) of Property (Servitudes) and held that restrictions on construction (including architectural review committees) are only valid if owners are on notice of them and they exercise their powers “reasonably.” Moretto Trustee of the Jerome F. Moretto 2006 Trust, v. ELK Point Country Club Homeowners Ass’n, Inc., 507 P.3d 199 (Nev. 2022). Those sections state that no homeowners association has implied power to regulate the architecture of individual units unless the governing documents (the declaration that establishes the association) explicitly confers that power on the association, and even then, the exercise of that power must be reasonable. In this case, the governing bylaws required owners to get board approval before building any structure on their property. After purchasing a lot subject to the bylaws, the executive board created an architectural review committee and some architectural guidelines. One of the owners …

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Restraint on partition or conversion of joint tenancy interest to tenancy in common is an invalid restraint on alienation

/ Concurrent or Common Ownership

A deed prohibiting joint tenants from suing for partition or converting their joint tenancy interest into a tenancy in common without the consent of the other owners was an invalid restraint on alienation and unenforceable. Mindock v DuMars, 2022 WL 1410017, 2022 US App LEXIS 12044 (10th Cir 2022). The court did not accept the argument that the restraint was reasonable as a means to keep ownership of the home in the family when the joint tenants were all the grandchildren of the grantor.

Short-term rentals do not violate “residential use only” covenant

/ Concurrent or Common Ownership, Condominiums and Homeowners Associations, Leaseholds, Real Estate Transactions, Servitudes

The Mississippi Supreme Court has held that short term rental of property is not a commercial use that would violate a covenant limiting land to residential purposes. Lake Serene Prop. Owners Ass’n v. Esplin, 334 So.3d 1139 (Miss. 2022). There has been some disagreement among state courts on this question because the use of property as an Airbnb or other short term rental can be viewed as changing property to “hotel” use, at least when the owner does not share occupancy with the guest.

Physical partition denied when the sale value significantly exceeds the value of the separate parcels despite a co-owners attachments to the land

/ Concurrent or Common Ownership

The Nebraska Supreme Court held that partition by sale is preferred to physical partition if the fair market value of the land as a whole exceeds the market value of separate parcels even if a co-owner objects to the sale because of sentimental attachments to the land. FTR Farms, Inc. v. Rist Farms, Inc., 942 N.W.2d 204 (Neb. 2020). A somewhat similar case came out the opposite way in Ark Land Co. v. Harper, 599 S.E.2d 754 (W.Va. 2004)

Proceeds of partition by sale divided according to ownership interests without any credit given to co-owner whose funds were used to buy the property

/ Concurrent or Common Ownership, Estates and Future Interests, Real Estate Transactions

Because the Texas partition statute requires the proceeds of a partition sale to be divided “according to [the owners’] just rights therein,” joint tenants were entitled to 50% of the sale proceeds even though one of the co-owners had used his own funds to purchase the property. Gallagher v. Townsend, 443 P.3d 847 (Wyo. 2019). At the same time, the court would be entitled to adjust the amounts each party received to reflect the fact that one co-owner had paid more of the property taxes.

Will devising home to testator’s four children and his widow that allowed her to “remain” in the home “for as long as she desires” gave her a tenancy in common interest with protection from removal by partition

/ Concurrent or Common Ownership, Restraints on Alienation, Wills and Inheritance

In an older case that came to my attention, the Massachusetts Supreme Judicial Court held that a will that gave a widow the right to “remain” in the home “for as long as she desires” did not create a life estate when her interest was shared with the decedent’s four children. Hershman-Tcherepnin v. Tcherepnin, 891 N.E.2d 194 (Mass. 2008). Rather, the court interpreted the conveyance to create tenancy in common interests shared equally by the five while giving the widow immunity from being forced from the house by partition. Significantly, the court did not consider that restraint on partition to constitute an unreasonable restraint on alienation. However, since she had brought an action to partition the property, she waived the right to be protected from ouster through partition sale.

Tenancy by the entirety interests can be sold to satisfy debts of one spouse

/ Concurrent or Common Ownership, Marital Property

A bankruptcy court in Massachusetts has ruled that state tenancy by the entirety law is preempted by  the Bankruptcy Code, §363(h)–(j), interpreting federal law to authorize the forced sale of tenancy by the entirety property over the objections of the non-debtor spouse to satisfy the debts of the debtor spouse. Desmond v. Green, 2018 Bankr. LEXIS 3136 (Bankr. D. Mass. 2018).

Seventh Circuit holds that the Fair Housing Act prohibits discrimination based on sexual orientation

/ Antidiscrimination Law, Concurrent or Common Ownership, Fair Housing Act, Gender Identity, Sexual Orientation

Extending a former precedent concerning employment discrimination, Hively v. Ivy Tech Community College of Indiana, 853 F.3d 339 (7th Cir. 2017), a three judge panel of the Seventh Circuit has held that discrimination based on sexual orientation in housing is a form of sex discrimination prohibited by the Fair Housing Act. Wetzel v. Glen St. Andrew Living Community, LLC, 2018 U.S. App. LEXIS 24193 (7th Cir. 2018). The case involves a continuing care retirement community which failed to protect one of its residents from harassment by other residents directed at her because she is a lesbian. The court held that a landlord is liable for tenant-on-tenant harassment when it has actual notice of it but chooses not to take any reasonable steps to stop that harassment. Harassment is outlawed if it is severe or pervasive and that is the case where the harassment objectively interferes with teh enjoyment of the premises …

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