To determine who has what interest in Greenacre (G), the validity and effect of each transfer/agreement must be determined. Generally, property may be transferred by sale, gift, will, or intestate succession. Leases may also create interests in possession of property.
First, it must be determined what interest Oscar (O) had in the property. A fee simple is the largest property interest possible and O began with a fee simple interest in G.
A fee simple defeasible is a fee simple interest that may be cut short by a subsequent event. When a fee simple defeasible contains terms of duration (e.g. as long as, for the time that, until, etc.), it is a fee simple determinable. A fee simple determinable will be a fee simple until a designated event occurs. Here, O's conveyance to Martha (M) and Lenny (L) was likely a fee simple determinable because it contained the phrase "for so long as." Thus, this conveyance conveyed a fee simple determinable interest to M and L.
The grantor of a fee simple determinable interest retains a possibility of reverter. Here, O's conveyance additionally contained explicit language that he retained a possibility of reverter. A possibility of reverter means that fee simple automatically reverts to the grantor at the time the designated event occurs. The grantor need not go to court to claim this interest; the interest automatically vests at the occurrence of the subsequent event. Here, O had a possibility of reverter. The event in question was if either M or L made any transfer of G. Thus, if his possibility of reverter was valid, O gained a fee simple interest in G at the time M transferred her interest in G to Paul (P). Restraints on Alienation
However, the possibility of reverter here may not be valid because it may be an undue restraint on alienation. Generally, courts do not allow title instruments/conveyances that absolutely prohibit future transfer of the property. Restraints on alienation may be allowed if the restraint is only conditional/for a moderate time period (e.g. does not transfer for the next 50 years). However, absolute restraints on alienation are invalid. Any language indicating such absolute restraint will be struck from the instrument, so the resulting interests will remain. Here, the proposed restraint was absolute--O conveyed to M and L so long as neither transferred G. There was no condition or limited time period on this restraint; it was absolute. So, this clause will be struck from the instrument and the remaining interests will exist. With this clause struck, there is no future event that gives O a possibility of reverter. Rather, it changes M's and L's interests to fee simple interests and strips O of his possibility of reverter. Thus, because of the striking of the invalid restraint on interest, O conveyed G in fee simple to L and M and retains no interest in the property. So, O has no interest in G.
Lenny
As discussed above, because the alienation language had to be struck, L received a fee simple interest with M in G from O.
There are various forms of co-tenancies. Each form allows all co-tenants to possess the whole of the property, though each holds only a lesser, divided share of the property. A tenancy in common is the default form. A joint tenancy carries the additional right of survivorship between joint tenants. This right of survivorship means that when one joint tenant dies, the surviving joint tenant receives the deceased joint tenant's interest in the property automatically, and the deceased tenant's interest is no longer part of her estate and so cannot be passed through probate. A joint tenancy exists when property is conveyed by an instrument that indicates intent for the property to be held as a joint tenancy with a right of survivorship, and when the four unities of (1) possession, (2) interest, (3) time, and (4) title exist. Here, O conveyed G to M and L "as joint tenants with a right of survivorship." So, the explicit language indicating intent to convey as a joint tenancy and to convey a right of survivorship is present.
1. Possession
The unity of possession means that all joint tenants have equal right to possess the whole property. Here, although L and M (and P as M's successor) took various degrees of possession of G, there is no indication that any ousted the other at any time--i.e. no tenant ever prevented the other from taking possession of the whole property. Thus, there was unity of possession.
2. Interest
Unity of interest means that each joint tenant must have an equal share interest in the property--i.e., for two joint tenants, each must have a 50 percent interest rather than, e.g., one having a 40 percent and one a 60 percent interest. Here, it is not indicated what interest each L and M had in G, so presumably each was conveyed a 50 percent interest in G. So, there was unity of interest.
3. Time
Unity of time means that each tenant must have acquired her interest in the property at the same time. Here, initially, both L and M acquired their interests in G at the same time--when O conveyed it to them. However, subsequently, M conveyed her interest to P. So, P acquired his interest in G at a different time than L (the remaining joint tenant), thus destroying the unity of time (discussed more below).
4. Title
Unity of title means that each tenant must have acquired her interest in the property by the same instrument. Here, as with the unity of time, L and M initially had unity of title because both originally acquired their interests in G by means of the grant from O. However, when M conveyed her interest in G to P, P then got title from M's conveyance while L still had title from O's conveyance. So the unity of title was also broken at that time.
Thus, while M and L originally were tenants in common because the four unities were present and the intentional joint tenancy and right of survivorship language was included in the relevant instrument, the joint tenancy ended when M conveyed her interest in G to P because this broke the unities of time and title.
When any of the unities for a joint tenancy are broken, the tenancy reverts to a tenancy in common. A tenancy in common is the default form. Under a tenancy in common, each co-tenant has equal right to possess the whole of the property, but only a lesser divided interest in the property. Under a tenancy in common, each tenant may devise her interest in the property or it will pass through intestate succession because a tenancy in common has no right of survivorship.
Here, because the unities of time and title were broken when M conveyed her interest in G to P, the tenancy reverted to a tenancy in common. So, at that point, L and P held G as tenants in common with no right to survivorship. However, each's interests in the property (i.e. 50 percent share) was not affected.
So, at the time of the action, L held a 50 percent interest in G as a tenant in common.
Paul
Next, it must be decided what interest P had.
P obtained his interest in G by an inter vivos transfer from M. It must be determined that this interest is valid. First, the provision in the conveyance from O that the property was conveyed to M and L so long as neither transferred it could prohibit the transfer. However, as discussed above, that provision of O's conveyance was an invalid absolute restraint on alienation, so must be struck from the instrument. Thus, M was not restrained from transferring by means of O's clause in his conveyance. Second, the nature of a joint tenancy may prevent M from transferring her interest. Generally a joint tenant may transfer her interest in the property without the consent of her joint tenants. The effect of the transfer is that it converts the joint tenancy to a tenancy in common, but permission is not required to make the transfer. By contrast, a tenancy by the entirety--which is a joint tenancy held by married spouses--requires that property interest cannot be transferred without consent of the other tenant-by-the-entirety. Here, there is no indication that M and L were married to each other, so no indication that this was a tenancy by the entirety rather than a joint tenancy. So, as a joint tenancy, M was not required to obtain L's permission to transfer to P. Third, as a transfer of interest in real property, the Statute of Frauds would ordinarily require that the conveyance be in writing. Here, it is not clear whether the conveyance was in writing, but the Statute of Frauds may nonetheless be satisfied by part performance if P did two of the three: took possession of the property, made payment for the property, or made improvements on the property. So, M's transfer to P was likely valid.
As discussed above, thus, P holds a 50 percent interest in G as a tenant in common with L.
However, P has also entered a lease with Sally (S) that may affect his interests. There are three kinds of landlord-tenant leases--(1) tenancy for years, which is a lease for a definite period of time; (2) periodic tenancy, which is a lease for a definite period (e.g. one month) that automatically renews at the end of each period; or (3) tenancy at sufferance, which is a tenancy caused by the holdover of property by the tenant after a lease has ended. Generally, rental leases need not be in writing unless they are a lease for years for greater than a 1-year term (because the Statute of Frauds requires a writing for any contract that cannot be performed within one year). Here, the initial rental agreement was for 2 years, but was in writing. P initially rented G to S as a tenancy for years with a fixed two-year term. A tenancy for years automatically terminates at the end of the fixed period. So, here, this tenancy terminated at the end of two years.
A periodic tenancy is created by implication if a tenant pays rent and the landlord accepts it each period. Typically, a periodic tenancy is created at the end of a tenancy for years when the tenant pays rent and the landlord accepts. However, here, S stopped paying rent at the end of the two-year lease, but remained on G as a holdover. So, at that time, a Tenancy at Sufferance was created. However, when S subsequently paid P for those three months and resumed paying monthly rents, a periodic tenancy was created if P accepted those rents. There is no information to the contrary, so P presumably accepted those rents.
Thus, at the time of the action, P owned a 50 percent interest in G as a tenant in common, but leased possession of G to S as a periodic tenancy.
Sally
S's interest in G is only that granted her by her lease with P. Because P, as a tenant in common, has a right to possess the whole property, he may lease the whole property to a tenant. Further, as discussed above, at the time of the action, S and P had a periodic tenancy by implication. Thus, S has an interest in possessing the whole of G (but no ownership interest) as a periodic tenancy.
Martha's Estate
Finally, as discussed above, M's inter vivos transfer to P was valid. Thus, that property was no longer in M's estate at the time she died. So, M's estate has no interest in G.
2. Likelihood Lenny Can Obtain an Accounting and Contribution from Paul Next, it must be determined whether L can obtain an accounting and contribution from P, his tenant in common.
Rights to Third-Party Rents
Generally, tenants in common each have a right to possess the whole property. So, one tenant may not demand rent from her co-tenant because the co-tenant possesses the whole of the property exclusively. However, co-tenants may demand accounting for rents received from third parties. Here, P, a co-tenant, rented G to a S, a third party, and received rents from S. So, L may demand an accounting for the rents received from S in proportion to his interest in the property. Here, L had a 50 percent interest in G, so may demand 50 percent of the rents received from S.
Contribution for Operating Expenses
Generally, tenants in common are not entitled to contribution from other co-tenants for costs expended to repair or improve the property. However, they are entitled to contribution for basic operating expenses--which include property taxes. Here, L paid all property taxes on G after M died. Because property taxes are operating expenses, L is entitled to demand contribution from P for his share (proportionate to his interest in the property). Here, P had a 50 percent interest in G, so L may demand that P pay him contribution for 50 percent of the property taxes.