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In a scenario where two non-married, but related people, establish a joint tenancy with regard to ownership of real property without legal representation, can heirs challenge the validity of said joint tenancy, and thus the right of survivorship, by providing evidence that the decedent acquired >99% of the real property's interest with an intent to hold it as sole and separate property (potentially relevant for the four unities)?

From an evidentiary standpoint, the case would not be based on a written last will and testament, i.e. intestacy, but on non-will ledgers, third party banking transactions, and letters of evidence that show the decedent undertook full responsibility for expenses related to the acquisition and maintenance of the property. The joint tenant was involved in the deed and mortgage issuance by the decedent for the sole purpose of mortgage qualification (i.e. credit requirements).

In California, the relevant case law seems to be Kershman v Kershman, Milian v DeLeon, and Cosler v Norwood, but this is such a peculiar situation that it's difficult to find case law precedent.

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    When you say "the decedent's estate acquired...", do you mean property they acquired when they were alive, or acquired by an administrator during (e.g.) probate? I'm only asking as "Estate" usually refers to assets after death.
    – Rick
    Nov 11 at 9:40
  • The question is murky without more info. Who died, one of the joint tenants I presume? What does “establish joint tenancy” mean? Did they share an apartment, buy a house together, or did the decedent buy a house and ask the other relative to move in? Is there a will naming the other heirs, but presumably not the related roommate? (Sometimes “meet Bob” is useful to establish a common English understanding of the scenario…) Nov 11 at 15:06
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    @Jen Not necessarily as there's a question mark over whether there was a JT or they were TiC, hence my request for clarification of a term with a (nearly exclusively) specific meaning that directly affects intestacy.
    – Rick
    Nov 11 at 16:01
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    If you're implying that the decedent generally paid the mortgage, property taxes, upkeep, etc., I don't think that's enough to break the joint tenancy.
    – mkennedy
    Nov 11 at 17:03
  • @Rick i modified 'the decedent's estate' for the sake of simplicity, but in the case where the decedent's assets continue to generate revenue or accrue income, it seems like it would be relevant. In this case, we can assume that the decedent is no longer earning income from the property in question.
    – goldenguy
    Nov 11 at 22:06

1 Answer 1

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Normally, a recorded deed is taken at face value.

If Bob acquires a house and conveys the house to Bob and Clark, his cousin, a joint tenants with right of survivorship, or pays for 99% of the price of a house and directs that it will be deeded to Bob and Clark as joint tenants with right of survivorship, the normal interpretation of that transaction is that Bob made a gift of an undivided one half interest in the property with right of survivorship to Clark.

It sounds like the fact pattern is that Bob dies before Clark, giving Clark 100% title of record to the house subject to the mortgage, and Bob's heirs are not cool about that fact and would like to escape that consequence. This is a tall order for Bob's heirs.

Normally, at least two important rules of evidence will preclude admission of testimony to the contrary.

One is the parole evidence rule. This excludes as a matter of law evidence of discussions entered into prior to execution of an unambiguous written instrument that is not on its face incomplete, even if other evidence, called "extrinsic evidence" is available.

The other is the dead man's statute, which is quite tricky in its technical application, but is basically designed to prevent an interested party from offering self-serving testimony that economically benefits them about what a deceased person said. The classic examples would be "I'll sell you these gold bars for $10", or "I'm giving you this painting", or "I agree to let you live in my house after I die rent free for 11 months." A statement regarding an intended ownership interest in joint tenancy with right of survivorship real estate asserting that it is not 50-50 when nothing on the face of the deed suggests that this is case might be barred by the dead man's statute since these are statements of a dead man that favor the person offering the evidence. But, as I say, the application of the rule is quite technical.

Also, to the extent that any third-party like a lender or a judgment creditor of the surviving joint tenant gets a lien or other property right in the property that is recorded, and that person had no knowledge of the claims of ownership outside real property records of the relative rights of the joint tenants, that evidence couldn't be used to impair or reduce the third-party's rights in the property by virtue of the recording statutes.

If a dispute arose while the co-owners were alive at a time when there were no disputed claims of third-parties to the property, the joint tenancy would be easy to severed into a tenancy-in-common, and the actual relative contributions and right of the parties could be litigated in court with the testimony of those parties.

But, usually, the four unities are in practice, a consequence of a joint tenancy with right of survivorship deed being prepared and recorded, rather than primarily being a condition precedent to it. If a single deed is executed that says that grantee are two or more people who are described as joint tenants with right of survivorship, then the legal consequence of that deed is that the co-owners become equal owners with a right of survivorship and unlimited right to possession of the whole.

Also, even though it isn't standard, it isn't impossible for property to be in a tenancy-in-common which a side agreement to make a transfer upon death to the remaining tenant-in-common, even if it isn't a true joint tenancy with right of survivorship.

So, if one proved by some competent and admissible evidence that a 50-50 ownership was not intended and that it wasn't a true canonical joint tenancy, this wouldn't necessarily invalidate the survivorship provisions on the face of the deed.

A judge would be more likely to treat the deed as a non-standard non-probate transfer at death than to treat it as a tenancy-in-common without a right of survivorship, despite language of survivorship on the face of the recorded deed.

Now, something other than equal co-ownership might be admissible for some purposes, like tax consequences, but that wouldn't go to who gets the property when a co-owner of the property dies.

From an evidentiary standpoint, the case would [be based upon] . . . non-will ledgers, third party banking transactions, and letters of evidence that show the decedent undertook full responsibility for expenses related to the acquisition and maintenance of the property. The joint tenant was involved in the deed and mortgage issuance by the decedent for the sole purpose of mortgage qualification (i.e. credit requirements)

This doesn't sound very convincing.

First, there is nothing inconsistent with a joint tenancy with right of survivorship with one co-owner being the person who provides the funds for purchasing the home and handling all of the maintenance and expenses. This is more common than not in the case of a married couple or pair of unmarried domestic partners that own the real property as joint tenants with right of survivorship and it used to be even more common.

Second, a lender would almost always require that all people obligated on the mortgage be owners of the property, and that all owners of the property be obligated on the mortgage. (Strictly speaking, in California, it would probably be a deed of trust rather than a mortgage, but that is functionally equivalent.) But, it wouldn't be very common as a commercial requirement to insist on joint tenancy with right of survivorship as opposed to tenancy-in-common ownership.

Also since providing credit to a transaction is something of value, getting an ownership interest in the property in exchange isn't beyond the realm on possibility and plausibility in a deal that isn't entirely arms length but isn't entire a gift either. Providing credit is probably sufficient consideration to support the deal as a binding contractual agreement.

Now, the best strategy might be a letter or exchange of letters that amount to an agreement. This wouldn't bind the mortgage company, but might have some relevant. Still, if the letters predate the execution of the joint tenancy deed, the parole evidence rule might keep the letters out of evidence.

Some sort of express trust theory, treating the letters as a trust agreement, might if the language was right, be a stronger legal argument.

I'm trying to wrap my head around how a court would interpret documentation vs. intent with regard to the joint tenancy ownership of real property. The key point being that the decedent didn't 'generally' pay for the property, but always paid for it.

This is almost completely irrelevant. It is consistent with the alternative characterization of the transaction, but it is also consistent with the deed terms.

In particular, if the decedent described the remaining joint tenant as a 'renter' during an interval of co-habitation, and no financial transactions between the two took place subsequent to that.

I could imagine bringing a legal action to reform the deed, but the threshold of proof to win that action is pretty high. Absent some sort on undue influence or abuse of a confidential relationship, I have a hard time seeing a deed like this being reformed by a court to reflect a different kind of transaction, even if that was the original intent of the parties, but it isn't impossible if the right facts and evidence were available (which the dead man's statute, again, heavily constrains).

If Bob was defrauded by Clark, I could also imagine some sort of legal remedy being available. But it is hard to think that Bob who was the primary mover in the deal would have been defrauded by Clark in this fact pattern.

In California, the relevant case law seems to be Kershman v Kershman, Milian v DeLeon, and Cosler v Norwood

Kershman v. Kershman is not on point. It is a divorce case dealing with the issues of marital v. separate property under California's community property regime which is an entirely different body of law that doesn't apply to unmarried co-owners of property.

Milian v. De Leon is more on point, involving unmarried people with unequal contributions to the property who take title by a deed that says joint tenancy.

it found that, “once the court in a partition action has determined that a true joint tenancy exists, it may not order reimbursement or contribution on account of differences in the amounts the parties have paid toward the initial acquisition of the property.” Milian v. De Leon (1986) 181 Cal.App.3d 1185, 1195.

(Source)

This holding is the standard common law rule. It isn't isn't really relevant here, however, because that case applies in the context of a partition action while the co-owners are alive, and not after death when the survivorship feature causes the surviving co-owner to be sole owner by operation of law.

Cosler v. Norwood is a much older case, from 1950, and seems to stand for the proposition that the language of the deed regarding equal ownership that flows from calling the co-owners joint tenants can be overcome by extrinsic evidence in the context of a partition action, although it is arguably implicitly repealed by Milian v. De Leon. But it isn't on point for the same reason that Milian v. DeLeon in not on point - it considers the rights of two living parties in a partition action dispute (i.e. a lawsuit to untangle co-ownership of property), not concerning the validity of a survivorship provision in the deed in the presence of unequal contributions to the acquisition price. Changes to the survivorship rights do not obviously at all flow from the existence of unequal contributions.

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  • I like the clarity with which you covered several topics, but there are holes you've papered over as a result of my provision of incomplete information: the initial question carries the assumption that, in CA, a properly filed joint tenancy deed implies the right of survivorship. Your explanation of joint tenancy with the right of survivorship seems to be based on the document itself stating 'right of survivorship.' That is not the case.
    – goldenguy
    Nov 12 at 7:25
  • The dead man's statute is the reason I referenced documented evidence as opposed to hearsay, e.g., testamentary statements from the decedent, to all heirs (incl. the joint tenant), stating intent to distribute the property among heirs. Unfortunately, intestacy and the joint tenant's unwillingness to abide by the decedent's wishes has brought about the situation. It's not about 'being cool with consequences' as much as defiance of a dying person's wishes, because, by obstructing title changes, the law favors an unscrupulous heir uninterested in a property until the decedent's passing.
    – goldenguy
    Nov 12 at 7:36

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