This is the fifth episode of our new video series covering the right of survivorship among co-owners.
The prior episode covers the creation of a joint tenancy and a joint tenant’s right of survivorship.
Community property presumption
On a dissolution of the marriage, all property acquired jointly by a married couple during the marriage, no matter how vested, is presumed to be community property for purposes of division.
Further, the community property presumption for married couples does not only come into play when a couple divorces. All property acquired by a couple or by either spouse during marriage is considered community property, unless the couple clearly states their contrary intention to own their individual interests in the real estate as separate property.
As community real estate, both spouses need to consent to a sale, a lease of more than one year or an encumbrance regardless of how it is vested.
If one spouse, without the consent of the other, sells, leases for more than one year or encumbers community real estate, the nonconsenting spouse may either ratify the transaction or have it set aside.
The nonconsenting spouse has one year from the recording of the nonconsented-to transaction to file an action to set aside the transaction.
Encumbering and leasing joint tenancy property
When real estate held in a joint tenancy vesting is separate property — as when the joint tenants are not a married couple, or when a married couple, in writing, agree their interests are separate property — each joint tenant can sell or encumber their interest in the real estate without the consent of the other joint tenant(s).
Additionally, when the joint tenancy in real estate represents separate property, a joint tenant may lease out the entire property since a lease is a transfer of possession, and each joint tenant has the right to possession of the entire property.
However, consider a married couple who owns community property real estate as joint tenants. One spouse enters into an agreement to lease the property for a term over one year, which the other spouse does not sign.
Under the joint tenancy rule, either joint tenant alone may lease the property. However, under the community property rule (which applies to property acquired during marriage), both spouses need to execute a long-term lease agreement with a term greater than one year.
Editor’s note – Stay tuned for further coverage on this topic.
