<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by Kingsley:
If two people jointly own property (both on mortgage note - not blood related/not married), and one dies, does the survivor assume complete responsibility for the mortgage debt or does the estate(or spouse if married)of the deceased assume his/her half. If the estate does, how are the payments worked out - lump sum of half the balance paided at once to the lender?<HR></BLOCKQUOTE>
My response:
You didn't mention the State where the property is located, and laws differ from State to State in these matters. Also, you didn't mention how the Deed to the property was recorded. So, I will discuss, generally, the various types of property ownership, and the basics behind them, and how each is dealt with at the time of death. These are general rules and laws, and you should check with an attorney in your own State.
With that caveat in mind, as between married persons, residential property is commonly co-owned by husband and wife as community property or joint tenants. However, there is also a growing trend of residential property acquisitions jointly by unmarried individuals--e.g., nonmarital cohabitants purchasing a house in joint tenancy (or as tenants in common), neighbors buying a multiunit house or small apartment building, or friends combining to purchase a vacation home.
There are four fundamental types of co-ownership:
· Joint interests;
· Partnership interests (Not discussed hereinafter);
· Interests in common; or
· Community property (in the case of husband and wife co-owners).
A joint tenancy is created when two or more persons acquire property in equal shares by the same conveyance and at the same time, with identical possessory rights, pursuant to an instrument of transfer that expressly declares the co-ownership to be a joint tenancy. Joint tenancies are primarily distinguishable from tenancies in common and partnership interests in that the joint tenants own equal interests in the property, all of which are subject to the right of survivorship; i.e., upon any joint tenant's death, his or her interest passes by operation of law to the surviving joint tenant(s). (Spouses also hold equal ownership interests in community property; but community property carries no right of survivorship.)
However, a joint tenancy may be severed (as to all joint tenants or as to any single joint tenant's interest) by agreement of the parties, by written declaration or by conveyance (with or without the other joint tenants' joinder or consent). A severance extinguishes the right of survivorship feature.
With regard to Tenancies in Common, this is a co-ownership that is not in the form of joint tenancy title, community property or a partnership is a tenancy in common. A tenancy in common is deemed created whenever the conveyancing instrument does not specify how title among the several co-owners is taken (except when the acquisition is by husband and wife during marriage, in which case the spouses presumptively take their interests as community property). Tenants in common own separate legal title to their undivided interests in the property; unlike joint tenants, their interests are not necessarily equal and are not subject to a right of survivorship. Any single co-owner may sell, transfer or encumber his or her undivided interest as he or she pleases, and the transferee takes his or her title as a tenant in common with the other co-owners. However, like joint tenants, unless the tenants in common otherwise agree, each has equal rights to possession of the property and, therefore, no one tenant in common has a right to exclude another tenant in common from use or occupancy of the property or a right to require another tenant in common to pay rent for use of the property - - tenancy in common "merely requires . . . equal right of possession or unity of possession. Tenants in common (like joint tenants) stand in a fiduciary relationship to each other, except where the "cotenants acquire their interests at different times through different instruments . . . - - there being no relationship of trust and confidence between strangers, it would be an elevation of form over substance to hold that a fiduciary relationship exists between (them) merely because they have acquired interest in the same piece of property.
With regard to Community Property, a spouse's acquisitions during marriage (whether real or personal property and no matter where situated) are presumptively community property unless traceable to a separate property source. It goes without saying that joint acquisitions by husband and wife are presumptively taken as community property, unless otherwise shown in the instrument of title - - marital acquisitions in "joint form" are presumptively community property for purposes of a property division upon marriage dissolution or legal separation. However, spouses may, by written declaration between them, "transmute" their community property to separate property interests - husband and wife may hold property as joint tenants or tenants in common, or as community propert.
The distinguishing features of Community property are that spouses own "present, existing and equal" interests in their community property; i.e., each spouse has a 50% ownership interest in the property, with equal rights of management and control, but subject to several intraspousal fiduciary obligations. Each spouse has complete rights of testamentary disposition over his or her community property interest. But unlike tenants in common, neither spouse may unilaterally transfer or encumber his or her community property interest during the marriage; indeed, such an unauthorized disposition will be voidable by the nonconsenting spouse.
Good luck.
IAAL
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