SMITH LAW, P.A.
49 Pleasant Street
Brunswick, Maine 04011
CO-OWNERSHIP OF REAL ESTATE
(as of 2/28/2017)
Owning real estate with others as joint tenants or tenants in common is the default form of
co-ownership, and although easy and inexpensive it is fraught with problems if disagreements
among co-owners arise. Although it is fairly typical and usually appropriate for spouses to own
property as joint tenants, co-ownership among non-spouses (even family members) is often not a
good idea. It is important to understand the difference between the two common forms of
ownership. Fundamentally the difference relates to what happens upon the death of a co-owner.
When a joint tenancy owner dies, his or her interest passes to the surviving owners irrespective of
the terms of the decedent’s will or estate plan. In contrast, when a tenants-in-common owner dies,
his or her interest passes pursuant to the terms of his or her will or estate plan.
The limited rules that do exist governing joint tenancy and tenants-in-common ownership
of real estate are summarized below. Most of these rules arise from common law–which is another
way to say court cases. It’s not always clear as to what the actual rules are since court decisions
are often strictly aligned with the facts of the underlying case. The striking thing about co-
ownership of real estate is that there are very few rules governing the co-owners. Indeed, the only
real remedy for disagreement among co-owners is to go to court. The law provides a remedy of
partition to any cotenant who wishes to force the sale or division of the property, and the remedy
is available to any cotenant at any time. Partition actions are expensive, drawn out and emotionally
draining for all parties involved. This office touts the use of real estate management vehicles (such
as LLCs or real estate trusts) to eliminate the threat of partition and other disadvantages inherent
in co-ownership of real estate. In effect, transferring your property into an entity allows you to
create a set of rules and governing structure for the ownership of property. LLCs are the favored
vehicle for holding family and commercial real estate and providing a structure for succession and
management. If you are interested in exploring this further, we are happy to discuss and provide
more materials if requested.
Here is a bullet-point summary of the basic rules of co-ownership under Maine law.
Possession. Each cotenant may possess and use all portions of the property but has no right to
exclusive possession of any portion of the property. This is not a very palatable way to own
property. Essentially, you all either agree unanimously as to how to allocate use of the property
or you go to court. There is no majority rule in co-ownership. In other words, if you own a
75% interest in the property as tenants in common, you cannot outvote the 25% co-owner.
Moreover, you have no right to use the property 75% of the time absent an agreement or court
order to that effect.
Necessary expenses v. Improvements. Typically, a cotenant who pays more than his or her pro
rata share of necessary expenses (e.g. taxes, mortgage payments, necessary repairs) is entitled
to pro rata contributions from other cotenants. In contrast, a cotenant is not entitled to pro rata
contributions from other cotenants for the cost of improvements to the property unless there is
an action for partition. In a partition action, courts generally award the cotenant who made the
improvements the resulting increase in the value of the estate, and not the actual cost of the
