THE RESULT
After a hearing held over two days in the Circuit Court for Baltimore City, Adam M. Spence and Elizabeth Johnson obtained a judgment in favor of four Estates against a claimant who sought over $129,000 for his costs and expenses in maintaining properties co-owned by him and the Estates. Read on to see how a Maryland co-owner (a tenant in common) has a right of reimbursement or contribution from other co-owners for expenses.
THE UNDERLYING FACTS AND THE CO-OWNED PROPERTIES
For over a century, a family in Baltimore ran a local tavern and owned several properties related to it. When Mom and Dad passed away, their five children inherited it. By the mid-2010s, four of the five children — all siblings, — had also passed away, leaving their surviving brother and children.
In his eighties, the surviving brother had grown up in the tavern and served food and drink to his friends and neighbors for most of his adult life. Through time, however, the tavern had become run down and business slowed considerably. By 2011, the tavern was unable to cover its expenses, which were in excess of its income.
It was time to sell the Tavern. The Personal Representatives of the four Estates wanted to sell the properties since 2010. The surviving brother, however, refused and stood in their way at every turn. The brother’s actions (and inactions) prevented the sale of the Tavern properties for nearly a decade.
THE LAW OF CONTRIBUTION BY CO-TENANTS
Each of the five owners of the Tavern properties is a “tenant-in-common,” an ownership status. (This is not to be confused with a landlord-tenant relationship). Perhaps surprisingly, each tenant-in-common has a right to full use and occupancy of the entire property. In turn, all of the tenants-in-common have a responsibility for their “fair share” of the costs of upkeep, repair, utilities, and taxes. If one tenant-in-common pays more than his “fair share,” that person can seek reimbursement — a right of “contribution,” — from the other owners.
That is, a tenant in common has a right of reimbursement or contribution from other co-owners for expenses. Often this contribution or reimbursement to a tenant in common occurs after the property is sold before any proceeds are distributed.
However, a tenant-in-common’s right to contribution is not absolute. As tenants-in-common, each owner has an equal right to use and possess the entire property. One owner cannot prevent another from the use and enjoyment of the property. Thus, when one tenant-in-common prevents another owner from use and enjoyment, they have “ousted” the other owners. This might occur where one owner (i) refuses to provide keys or alarm codes to the others or (ii) acts in a hostile manner towards the other owners. Where one owner “ousts” the others, he has no right of contribution. Indeed, if there is an ouster, the other owners can seek rent from the owner in possession.
Similarly, if costs are incurred as a result of that owner’s refusal to sell a property when others want to sell it, that owner is deemed to have “obstructed.” Where one owner obstructs the others, he has no right of contribution.
THE TRIAL COURT’S DECISION
In our recent case, the Baltimore City Circuit Court Judge hearing the matter denied the brother’s claims for over $129,000 for several reasons.
First, we proved through testimony and documents that the brother “ousted” the other owners through his hostility and refusal to provide keys or alarm codes for nearly a decade. Second, we proved through testimony and documents that, despite repeated efforts by the other owners to sell the properties since 2010, the brother adamantly refused and “obstructed.”
Second, the Judge also found that the brother came to the Court with “unclean hands.” Although there were two separate agreements where the brother agreed to cooperate in the sale, the brother failed to cooperate. Indeed, the other owners had to file a “Petition for Sale in Lieu of Partition” lawsuit against the brother to finally force the sale of the property.
Finally, the Judge found that the brother’s claims were also waived by him under an earlier agreement.
THE TAKEAWAY
People can find themselves as co-tenants in many different scenarios. Some become co-tenants when their parents die, leaving their home to several children. Others become co-tenants when they purchase property with another person for a business. Other times, parents might purchase a house with their children. Even husbands and wives will become tenants-in-common upon divorce if their house was jointly titled.
In the cases we see, one of the co-owners is usually stuck paying for the cost and upkeep of the property because the others refuse to pay. This is one of the many reasons we generally recommend never holding title to property with someone else unless you are married. Take heart, however, as any costs a co-owner pays above the other owners can generally be reimbursed when the property is sold…. unless you obstruct or oust the other tenants, of course.
THE FIRM
Unlike many other law firms, the law firm of SPENCE | BRIERLEY is not afraid of trial. All of its attorneys are litigators who are prepared to try their cases if necessary. The firm can readily ramp up for a trial with its “all-hands” approach. Since its inception in 2003, the attorneys at SPENCE | BRIERLEY have tried hundreds of cases before juries and judges with considerable success. Its attorneys have developed a reputation for hard work and bull-dog aggressiveness, adeptly trying cases if their clients’ demands are not met. As but one of many examples, the firm recently obtained a $150,000 jury verdict in Howard County, Maryland.
SPENCE | BRIERLEY represents businesses and individuals in trust and estate disputes; will caveats; constructive trust cases; landlord-tenant matters; construction disputes; fraud; and business disputes.
For a general explanation of co-tenancies, you can read the articles here and here. Neither this post nor the article should be construed as legal advice. Get a good lawyer if you have a legal problem. We are good lawyers, very good lawyers. If you need an attorney, you should call us.