Bill Summary for S 217 (2023-2024)

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Summary date: 

Mar 8 2023

Bill Information:

View NCGA Bill Details2023-2024 Session
Senate Bill 217 (Public) Filed Tuesday, March 7, 2023
AN ACT TO CODIFY THE LAW OF TENANCY IN COMMON IN THIS STATE, AS RECOMMENDED BY THE NORTH CAROLINA BAR ASSOCIATION.
Intro. by Galey, Daniel, Overcash.

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Bill summary

Enacts new Article 7, pertaining to Tenancy in Common, of GS Chapter 41.

Sets forth definitions of actual ouster, constructive ouster, and conveyance. Describes a tenancy in common as having the following five characteristics: (1) two or more persons hold separate undivided interests in the property, (2) the interests of the tenants in common in the property may be equal or unequal percentages, (3) the tenants in common hold by several and distinct titles with each tenant in  common having a right to possession of the property, (4) the tenants in common need not take from the same instrument or at the same time, (5) the tenants in common do not have a right of survivorship. Directs that the interests are deemed to be equal unless otherwise specified in the instrument of conveyance. Specifies that the percentage of interests acquired by intestacy are determined under Chapter 29 of the General Statutes.

Makes clear that each tenant in common has a right to enter upon property and to occupy and use it subject to the rights of the cotenant(s). Directs that unless an actual ouster occurs, one cotenant cannot bring an action against another for taking possession of the property to which each has a right as a cotenant. Clarifies that an ousted cotenant may bring an action for ejectment, but not for partition, seeking to compel the cotenant in possession to admit the ousted tenant in common into possession. 

Creates rules for the creation of a tenancy in common as follows.  The conveyance must meet one of the following three criteria: (1) the conveyance is to two or more grantees and expresses an intent that the  grantees hold separate undivided interests in the property; (2) the conveyance is to one or more grantees and expresses an intent that the grantor and the grantee or grantees hold separate undivided interests in the property; (3) the conveyance does not express an intent described in prongs (1) or (2) and, with nothing else appearing, does not under the  circumstances create an estate in property other than a tenancy in common.  Identifies the following five terms contained in an instrument of conveyance that are to be deemed to express an intent to create a tenancy in common unless the instrument provides otherwise: (1) equal portions; (2) equally divided; (3) share and share alike; (4) share equally; (5) their respective portions.  

Sets forth rules for when an interest in property held by tenants in common who marry or when a tenancy in common interest is conveyed to parties who are married convert to a tenancy by the entirety or tenancy by the entirety with right of survivorship.  Specifies when a tenancy in common may be created by operation of law. 

Specifies that an act of a cotenant in relation to the property cannot bind a cotenant with respect to a third party unless it was previously authorized or subsequently ratified by the cotenant and is presumed to have been done by authority and for the benefit of the cotenant. Sets forth rules related to rents and profits from property and for reimbursement for a tenant in common from another cotenant.

Affirms the rights of cotenants to enter into agreements with respect to their property, including possession, sharing rents and profits, reimbursement related to the property, and the authority of a tenant in common to bind a cotenant.

Sets forth rules related to the following: (1) adverse possession of a cotenant’s interest in the property with or without color of title; (2) the acquisition of title to the property by one tenant in common; (3) the alienation of a tenant in common’s undivided interest in the property; (4) obligations amongst tenants in common, including when a fiduciary relationship is created; (5) action against a third party by a tenant in common.

Specifies that events terminating a tenancy in common include the following four events: (1) partition of the property under GS Chapter 46A, (2) voluntary partition of the property among tenants in common executing one or more instruments conveying the property held as tenants in common to themselves in separate tracts, (3) conveyance of all interests in the property to one owner, and (4) acquisition by one tenant in common of the ownership of the property by adverse possession. 

Directs that an interest of a tenant in common in the property may be sold as part of a proceeding of satisfaction of the cotenant’s debt to a creditor, but that it does not affect the title of any other cotenant’s interest in the property.

Clarifies that the Article does not apply to property in a general partnership covered by GS Chapter 59, an action for partition and its effect under GS Chapter 46A, or tenancy in common in personal property.  Sets forth rules of construction and relationship of new statutory provisions to the common law and principles of equity related to tenancy in common.