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trust business, some states have moved to abolish the RAP altogether, especially for interests created in trust.7 Interestingly, advertisements in those states sometimes market the services of trust specialists on the ground that owners can now control the disposition of their property hundreds of years into the future. This puts the issue of dead hand control back in the spotlight.

RAP issues may seem to be of primary relevance to family wealth transmission and estate planning. But RAP issues can also arise in business settings. In some jurisdictions, notably New York and Pennsylvania, option contracts are subject to the RAP.8 Thus if one company grants another an option to purchase Blackacre (under which it has the right but not the obligation to purchase the property at a stated price) and any of the possible exercise times could occur more than 21 years later, there is trouble. Corporations cannot be measuring lives (their lives are indefinitely long), and so the RAP, in such jurisdictions, applies a 21-year time limit on options granted to corporations. Although options reduce the market price that the underlying property could fetch, options serve legitimate purposes of risk allocation and planning. Many have criticized the rationale for subjecting such options to the RAP at all, much less a 21-year one.

• Co-Ownership

Property rights can be split not only over time but can be shared at a given time. Co-ownership is used in a wide variety of situations where it is advantageous for multiple parties not just to share possession but to share the other incidents of ownership such as the

7.Max Schanzenbach & Robert Sitkoff, Jurisdictional Competition for Trust Funds: An Empirical Analysis of Perpetuities and Taxes, 115 Yale L.J. 356 (2005).

8.See, e.g., Symphony Space, Inc. v. Pergola Properties, Inc., 669 N.E.2d 799 (N.Y. 1996); Central Delaware County Auth. v. Greyhound Corp., 588 A.2d 485 (Pa. 1991).

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financial flows associated with full ownership. Sometimes multiple uses and risk-spreading are the reasons to share ownership. These factors can be especially important in a long-term relationship such as marriage. Shared ownership can also be accomplished using various business entities such as partnerships and corporations. Co-ownership is simply the most basic method of sharing ownership, without resorting to the law of business organizations.

The notion of shared ownership is filtered through the common law “unities.” The most fundamental unity is the unity of possession. All the forms of co-ownership involve this unity, under which the co-owners each have an equal right to possess the whole. This does not mean that each co-owner must possess the whole to maintain ownership. The unity of possession only requires that each co-owner have a right to possess the whole. In other words, each co-owner is a gatekeeper over the resource with respect to all nonowners. The common law form of co-ownership that relies only on the unity of possession is the tenancy in common. Of course in most physical resources, more than one person cannot possess the whole (or even significant parts) at the very same time, so the co-owners will need to work out among themselves who will have actual possession of what. If they cannot agree, and one co-owner prevents the other from taking possession, there is an ouster.

Generally, co-tenants are not liable to each other for their use of the property. By the unity of possession each has a right to possess the whole. Only when one co-tenant ousts another does the co-tenant in possession become liable to the other for rent (“mesne profits”). An ouster in most jurisdictions requires more than an expression of intent to possess by the nonpossessing co-tenant and a refusal by the possessing co-tenant; usually some attempt to go into possession that is foiled by the co-tenant in possession is required. Co-tenants are liable to each other for rents received from third parties, and one co-tenant can sue another for contribution for proportionate expenses for upkeep and taxes. Otherwise courts are reluctant to enforce monetary obligations between tenants, such as for improvements, but will do so in the course of a partition.

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Also, even though a co-tenant may not be liable (absent ouster) for the co-tenant’s own use, the value of the use may be taken into account (as a set-off) when the tenant in possession sues a nonpossessing co-tenant for contribution to expenses, such as taxes and mortgage payments. In general, courts prefer not to measure values during the relationship but will take a more comprehensive view if the co-ownership relationship is ending, or the matter is in court on other grounds.

Another form of co-ownership is the joint tenancy, which is like the tenancy in common with the added feature of the right of survivorship. Like the gift causa mortis, mentioned in Chapter 4, the joint tenancy functions as a will substitute. Thus if A and B own in a joint tenancy, and one of them dies, the survivor winds up with sole ownership. It is important to realize that the theory is that the interest of the decedent simply disappears, leaving the survivor with the sole interest; nothing passes, in contrast to the situation in which one tenant in common dies with a will naming the other tenant as devisee (a devisee is the recipient of real property under a will). So if O grants “to A and B as joint tenants with right of survivorship and not as tenants in common,” A and B would be joint tenants. To create a joint tenancy, additional unities—besides the unity of possession—are required. First is the unity of time, which means that the interests of both joint tenants must begin at the same time. Second is the unity of title, under which both the joint tenants must have received their interests by the same instrument (or act of adverse possession), not by intestacy or other operation of law. Third is the unity of interest, according to which the joint tenants must have identical interests in terms of duration and the basic package of rights. It does not require their shares to be equal: A tenancy in common or a joint tenancy can be set up in which one co-owner can be entitled to more than an equal fractional share of proceeds from the asset (e.g., two co-tenants sharing sixty-forty).

The only difference between the joint tenancy and the tenancy in common is the right of survivorship. Only co-owners with a very close relationship, usually married couples, those in a long-term

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relationship, or close relatives would consider entering a joint tenancy. For married couples, joint tenancy for the family home is quite common, and in some jurisdictions is the default option. (For nonmarried co-owners, the default is the tenancy in common.) With respect to any other issue, the tenancy in common and the joint tenancy are exactly the same. So in either co-tenancy each co-owner has most of the rights of ownership: Each can exclude or admit strangers to the property, each can use property for enjoyment or profit, and each can sell his or her interest to a stranger.

The right of survivorship can be eliminated by “severing” the joint tenancy, leaving the joint tenants as tenants in common. To sever a joint tenancy one of the unities of special relevance to the joint tenancy—time, title, or interest—must be destroyed. If one joint tenant conveys to a third party, this destroys the unities of time and title and severs the joint tenancy. So if A and B are joint tenants, and A conveys to C, then B and C wind up being tenants in common. One common maneuver was for A to convey to C, and C to convey right back to A, where C would be considered a “strawman” or “straw.” These days many courts will consider the joint tenancy severed if one conveys to oneself as tenant in common.9 Courts are more divided over whether other actions, such as leasing, sever the joint tenancy.10 Of particular interest are the questions of whether a mortgage by one of the joint tenants severs the joint tenancy, and what effect the death of either one of the joint tenants has on the mortgage.11 Under the older “title theory” of mortgages, the mortgage took the form of a deed, and the conveyance would sever the joint tenancy, leaving the co-owners as tenants in common. Thus if either died, there would be no right of

9.See Riddle v. Harmon, 162 Cal. Rptr. 530 (Cal. Ct. App. 1980).

10.Compare Tenhet v. Boswell, 554 P.2d 330 (Cal. 1976) with Alexander v. Boyer, 253 A.2d 359 (Md. 1969).

11.See, e.g., Harms v. Sprague, 473 N.E.2d 930 (Ill. 1984) (adopting the lien theory of mortgages and holding that mortgage did not sever joint tenancy and disappeared on the death of the mortgaging joint tenant).

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survivorship, and the mortgage would remain on the mortgaging tenant’s interest. Under the newer lien theory of mortgages, the mortgage does not sever the joint tenancy. According to the theory of the joint tenancy, the lien should probably disappear on the death of the mortgaging co-owner, but some courts hold that it survives as a lien on half the property. (Relatedly, courts are divided on whether the death of the nonmortgaging co-owner allows the lien to attach to the entire property.)

Severance simply turns a joint tenancy into a tenancy in common, but sometimes co-owners in either arrangement would like to cease being co-owners altogether. If so, they can agree that one will sell his or her interest to the other, or both will sell to a third party and split the proceeds. Failing that, the parties can petition a court for a partition, which is a court order dissolving the co-ownership. Partition is the ultimate form of no-fault divorce; courts will grant partition at the request of either owner, without requiring any justification. Partition can be in kind or by sale. Courts and statutes usually state a preference for in kind partition, which preserves some subjective value for those resources that can be physically split, over partition by sale, which often involves a court in more valuation issues. Nevertheless, there has been a trend toward partition by sale, perhaps because in the case of personal property and urban land, parcels are not as easy to split into viable parts, as was the case with tracts of farm land in an earlier era.

Some states have an additional form of co-ownership, reserved for married couples: the tenancy by the entirety. We will return to marital interests below, but the tenancy by the entirety is like the joint tenancy, in that it includes a right of survivorship, but unlike the joint tenancy, the tenancy by the entirety cannot be unilaterally severed. To destroy the tenancy by the entirety, the co-owners must get divorced, or convey the property to themselves (possibly by way of an intermediate “straw” transactor). For the tenancy by the entirety to be created, all the unities for the joint tenancy are required (time, title, interest, possession) plus the unity of marriage. Jurisdictions vary, but the tenancy by the entirety provides if