California Partition Law Blog
Yes, although the tenant is not allowed to exclude the non-consenting owners. The reason for this is grounded in ancient legal doctrine regarding the “right to possession” that all co-owners of property share together. Each owner may exercise this right, and each may grant it to a third party, should they so choose, even without the consent of the other owners.
While this may be legally allowed, however, it rarely results in anything other than trouble and lawsuits. In these situations, getting the right real estate attorney by your side can make all the difference. At the Underwood Law Firm, our attorneys are well-versed in the law surrounding co-ownership and the rights and duties accompanying it. Here, we’re with you every step of the way.
How does the law view leasing jointly-owned property?
While jointly-owned property can have different ownership schemes (tenancy-in-common and joint tenancy), there is, regardless, a “right to possession” that all the cotenants have. (Preciado v. Wilde (2006) 139 Cal.App.4th 321, 323.) This possessory right simply means that each cotenant has the right to occupy the whole of the property whenever they want, irrespective of their particular ownership percentage.
What happens when multiple co-owners want to occupy the whole property at the same time? That’s for them to work out among themselves. The law is clear on the right these owners have but not so much on the practicalities of the situation.
Nonetheless, because each cotenant has this “right,” it follows that they can grant this right to a third party. This is where the lease comes into play. Under the law, if one co-owner wants to lease the property to a renter, what’s really happening is that the owner is giving their right of possession to another person in exchange for money (the rent). Put differently, “when one cotenant leases to a third party, he confers upon the latter the same right of possession that he himself has.” (Verdier v. Verdier (1957) 152 Cal.App.2d 348, 352.)
Can the tenant use the whole property?
This is a tricky question that goes back to the earlier point about how the “law” views possession by cotenants. The absurdity of the proposition aside, it is black letter law that one cotenant possessing the property is deemed “the possession of all.” (Russel v. Lescalet (1967) 248 Cal.App.2d 310, 313.)
As an illustration, suppose Jack is a 10% owner of a house with Jill. Even though he only owns one-tenth of the house, Jack can freely possess the whole property because, while one cotenant is exercising their right of possession, it counts as all cotenants exercising their right.
Let’s now transfer this idea to a context involving a lease. As established, a lease is really just the granting of a co-owner’s possessory right to a third party. And as just stated, the possession of one cotenant is the possession of all cotenants. Thus, a tenant is really just in the position of the owner because the tenant has the owner’s right to possess the whole of the property.
As set forth by the Court of Appeal, “the joint tenant in possession is entitled to the possession of the entire property and by his lease merely gives to his lessee a right he, the lessor, had been enjoying.” (Swartzbaugh v. Sampson (1936) 11 Cal.App.2d 451, 457.)
In short, regardless of the owner’s ownership percentage, they can lease the property to a tenant, and that tenant can, technically, use the whole property should they desire.
What if the other co-owners do not consent to the lease?
This is also a difficult question to answer because it pits two legal maxims against one another.
On one hand, cotenants can possess the whole property and can freely give their right of possession to third parties. But on the other, it’s a general rule that one cotenant cannot bind co-owners absent express or implied authority. (Id.)
As an illustration, consider a mortgage, deed of trust, or sale. It wouldn’t make much sense for a 10% owner to be able to sell 100% of the property. Along those lines, without the consent of their other co-owners, a cotenant can encumber only their individual interest in the property. (Schoenfeld v. Norberg (1970) 11 Cal.App.3d 755, 765.)
How, then, can one co-owner lease the whole property absent consent from their fellow cotenants? It goes back to the discussion about exercising the right of possession. In exercising this right, the tenant is not prejudicially affecting the rights of the other owners because, again, possession by one is deemed possession of all.
Does a co-owner have any remedies if they did not consent to a lease?
Yes and no. Legally speaking, there is no “remedy” that a non-consenting owner can exercise in the way the word is interpreted by the law. But there is a right to profits that, if not received, can ultimately result in a lawsuit.
This is because every cotenant is entitled to a share of the profits derived from the use of the common property. And this is also where ownership percentage can really make a difference.
Returning to Jack and Jill, suppose Jack rents out the whole property to Sam (recall that Jack is only a 10% owner). While Jill may not have consented to Jack’s action, Jill, as a 90% owner, is entitled to 90% of the rent. Put plainly, If one cotenant rents the whole property to a third party, he must share the proceeds with his cotenants in accordance with their respective percentages of ownership. (Garcia v. Andrus (9th Cir. 1982) 692 F.2d 89, 92.)
Another source of potential litigation is the actual act of possessing the property. The tenant, even though they may be renting the whole property, cannot refuse possession to the other cotenants. Similarly, a non-consenting co-owner cannot refuse to grant possession to the tenant.
How the Attorneys at the Underwood Law Firm Can Help
Disputes between co-owners are simply all too common when it comes to real estate. The more co-owners there are, the harder it is to come to common ground on even the most basic items. And certainly, in the case of whether or not to lease out the property, there is bound to be a difference of opinion.
As each case is unique, property owners would be well-served to seek experienced counsel familiar with the intricacies of cotenancy and joint ownership. At the Underwood Law Firm, our knowledgeable attorneys are here to help. If you’re being denied your share of proceeds, wondering if you fight off a lease you didn’t consent to, or if you just have questions, please do not hesitate to contact our office.
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