Real Estate

What is Real Estate?

Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. Real estate is often considered synonymous with real property (also sometimes called realty), in contrast with personal property, chattel, or personality. However, for technical purposes, some people prefer to distinguish real estate, referring to the land and fixtures themselves, from real property, referring to ownership rights over real estate. The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property.

In spite of the name, real estate has no connection with the concept of reality (in other words, the law does not consider real property more "real" than personal property). It derives instead from the feudal principle that in a monarchy, all land was considered the property of the king. Thus originally the term real estate was equivalent to "royal estate", real originating from the French royale, as it was the French-speaking Normans who introduced feudalism to England and thus to the English language; cognate to Spanish real.

With the development of private property ownership, real estate has become a major area of business. Purchasing real estate requires a significant investment, and each parcel of land has unique characteristics, so the real estate industry has evolved into several distinct fields. Specialists are often called on to valuate real estate and facilitate transactions. Some kinds of real estate businesses include:

* Appraisal - Professional valuation services

* Brokerages - Assisting buyers and sellers in transactions

* Development - Improving land for use by adding or replacing buildings

* Property management - Managing a property for its owner(s)

* Relocation services - Relocating people or business to different country

Within each field, a business may specialize in a particular type of real estate, such as residential, commercial, or industrial property. In addition, almost all construction business effectively has a connection to real estate.

Land lording and the Tennant.

A landlord is the owner of a house, apartment, condominium, or land which is rented or leased to an individual or business, who is called the tenant.

In the United States, landlord-tenant disputes are governed by state law (not federal law) regarding property and contracts. State law and, in some places, city law or county law, sets the requirements for eviction of a tenant. Generally, there is limited number of reasons for which a landlord can evict his tenant. Some cities have laws establishing the maximum rent a landlord can charge, known as rent control.

A rental agreement, or lease, is the contract defining such terms as the price paid, penalties for late payments, the length of the rental or lease, and the amount of notice required before either the landlord or tenant cancels the agreement. In general, the landlord is responsible for repairs and maintenance, and the tenant is responsible for keeping the property clean and safe.

Many landlords hire a property management company to take care of all the details of renting their property out to a tenant. This usually includes advertising the property and showing it to prospective tenants, and then, once rented, collecting rent from the tenant and performing repairs as needed.

Duties of the landlord

The landlord has two common-law duties. The first is to give the tenant possession of the land; the second is to provide the premises in a habitable condition - there is an implied warranty of habitability. If landlord violates either, the tenant can break the lease and move out, or stay and sue the landlord for damages

The lease also includes an implied covenant of quiet enjoyment - landlord will not interfere with tenant's quiet enjoyment. This can be breached in three ways.

1. Total eviction of tenant through direct physical invasion by landlord

2. Partial eviction - when the landlord keeping tenant off part of the leased property (even locking a single room). Tenant can stay on the remaining property without paying any rent.

3. Partial eviction by someone other than landlord - where this occurs, rent is apportioned. If landlord leases tenant 100 acres of land, but it turns out that 40 of those acres belong to another person, tenant only has to pay 60% of the rent.

Landlord's tort liability

Under the common law, the landlord had no duties to the tenant to protect the tenant or the tenant's licensees and invitees, except in the following situations:

1. Failure to disclose latent defects of which the landlord knows or has reason to know. Note that the landlord has no duty to repair, just to disclose.

2. For a short term lease (3 months or less) of a furnished dwelling, the tenants are treated as invitees, and the landlord is liable for defects even if the landlord neither knows nor should know of them.

3. Common areas under landlord's control (e.g. hallways in an apartment building), if the landlord failed to use reasonable care in maintaining them.

4. Injury resulting from landlord's negligent repairs - even if the landlord used all due care.

5. Public use, if the following three factors exist:

1. Landlord knows or should know that the tenant makes public use of the land (e.g. the land is rented for use as a restaurant or a store);

2. Landlord knows or should know that there is a defect; and

3. Landlord knows or should know that the tenant will not fix the defect.

Duties of the tenant

Under the common law, the tenant has two duties to the landlord. These are to pay rent when it is due, and to avoid waste of the property.

A tenant is liable to third party invitees for negligent failure to correct a dangerous condition on the premise - even if the landlord was contractually liable.

What is Eminent Domain?

In United States law, eminent domain is the power of the state to appropriate private property for its own use without the owner's consent. In England and Wales, and other jurisdictions that follow the principles of English law, the related term compulsory purchase is used. Governments most commonly use the power of eminent domain when the acquisition of real property is necessary for the completion of a public project such as a road, and the owner of the required property is unwilling to negotiate a price for its sale. In many jurisdictions the power of eminent domain is tempered with a right that just compensation be made for the appropriation.

Some coined the term "expropriation" to refer to "appropriations" under eminent domain law, and may especially be used with regard to jurisdictions that do not pay compensation for the confiscated property. Examples include the 1960 Cuban expropriation of property held by U.S. citizens, following a breakdown in economic and diplomatic relations between the Eisenhower administration and the Castro regime.

The term "condemnation" is used to describe the act of a government exercising its authority of eminent domain. It is not to be confused with the term of the same name that describes the legal process whereby real property, generally a building, is deemed legally unfit for habitation due to its physical defects. Condemnation via eminent domain indicates the government is taking the property; usually, the only thing that remains to be decided is the amount of just compensation. Condemnation of buildings usually occurs through health and safety hazards or gross zoning violation. In this case, the owner of the property does not lose the property, he or she merely needs to make corrections to the property to bring it up to health, safety and/or zoning codes.

The exercise of eminent domain is not limited merely to real property. Governments may also condemn the value in a contract such as a franchise agreement (which is why many franchise agreements will stipulate that in condemnation proceedings, the franchise itself has no value).

In the United States, the Fifth Amendment to the Constitution requires that just compensation be paid when the power of eminent domain is used, and requires that "public purpose" of the property be demonstrated. Over the years the definition of "public purpose" has expanded to include economic development plans which use eminent domain seizures to enable commercial development for the purpose of generating more tax revenue for the local government. Critics contend this perverts the intent of eminent domain law and tramples personal property rights. On Thursday June 23, 2005, the Supreme Court ruled, in a 5-4 ruling against Connecticut residents, that local governments may seize private property for economic development. Sandra Day O'Connor, who was in the minority vote, released her opinion on her displeasure on the outcome of the ruling, which she rarely ever does. The prevailing 5-vote majority was comprised of Justices Anthony Kennedy (R-Reagan), David H. Souter (R-Bush), John Paul Stevens (R-Ford), Ruth Bader Ginsburg (D-Clinton), and Stephen G. Breyer (D-Clinton).

In 1981, in Michigan, the Supreme Court of Michigan, building on the precedent set by Berman v. Parker, 348 U.S. 26 (1954), permitted the neighborhood of Poletown to be taken in order to build a General Motors plant. Courts in other states relied on this decision, which was overturned in 2004, as precedent. This expansion of the definition was argued before the United States Supreme Court in February of 2005, in Kelo v. New London. In June of 2005, the Supreme Court issued their decision in favor of New London, making eminent domain applicable for private economic development.

Following this decision, paperwork was filed to obtain the property of Justice David Souter, who voted in favor of the Kelo decision.

In other cases eminent domain has been used by communities to take control of planning and development. Such is the case of the Dudley Street Initiative, a community group in Boston which attained the right to eminent domain and have used it to reclaim vacant properties in the purpose of positive community development.

What is Foreclosure?

Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a piece of real property due to the owner's default on its promissory note. When the process is complete, it is typically said that "the lender has foreclosed its mortgage or lien."

In the United States, there are two sorts of foreclosure in most common law states. Under "strict foreclosure," the bank claims the title and possession of the property back in full satisfaction of a debt, usually on contract. In the proceeding simply known as foreclosure, the property is exposed to auction by the county sheriff or some other officer of the court. Many states require this latter sort of proceeding in some or all cases of foreclosure, in order to protect any equity the debtor may have in the property, in case the value of the debt being foreclosed on is substantially less than the market value of the property (this also discourages strategic foreclosure). In this foreclosure, the sheriff then issues a deed to the winning bidder at auction. Banks and other institutional lenders typically bid in the amount of the owed debt at the sale, and if no other buyers step forward they get title to the property in return.

Other states have adopted non-judicial foreclosure proceedings, in which the mortgagee, or more commonly the mortgagee's attorney, gives the homeowner a legally specified notice of the default and the mortgagee's intent to sell the property. If the homeowner fails to cure its default, or use other lawful means (such as filing for bankruptcy) to stop the sale, the mortgagee or its representative will conduct a public auction in a similar manner as the sheriff's auction described above. The highest bidder at the auction becomes the owner of the property free and clear of any interest of the former homeowner.

In most jurisdictions it is customary for the foreclosing lender to run a title search of the property and to name all other persons who may have liens on the property, whether by judgment, by contract, or by statute or other law, so that they may appear and assert their interest in the foreclosure litigation. In all US jurisdictions a lender who conducts a foreclosure sale of property which is the subject of a federal tax lien must give 25 days notice of the sale to the Internal Revenue Service: failure to give notice to the IRS will result in the lien remaining attached to the property after the sale.

What is Ad Valorem Tax?

An Ad valorem tax is a tax based on the assessed value of real estate or personal property. In other words ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenues for state and municipal governments.

An ad valorem tax is typically imposed at the time of a transaction (sales tax or value added tax (VAT)) but it may be imposed on an annual basis (property tax) or in connection with another significant event (inheritance tax or tariffs). The alternative to ad valorem taxation is a fixed rate tax, where the tax base is the quantity of something, regardless of its price: for example, in the United Kingdom, a tax is collected on the sale of alcoholic drinks that is calculated on the quantity of alcohol contained rather than the price of the drink.

Ad Valorem is latin for "According to value".

What is an Appraisal?

A real estate appraisal is a service performed, by an appraiser, that develops an opinion of value based upon the highest and best use of real property. The highest and best use is that use which produces the highest possible value for the property. This use must be profitable and probable. Also of importance is the definition of the type of value being developed and this must be included in the appraisal, ie fair market value, condemnation value, quick sale value, etc. The most common type of value sought being the fair market value.

There are three usual approaches to determining the fair market value of a property, cost approach, sales comparison approach, and income approach. The appraiser will determine which of the approaches is applicable and develop an appraisal based upon information from each individual market area. Costs, income, and sales vary widely from area to area and particular importance is given to the specific location of the property.

The Cost Approach is sometimes called the summation approach. The theory is that the value of a property can be estimated by summing the land value and the depreciated value of any improvements. It is the land value, plus the cost to reconstruct any improvements, less the depreciation on those improvements. The value of the improvements is sometimes abbreviated to RCNLD—reproduction cost new less depreciation, or replacement cost new less deprecation. Reproduction refers to reproducing an exact replica. Replacement cost refers to the cost of building a house or other improvement which has the same utility, but using modern design, workmanship and materials.

In most instances, when the cost approach is involved, the overall methodology used is a hybrid of the cost and market data approaches. For instance, while the cost to construct a building can be determined by adding the labor and materials costs together, land values and depreciation must be derived from an analysis of the market data. This approach is typically most reliable when used on newer structures, but the method tends to become less reliable as properties grow older.

The sales comparison approach looks at the price or price per unit area of similar properties being sold in the marketplace. Simply put, the sales of properties similar to the subject are analyzed and the sale prices adjusted to account for differences in the comparables to the subject to determine the fair market value of the subject. This approach is generally considered the most reliable, IF good comparable sales exist.

The income approach capitalizes an income stream into a present value. This can be done using revenue multipliers or single-year capitalization rates of the net operating income. The Net operating income (NOI) is gross potential income (GPI), less vacancy (= Effective Gross Income) less operating expenses (but excluding debt service or depreciation charges applied by accountants). Alternatively, multiple years of net operating income can be valued by a discount cash flow analysis (DCF) model. The DCF model is widely used to value larger and more expensive income-producing properties, such as large office towers.

Automated valuation models (AVMs) are growing in acceptance. These rely on statistical models such as multiple regression analysis and geographic information systems (GIS). While AVMs can be quite accurate, particularly when used in a very homogeneous area, there is also evidence that AVMs are not accurate in other instances. This is most evident where there is a renewal or "revitalization" of a particular area or neighborhood. There can exist within a single city block homes that are in poor condition to homes that have been completely rehabilitated and are in good to excellent condition. The differential of sales prices can be demonstrated to be from 50% to 125%. This can lead to an inaccurate model. Extreme caution should be exercised when relying on these AVMs.

What is Appreciation?

Appreciation is a term used in accounting relating to the increase in value of an asset. In this sense it is the reverse of depreciation, which measures the fall in value of assets over their normal life-time.

In times of high inflation, appreciation will be common to all balance sheet assets. Generally, the term is reserved for property or, more specifically, land and buildings. In any viable modern economy, such property tends to increase in value over the years - if only because of the scarcity of usable land forces its price in a competitive situation.

Needless to say there are considerable difficulties in assessing the increase in value of any particular asset. This is principally because of the variety of interpretations that can be attached to the word value itself and due to the various instruments and methods used in the valuation process.

What is Capital Gain?

In finance, a capital gain is profit that is realized from the sale of an asset that was previously purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, and property. (If the sale of the asset had yielded a loss rather than a profit, this loss would be called a capital loss.)

Capital gains are often exempt from income tax, in which case it may be important to distinguish capital gains (or losses) realized on the sale of fixed assets (long-life assets that form part of the structure of a business, such as real property) from trading profits or losses realized on the sale of trading stock (short-life assets that are quickly sold on).

In many jurisdictions, including the United States and the United Kingdom, capital gains are subject to a capital gains tax.

What is Refinancing?

Refinancing refers to applying for a secured loan intended to replace an existing loan secured by the same assets. The most common consumer refinancing is for a home mortgage.

Refinancing may be undertaken to reduce interest costs (by refinancing at a lower rate), to pay off other debts, to reduce one's periodic payment obligations (sometimes by taking a longer-term loan), to reduce risk (such as by refinancing from a variable-rate to a fixed-rate loan), and/or to liquidate some or all of the equity that has accumulated in real property during the tenure of ownership.

It is advisable to speak with a financial professional, familiar with your existing home loan, before deciding to refinance. Certain types of loans contain penalty clauses that are triggered by an early payment of the loan, either in its entirety or a specified portion. Also, some refinanced loans, while having lower initial payments, may result in larger total interest costs over the life of the loan, or expose the borrower to greater risks than the existing loan. Calculating the up-front, ongoing, and potentially variable costs of refinancing is an important part of the decision on whether or not to refinance.

Balance transfer

People often resort to "Balance Transfer", a facility provided by Credit Card companies. This is highly beneficial, if they understand all the terms and conditions and confirm them at the time of making a transfer.

Balance transfers offer a very low rate of interest (APR) or some cards have an offer of 0% APR on balance transfers. So how does one gain here? Pay off your existing high interest loan with the amount that you transfer and keep repaying this loan from balance transfer till you finish off before the deadline after which the APR shoots up to your normal APR (typically anywhere between 10% to 20%)

There are two catches here though. Credit card companies have a policy of applying your payments to the balance with lowest APR. Confused? Let's take up a scenario.

Let's say you already have a balance of $350 on your card and your purchase APR is 15%. Now, you make a balance transfer of $2,000 on your card for 0% APR. Now the monthly payments that you make, they will apply completely towards those $2,000 that you transferred. The balance of $350 from the purchase stays on accruing interest on that at the rate of 15% APR.

This also suggests that you should not use the same card to make any purchases after you make a balance transfer using that card. The reason is the same as explained above. Any monthly payments that you make is going towards your balance transfer letting the purchase balance to accrue interest at a higher APR, so you should never make a balance transfer on your card unless the balance is zero.

What is the Truth and Lending Act?

The Truth in Lending Act (TILA) refers to two closely related items. The one usually meant is 12 CFR Sec. 226, as amended. It is also known as Regulation Z. This regulation is maintained by the Federal Reserve Board. The other is the law version of the Truth in Lending Act, which the regulation implements, contained in title I of the Consumer Credit Protection Act, as amended (15 USC 1601 et seq.). (12 CFR 226 also implements title XII, section 1204 of the Competitive Equality Banking Act of 1987 (Pub. L. 100-86, 101 Stat. 552, so it has slightly more information that the USC.) In practice it is the regulation that is generally meant when people refer to TILA.

The purpose of this regulation is to promote the informed use of consumer credit by requiring disclosures about its terms and cost. The regulation also gives consumers the right to cancel certain credit transactions that involve a lien on a consumer's principal dwelling, regulates certain credit card practices, and provides a means for fair and timely resolution of credit billing disputes. The regulation does not govern charges for consumer credit. The regulation requires a maximum interest rate to be stated in variable-rate contracts secured by the consumer's dwelling. It also imposes limitations on home equity plans that are subject to the requirements of Sec. 226.5b and mortgages that are subject to the requirements of Sec. 226.32. The regulation prohibits certain acts or practices in connection with credit secured by a consumer's principal dwelling.

Organization

The regulation is divided into subparts and appendices as follows:

Subpart A contains general information. It sets forth: (i) The authority, purpose, coverage, and organization of the regulation; (ii) the definitions of basic terms; (iii) the transactions that are exempt from coverage; and (iv) the method of determining the finance charge.

Subpart B contains the rules for open-end credit. It requires that initial disclosures and periodic statements be provided, as well as additional disclosures for credit and charge card applications and solicitations and for home equity plans subject to the requirements of Sec. Sec. 226.5a and 226.5b, respectively.

Subpart C relates to closed-end credit. It contains rules on disclosures, treatment of credit balances, annual percentage rate calculations, rescission requirements, and advertising.

Subpart D contains rules on oral disclosures, Spanish language disclosure in Puerto Rico, record retention, effect on state laws, state exemptions, and rate limitations.

Subpart E contains special rules for mortgage transactions. Section 226.32 requires certain disclosures and provides limitations for loans that have rates and fees above specified amounts. Section 226.33 requires disclosures, including the total annual loan cost rate, for reverse mortgage transactions. Section 226.34 prohibits specific acts and practices in connection with mortgage transactions.

Several appendices contain information such as the procedures for determinations about state laws, state exemptions and issuance of staff interpretations, special rules for certain kinds of credit plans, a list of enforcement agencies, and the rules for computing annual percentage rates in closed-end credit transactions and total annual loan cost rates for reverse mortgage transactions.

The lender must disclose to the borrower the annual percentage rate (APR). The APR reflects the effective yield on a loan including origination fees and discount points. All fees are considered the income of the lender regardless of any costs they are designed to cover.

What is Adjustable Rate Mortgage?

An adjustable rate mortgage or variable rate mortgage is a loan secured on a property (house) whose interest rate and so monthly repayment vary over time. Other forms of mortgage loan include interest only mortgage, fixed rate mortgage, discounted rate mortgage and balloon payment mortgage. Adjustable rates transfer part of the interest rate risk from the lender to the borrower. They can be used where unpredictable interest rates make fixed rate loans difficult to obtain. The borrower benefits if the interest rate falls and loses out if interest rates rise.

Variable rate mortgages are the most common form of loan for house purchase in the United Kingdom but are unpopular in some other countries. Variable rate mortgages are very common in Australia and New Zealand. For those who plan to move within a relatively short period of time (three to seven years), they are attractive because they often include a lower, fixed rate of interest for the first three, five, or seven years of the loan, after which the interest rate fluctuates.

Adjustable rate mortgages, like other types of mortgage, may offer the ability to repay principal (or capital) early without penalty. Early payments of part of the principal will reduce the total cost of the loan (total interest paid), and will shorten the amount of time needed to pay off the loan. Early payoff of the entire loan amount (refinancing) is often done when interest rates drop significantly.

Adjustable rate mortgages are sometimes sold to unsophisticated consumers who are unlikely to be able to repay the loan should interest rates rise, which they often do. In the United States, extreme cases are characterized by the Consumer Federation of America as predatory loans. Protections against interest rate rises include (a) a possible initial period with a fixed rate (which gives the borrower a chance to increase his/her annual earnings before payments rise); (b) a maximum (cap) that interest rates can rise in any year (if there is a cap, it must be specified in the loan document); and (c) a maximum (cap) that interest rates can rise over the life of the mortgage (this also must be specified in the loan document).

Due to changes in government policy among many OECD countries, the Federal Reserve Bank (or its equivalent) is now charged with maintaining an inflation rate at a low (at or below 2 percent) level. This policy has made a significant impact on the volatility of adjustable rate mortgages, as the supply of money is more tightly controlled by the Federal Reserve, reducing the frequency and size of fluctuations in the base rate.

Eviction.

Eviction is a legal process by which a landlord forces a tenant to move out of the landlord's property involuntarily and usually permanently.

In some areas, landlords can evict their tenants without cause. In other areas, the law requires landlords to have a "just cause", which usually includes nonpayment of rent or damaging the property.

The requirement of notice also varies; in some areas, landlords must post an official eviction notice on the property a certain number of days before the tenant can be forced off the property. In some areas the landlord must get the police to post this notice.

Some jurisdictions require the landlord to obtain a court order before a tenant can be evicted.

Notice Preceding Complaint

Under California Law, a Landlord must serve the tenant with a Notice before an eviction procedure can commence. If the tenant is behind on rent, a 3-day Notice to Pay Rent or Quit must be served. If the lease has been violated, then a 3-day Notice to Perform Covenant or Quit must be served, and the Landlord should try and collect evidence to prove that a breach has occurred. These notices must be stated in the alternative (providing tenant an opportunity to correct the breach) to be valid. If the breach is serious (as defined by law) and not curable, (e.g. the tenant has been using or selling drugs), the notice does not have to be phrased "in the alternative", and a 3-day Notice to Quit may be served, stating the incurable breaches.

If landlord wishes to terminate a month-to-month rental agreement without good cause, 30 days Notice must be given, and 60 days Notice must be given if the tenant has lived on the premises longer than one year.

Laws differ under Section-8 housing and in rent-control jurisdictions, making it more difficult for the landlord to terminate the tenancy, especially without good cause.

Unlawful Detainer

If the tenant remains on the premises after the expiration of the Notice (without correcting the breach if applicable), then the Landlord may file an Unlawful Detainer lawsuit with the court, and have the documents personally served on the tenant (other methods of service are not ideal, as they allow the tenant more time to respond, while service by posting requires a court order).

The trial process is expedited due to the time sensitive nature of the matter (i.e. the landlord may be losing rent each day the tenant is in possession of the premises), and the tenant is allowed only five days to answer the Complaint. If the tenant fails to respond, the Landlord may obtain a Default Judgment, and Writ of Possession, and have the Sheriff execute the Writ by forcibly removing the tenants if necessary.

If the tenant does Answer the Complaint (which is always in their best interest, even if they have no reasonable argument for defense), the landlord may set the matter for trial by filing the appropriate document with the court. The trial will be set by the court within twenty days. The trials are generally less than an hour long, unless the tenant requests a jury trial, which is rare. Each side is allowed to present witnesses or evidence to prove their case. Generally, in non-rent controlled jurisdictions, the landlord prevails unless they overstated the amount of rent due, or committed some other fatal error in either the service of papers, or in the Notice or Complaint.

A monetary judgment may only be obtained at trial, and not by default. It can be quite difficult to enforce a money judgment, unless the Landlord knows the tenant's bank account information, or where the Tenant is currently employed. Therefore, the primary objective of an Unlawful Detainer is to evict the tenant from the premises.

Many times, it is possible to settle Unlawful Detainer cases via a Stipulation.

Landlord/Tenant Law, while not as complex as many other areas of Law, is still too complicated for the average landlord or tenant to fully understand. Landlords may want to consider hiring an attorney to represent them in their case, as issues such as retaliation and habitability are commonly raised as a defense. Tenants are also well advised to seek legal counsel if they can afford it. There are inexpensive or free legal aid centers for those who qualify.

What is a Joint tenancy?

A concurrent estate or co-tenancy is a concept in property law, particularly derived from the common law of real property, which describes the various ways in which property can be owned by more than one person at a given time. The parties who own property jointly are referred to as co-tenants or joint tenants. Most common-law jurisdictions recognize three kinds of concurrent estate: tenancy in common, joint tenancy with right of survivorship, and tenancy by the entirety. Many jurisdictions simply refer to a joint tenancy with right of survivorship as a joint tenancy, but a few U.S. States treat the phrase joint tenancy as synonymous with a tenancy in common.

Rights and duties shared by all cotenants

Co-tenants, irrespective of the type of tenancy, share certain rights to the property:

1. Each tenant has an unrestricted right of access to the property. Where one co-tenant wrongfully excludes another from making use of the property, the excluded co-tenant can bring a cause of action for ouster, and may receive the fair rental value of the property for the time that he was dispossessed.

2. Each tenant has a right to an accounting of profits made from the property. If the property generates income such as rent, each tenant is entitled to a proportion of that income.

3. Each tenant has a right of contribution for the costs of owning the property. Co-tenants can be forced to contribute to the payment of expenses such as repairs, property taxes, and mortgages on the entire property.

Co-tenants have no obligation to contribute to any costs of improving the property. Furthermore, each co-tenant can independently encumber their own share in the property by taking out a mortgage on that share; other co-tenants have no obligation to help pay a mortgage that only runs to another tenant's share of the property, and the mortgagee can only foreclose on that share.

Finally, co-tenants owe one another a duty of fair dealing. Because of this, any co-tenant who acquires a mortgage claim against the property must give his co-tenants a reasonable opportunity to purchase proportionate shares in that claim.

Destruction of a tenancy in common

Where the parties to a tenancy in common wish to destroy the joint interest, they can do so through a partition of the property - a division of the land into distinctly owned plots.

If the parties are unable to agree to a partition, any or all of them may seek the ruling of a court to determine how the land should be divided up, physically divide it between the joint owners, leaving each with ownership of a portion of the property representing their share.