• Matthew A. Jirkovsky

Myths: Undivided Interests in Land

Updated: Sep 2

Individuals that share proportionate ownership of land are called cotenants. When the land is owned in such a manner, it is referred to as a tenancy-in-common. A similar concept is a joint tenancy with rights of survivorship, but the two should not be conflated. This blog post discussed a tenancy-in-common.

Let's address a few common myths and misconceptions about co-ownership of the surface estate.

Myth 1: An undivided interest is a percentage of acreage.

Say you just inherited a 1/4 undivided interest in 100 acres of land. A very common belief is that you simply own 25 acres of land--this is absolutely not the case!

By definition, the interest is undivided. Below is a simple representation of the difference between undivided and divided land.

It is fairly straightforward. Absent some sort of partitioning, it is generally not possible to determine who owns what specific portion of the total property.

Real property must be described with reasonable certainty. Usually, this is in the form of a 'lot and block' or 'metes and bounds' description. While the 100 acres in the above scenario may be properly described in a prior deed, the hypothetical 25 acres of undivided land is not.

Additionally, when properly dividing the total property, you often must consider the value of each divided parcel, any improvements, contributions of various cotenants, access, easements, and rights-of-way.

For example, if you had a choice between the following properties, which would you put at a higher market value:

A: a 25 acre tract on top of a hill with a beautiful mansion; or

B: a 25 acre tract in a swamp that floods with the slightest rain.

Not all land is worth the same, which is the precisely why this myth is incorrect.

Myth 2: More ownership = more rights.

Under Texas law, a cotenant may not exclude any other tenant from any part of the property.

While an owner of a higher percentage is usually entitled to a larger share in the event of a sale or partition, the rights to utilize the property are the same, regardless of the percentage.

For example, a cotenant with a 0.001% undivided interest in 100,000 acres would have the right to access the entire property, not just 1 acre.

Sometimes, cotenants agree that a certain cotenant may use or build a house on the property. In those cases, the cotenant occupying the house may be able to exclude other cotenants from certain parts of the property. Absent such an agreement or some other factor, the default rule applies.

Myth 3: You can't do anything with an undivided interest.

Absent an agreement to the contrary, the owner of an undivided interest may possess, sell, encumber, and devise their proportionate interest in the property without the consent of the other cotenants. Upon the cotenant's death, the cotenant's undivided interests normally pass to their heirs.

Myth 4: You can do whatever you want with an undivided interest.

Conversely, a cotenant cannot bind another cotenant to a legal obligation without their consent. This means that a cotenant cannot do the following by themselves:

  • Sell all or part of the property

  • Grant an easement

  • Encumber more than their proportionate interest

  • Execute agreements on behalf of another cotenant

Matters get a bit more complicated when dealing with cotenants to a mineral estate or in dealing with certain residential homesteads in unique circumstances.

Myth 5: You cannot make improvements on co-owned land.

The general rule is that a cotenant may, without the other cotenants' consent, create an improvement on the property as long as the improvement does not prejudice the rights of another cotenant.

Additionally, if the improvement was 'necessary and beneficial,' then the cotenants would be liable for the costs of the improvement by their proportionate interests. If it was not necessary and beneficial, then the tenant making the improvement may recover for the enhanced value to the property. When a tenant becomes liable is generally upon partitioning the property or upon distributing the proceeds from sale.

However, what is or is not prejudicial or necessary and beneficial could be subject to dispute and, possibly, judicial interpretation.

Because of the potential uncertainties, a properly drafted written agreement might avoid issues down the road.

Myth 6: You are stuck in your cotenancy.

This final myth is often a reality.

Your cotenants may not want to buy you out or sell their interests to you. Buyers may not be interested in co-owning property with people they've never met. Maybe you and your cotenants cannot agree to partition the property. Maybe a lawsuit to partition the property would be cost-prohibitive.

However, you are not without options. A competent real estate attorney may be able to help you determine which option best suits your needs.

***This blog post should not be taken as legal advice. The information contained does not create an attorney-client relationship. The above is general information. I am a Texas attorney licensed to practice Texas law. This blog was written to provide information about non-specific Texas law. For specific questions regarding cotenancies, you should consult a Texas real estate attorney.***

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