Lease Does Not Sever Joint Tenancy With Right Of Survivorship Under New York Law

In Harmon v. Misholy, an April 8, 2022 opinion, the court analyzed whether a lease executed by one owner severs a joint tenancy with right of survivorship and if the lease survives the death of the lessor co-owner under New York law.

The Facts of Harmon v. Misholy

Respondent entered into a five-year lease on property owned by Kathleen Martinis on April 1, 2020.  Martini co-owned the New York property “as joint tenants with right of survivorship” with Petitioner, who had no knowledge of the lease with Respondent, and did not consent to the lease.  Martinis died on May 16, 2020.

Petitioner argued that upon the death of Martinis, he succeeded to full ownership of the property by operation of law as the joint owner with right of survivorship.

Respondent urged that the execution of the lease severed the joint tenancy, thereby creating a tenancy in common without right of survivorship under New York law, and that the lease continued.

Joint Tenancy With Right Of Survivorship In New York

Under New York law, a “joint tenancy is an estate held by two or more persons jointly, with equal rights to share in its enjoyment during their lives, and creating in each joint tenant a right of survivorship” (24 NY Jur.2d, Cotenancy and Partition § 16, at 332, 333).

“The continuance of the joint tenancy depends on the maintenance of the unities of title, interest and possession, and the destruction of any of these unities leads to a severance of the tenancy, and to the creation of a tenancy in common or of several tenancies.” Loker v. Edmans, 204 App.Div.223, 226, 197 N.Y.S. 857 [internal quotation marks omitted].

How Do You Sever a Joint Tenancy In New York?

New York Real Property Law § 240-c entitled “Joint tenancy severance” provides in pertinent part as follows:

1.In addition to any other means by which a joint tenancy with right of survivorship may be severed, a joint tenant may unilaterally sever a joint tenancy in real property without consent of any non-severing tenant or tenants by: (a) Execution and delivery of a deed that conveys legal title to the severing joint tenant’s interest to a third person….(b) Execution of a written instrument that evidences the intent to sever the joint tenancy, including a deed that names the severing tenant as the direct grantee of the severing tenant’s interest.

2.No severance of a joint tenancy pursuant to subdivision one of this section shall terminate the right of survivorship of any non-severing joint tenant or tenants as to the severing tenant’s interest unless the deed or written instrument effecting the severance is recorded, prior to the death of the severing tenant, in the county where the real property is located.

This statute mandates that a deed or written instrument effecting the severance be recorded prior to the death of a severing tenant as a pre-condition to termination of the right of survivorship of the non-severing tenant. Real Property Law § 240-c(2).

Does a Lease Agreement Sever a Joint Tenancy Under New York Law?

This specific question appears to be a case of first impression in New York.

The Court noted that under English common law, the act of one joint tenant in leasing their interest to a third party would result in severance of the joint tenancy, but that this rule has not been followed here across the pond.  The Court discussed cases analyzing whether a lease agreement severs a joint tenancy:

In Tenhet v. Boswell, 18 Cal.3d 150, 155-158 (Sup.Ct.1976), the court ruled that a joint tenancy was not severed by a lease granted by a co-tenant for a period of years to a third party. The court further ruled that the lease expired upon the death of the co-tenant-lessor. Interestingly, in Alexander v. Boyer, 253 Md. 511 (1969), the court found that a joint tenancy had been severed as a result of a lease surrendering all of a joint-tenant’s possessory rights to the husband of the other joint-tenant. They based this ruling on a finding that the joint tenant had retained none of her possessory rights and had conveyed the lease to the co-tenant’s husband with the co-tenant’s knowledge and consent. These unique facts distinguish this case from the facts here.

Intent To Sever The Joint Tenancy + Recording Of Instrument Prior To Death = Severance of Joint Tenancy

The New York Court analyzed one more case to reach their conclusion as to whether a lease severs a joint tenancy:

In Smith v. Bank of America, 103 AD3d 21 (2nd Dep’t 2012), the court decided, as a matter of first impression, that a mortgage given by one co-tenant without the knowledge or consent of the other co-tenant was extinguished as a lien on the real property upon mortgagor’s passing. The court found that the act of mortgaging the property did not evince an intent to sever the co-tenancy, even though the mortgage was recorded prior to the mortgagor’s death. It did not interfere with any of the requirements to maintain a joint tenancy: unity of time, title, interest and possession. 103 AD3d at 24, 27. Significant to the case at bar, the court in Smith stated: “…the mortgage instrument contains no language evincing Hassid’s intent to sever the joint tenancy. In the absence of any such language or some other writing, we cannot conclude that the mere act of delivering a mortgage to the defendant evinced Hassid’s intent to sever the joint tenancy.” 103 AD3d at 27. The court held that upon his death, full ownership of the property passed to his surviving co-tenant free and clear of the mortgage lien. This court reaches the same conclusion with respect to petitioner’s succession to title, free and clear of the lease, upon which respondent bases her claim.

The Court found the reasoning in Smith v. Bank of America applicable.  Here, it was not at all clear that the lease granted to respondent evinced an intent by the grantor to sever the co-tenancy. Even if the court were to assume that it did, the fact that it was not recorded prior to the death of the lessor would invalidate any claim that by granting the lease the petitioner’s right to survivorship was thereby terminated.

The court therefore finds and determines that petitioner was the joint tenant with right of survivorship at the time of the co-tenant’s passing on May 16, 2020. As a result, he succeeded to full ownership of the property, free and unencumbered, by the April 1, 2020 lease that had granted respondent a non-exclusive tenancy of the subject premises. At most, Ms. Martinis as co-tenant had conveyed only her non-exclusive possessory interest. At all times petitioner, as co-tenant, retained his possessory interest. Upon Ms. Martinis’ passing, her possessory interest terminated, which also had the effect of terminating the lease to petitioner.

In short, the purported lease did not interfere with the unity of time, title, interest and/or possession, and the joint tenancy was not severed under New York law.  The Court vacated the lower court’s order and ordered the execution of a warrant of eviction.  For more cases about New York real property disputes after death, read Cooperative Apartments In New York Probate and New York’s Uniform Partition Of Heirs Property Act Does Not Apply Retroactively.