By Benjamin L. Gottlieb
February 27, 2017
Question: 5 years ago I purchased a home in Tempe, Arizona (the “Property”) for $400,000. My girlfriend Sara moved in with me shortly after I purchased the Property. Everything was going great; and we became engaged after living together for 6 months. Also, to simplify matters, I added Sara as a joint tenant with rights of survivorship to the Property, granting her an undivided ½ interest in the Property. Recently, Sara’s younger sister died tragically in a car crash. The death of Sara’s sister caused great strain on our relationship, and she moved out last month and broke off our relationship. Yesterday afternoon, I received a demand letter from Sara’s lawyer requesting that I pay Sara $200,000, or ½ of the fair market value of the home, in exchange for a deed from Sara disclaiming her interest in the Property. What can happen if I ignore this demand letter?
Answer: Assuming the transfer of the ½ undivided interest in the Property was a valid transfer of real property under Arizona law, Sara owns a ½ undivided interest in the Property as a joint tenant with rights of survivorship, meaning the surviving joint tenant would become the absolute fee simple owner of the Property upon the death of the non-surviving joint tenant. Under Arizona law, a co-owner of real property has a statutory right to file what is called a partition lawsuit, forcing the sale of the subject property, with the proceeds to be allocated to the co-owners according to their respective share therein. Thus, here, if you ignore the demand letter, Sara has a statutory right to file a partition lawsuit, requesting that the Court force the sale of the Property. Absent a prior agreement entered into affecting Sara’s legal rights, the Court will likely allow the partition of the Property, subject to any defenses that may apply. You should consult with a qualified real estate attorney before deciding how to proceed.