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Smith v. Estate of Gethings

A-6399-04T5 (N.J. Super. App. Div. 2007) (Unpublished)

TENANCIES-IN-COMMON — Where tenants-in-common agree that when one moves out of the property, the one who remains should compensate the other for his or her interest, absent any evidence to the contrary, the amount to be paid is to be calculated as of the time the initial tenant-in-common left the property, not as of the time closing takes place.

In 1969, two brothers, as tenants in common, purchased a residence for $27,900. The brothers shared the closing costs, shared the monthly carrying charges, and both signed the mortgage. They agreed that if one of the two were to marry, the other would move out and the one who remained would compensate the other for his interest.

In 1974, one of them married and the other brother offered to purchase his interest for $1,000. The married brother refused the offer, but the relationship continued amicably; when work was needed on the house, the married brother would lend a hand on the improvements. However, the status of the married brother’s interest was not clear. For example, the cost of improvements were paid for by the unmarried brother and when the married brother later divorced thereafter, he didn’t list the marital house as an asset in the divorce proceeding.

In 2002, the unmarried brother died, and the once-married brother filed a partition action to compel sale of the house. He contended that he owned a one-half interest, at that time valued at $304,000.

The lower court noted the paucity of evidence before it, including a lack of evidence as to the use and occupancy of the property over the years as well as the cost of maintenance. It concluded that the once-married brother’s interest should be calculated in accordance with the original agreement. Thus, the court awarded him one-half the value of the house as of 1974, which amounted to $21,500. He appealed, arguing that he was entitled to one-half of the current value of the property, but the Appellate Division affirmed the lower court’s findings on the record of evidence before it and concurred in the reasoning set forth in the lower court’s opinion.

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