Tenancy in Common Disfavored in Washington Property Distribution

A court hearing a Washington divorce case must distribute all of the parties’ property. The parties’ interest in the property must be “definitely and finally determined.” A wife recently challenged the property division in her divorce decree, arguing that the tenancy in common ownership of the property did not result in a timely distribution of the property.

The parties had been married about 14 years when the wife petitioned for divorce.  The court awarded full custody of both children to the father.  The court did not order child support, but the father received SSDI benefits for the children, both of whom have disabilities.

The wife testified that she was disabled at the time of the trial.  She worked part-time as a substitute teacher and also received SSI benefits.

The husband testified that his income came from the parties’ business.  He also testified as to the value of the commercial property, but there was no evidence of the value of the residence or other assets in the record. The trial court found there was no mortgage or debt.

Instead of considering the property division factors in RCW 26.09.080, the court primarily considered the children’s needs.  In its oral ruling, the court stated the business, business property, personal property, and residence would go to the husband, with the wife having a one-half interest that would “ripen[] on sale. . .” The court did not provide a timeframe for the sale of the property.

The court did not state the property would be held in a tenancy in common in the oral ruling, but the final divorce decree stated the parties would hold the business and properties as tenants in common, but neither share could be sold without the other party’s consent. The final decree also granted the husband the “exclusive use and possession of the properties. . .”  The decree also gave the husband the “exclusive decision making” right with regard to the property, including the right to sell the whole property.

The wife requested reconsideration.  She argued the tenancy in common was not consistent with the husband’s right to exclusive possession and that it did not distribute the property within a specific timeframe. The court modified the decree to state that the wife could require the husband to sell or refinance the residence when the youngest child turned 23, and the business when the youngest child turned 30.  The appeals court noted the child was 13 when the order was entered.

The wife appealed, arguing that the court’s property division did not distribute the property timely.

The appeals court noted that tenancy in common is generally disfavored in a property division, because the parties are often in the same position they would be without a distribution.  The appeals court examined the case law and concluded that tenancy in common should be avoided in the distribution of marital property.  When it is used, it should involve a short term and well-defined interests.

The appeals court noted that the estate was worth more than $1 million, with the largest assets being owned by both parties as tenants in common. The wife had a very limited monthly income, but the value of the assets could prevent her from qualifying for benefits. She did not, however, have the right to use the assets or their value. Her continued ownership in the property could subject her to tax consequences or other liability.

Furthermore, the decree did not provide for a short term for the tenancy in common.  It would continue for several years unless the parties reached some type of agreement or the husband exercised his exclusive rights of decision-making to sell the property.

The appeals court found the court had not made a definite and timely distribution of the property and therefore committed an abuse of discretion. The appeals court reversed and remanded the case.

In this case, the trial court attempted to provide for the children, but did so in a manner that tied up the mother’s interest in the marital property for years.  Property distribution can be a complex and difficult issue.  If you anticipate a contentious property division, you need a skilled Washington high-net-worth divorce attorney on your side.  Call Blair & Kim, PLLC, at (206) 622-6562.

Contact Information