True Joint Tenancy and Joint Tenant Offsets Under Milian v. De Leon (1986) 181 Cal.App.3d 1185
Milian v. De Leon, a case from the Inland Empire, is one of the most fascinating cases in California partition actions in that it found that, “once the court in a partition action has determined that a true joint tenancy exists, it may not order reimbursement or contribution on account of differences in the amounts the parties have paid toward the initial acquisition of the property.” Milian v. De Leon (1986) 181 Cal.App.3d 1185, 1195. Effectively, a true joint tenancy is similar to community property in a marriage in that each party’s contributions and expenses come from a common pool such that neither is entitled to reimbursement upon a divorce.
Can a Joint Tenant Get Back a Larger Down Payment?
Take a common example. An unmarried couple buys a house and takes title as joint tenants. One partner pays $90,000 of a $100,000 down payment, the other pays $10,000, and they split the mortgage payments evenly. They later break up, and the house is sold in a partition action with $500,000 of equity left after the loan is paid off.
- If the court finds a true joint tenancy: each partner receives $250,000. Under Milian, there is no reimbursement for the unequal down payment.
- If the court finds the couple did not truly intend equal ownership: the court can return each partner’s down payment first ($90,000 and $10,000) and split the remaining $400,000 equally, so the partners receive $290,000 and $210,000. The court may instead set ownership shares in proportion to what each paid.
That $80,000 swing is why the true joint tenancy question matters so much. For more on this situation, see I Paid the Down Payment and Mortgage. Does My Ex Get Half?
True Joint Tenancy in a Partition Action
The case involved a partition action between an unmarried couple who “had agreed to pool their resources or some of them to acquire the property in dispute and had agreed to own it equally irrespective of their individual contributions to the purchase price and expenditures for improvements to and maintenance and preservation of the property.” Milian v. De Leon (1986) 181 Cal.App.3d 1185, 1191. Importantly, the property was held in joint tenancy, not in tenancy in common.
California Civil Code 683(a) defines a joint tenancy as:
A joint interest is one owned by two or more persons in equal shares, by a title created by a single will or transfer, when expressly declared in the will or transfer to be a joint tenancy, or by transfer from a sole owner to himself or herself and others, or from tenants in common or joint tenants to themselves or some of them, or to themselves or any of them and others, or from spouses, when holding title as community property or otherwise to themselves or to themselves and others or to one of them and to another or others, when expressly declared in the transfer to be a joint tenancy, or when granted or devised to executors or trustees as joint tenants.
A joint tenancy “requires unity of interest, unity of title, unity of time, and unity of possession.” McDonald v. Morley (1940) 15 Cal.2d 409, 412. In addition to meeting these four unities, a joint tenancy also contains the right of survivorship. If a joint tenant passes away, his or her interest ends and the surviving joint tenants keep the whole property. If only one joint tenant survives, that person becomes the sole owner. Indeed, California’s default manner of co-ownership is a tenancy in common, making joint tenancy a relatively rare occurrence.
Factors to Find a True Joint Tenancy
A common example of a “true joint tenancy” is when an unmarried couple purchases a home together in joint tenancy and treats their finances like a marriage. As Milian explained, a true joint tenancy may be found where an unmarried couple “both contributed significant financial resources and nonfinancial efforts to the acquisition of the home, furnishings, appliances, improvements, decoration and landscaping.” Milian v. De Leon (1986) 181 Cal.App.3d 1185, 1198. Examples may include where one party pays the mortgage while the other pays other household expenses. Either way, both joint tenants are equal owners of the property. If the court finds they agreed to share equally no matter who paid what, neither may claim reimbursement for paying more.
Courts look at the whole relationship, not only the deed. In Alderson v. Alderson (1986) 180 Cal.App.3d 450, 461, the Court of Appeal found that an unmarried couple had “impliedly agreed to share equally in their acquisitions” based on evidence that they held themselves out as husband and wife, pooled their money to buy the properties, decided on the purchases together, and both worked on the properties. In Milian, the key facts were that the couple planned to marry and that each contributed what he or she could.
Accounting in a True Joint Tenancy
A partition action between tenants in common typically allows for an accounting of offsets, including reimbursements for improvements, repairs, mortgage payments, and more. Tenancy in common does not require that all co-owners own equal shares of a home. By contrast, the Milian court found that, “by definition joint tenancy ownership means equal ownership (see Civ. Code, § 683), and in the absence of an agreement for reimbursement we are unaware of any authority which authorizes reimbursement on account of unequal contributions to the down payment.” Milian v. De Leon (1986) 181 Cal.App.3d 1185, 1195.
Indeed, “once the court in a partition action has determined that a true joint tenancy exists, it may not order reimbursement or contribution on account of differences in the amounts the parties have paid toward the initial acquisition of the property.” Milian v. De Leon (1986) 181 Cal.App.3d 1185, 1195.
That rule is narrower than it sounds. It covers only unequal payments toward buying the property, such as the down payment. Milian confirmed the ordinary rule that a co-owner who pays more than his or her share of property taxes, mortgage payments, or other charges, spends money to preserve the property, or makes improvements with the other owner’s consent is entitled to contribution and, in a partition sale, to reimbursement before the proceeds are divided (Milian, at p. 1194). Code of Civil Procedure section 872.140 (CCP 872.140) likewise allows the court to “order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity.” The couple in Milian lost those later credits only because the court found they had agreed to own the home equally no matter who paid what.
Exceptions Allowing for an Accounting in Joint Tenants
A number of exceptions exist that do allow an accounting between joint tenants.
1. Agreement for reimbursement
This is the biggest exception. Milian expressly says that if one joint tenant advanced funds on behalf of the other and there is an agreement for reimbursement upon sale, the court can enforce that agreement.
That agreement can be express, and potentially implied depending on facts, but Milian itself found the opposite: an implied agreement to own and divide equally regardless of exact contributions to acquisition, improvements, maintenance, and preservation.
2. The title says “joint tenancy,” but the court finds it was not a true joint tenancy
This is the most important litigation path. Milian explains that in partition, all parties’ interests may be put in issue regardless of record title, and the court may consider unequal contributions in deciding whether a true joint tenancy was actually intended. If the court finds a tenancy in common or different beneficial interests, it may order reimbursement or determine ownership interests proportionately.
The deed is the starting point. A joint tenancy deed “creates a rebuttable presumption that it is held in joint tenancy,” and that presumption “cannot be overcome by testimony of the hidden intentions of one of the parties, but only by evidence tending to prove a common understanding or an agreement that the character of the property was to be other than joint tenancy.” Machado v. Machado (1962) 58 Cal.2d 501, 506.
That is where cases like Demetris v. Demetris (1954) 125 Cal.App.2d 440 and Kershman v. Kershman (1961) 192 Cal.App.2d 23 fit. Milian distinguished Demetris because the joint tenancy deed was reformed into a tenancy-in-common deed before reimbursement was ordered. Our summary of Demetris v. Demetris explains how that father undid a mistaken joint tenancy deed and was repaid his extra down payment.
3. Post-severance / tenancy-in-common period
A severance of joint tenancy ends the joint tenancy, making the parties tenants in common going forward. Milian notes that an interlocutory judgment of partition has the same effect: it severs the joint tenancy, so the owners are tenants in common from then on (Milian, at p. 1196). Once the case is operating under tenancy-in-common principles, ordinary accounting rules become much easier to apply.
Practically, this matters for expenses incurred after severance, after filing if severance occurred independently, or after interlocutory judgment. Those should not be treated as “initial acquisition of a true joint tenancy.”
4. Exclusive possession / rental value as a defensive offset
A cotenant generally cannot simply sue the cotenant in possession for rent merely because one lived there and the other did not. But Hunter v. Schultz (1966) 240 Cal.App.2d 24 allows the out-of-possession cotenant to use reasonable rental value defensively against the occupying cotenant’s claims for contribution for mortgage interest, taxes, insurance, preservation, or similar expenses.
So the rule is not “occupancy always creates rent.” It is closer to the idea that there is no affirmative rent claim absent agreement/ouster, but rental value may offset the in-possession cotenant’s reimbursement claims.
One caution from Milian: the owner living in the home there paid the mortgage, insurance, taxes, and maintenance after the couple broke up, and the court held there was no need to weigh those payments against the home’s rental value. The couple’s agreement to own the home equally did not end when they separated (Milian, at p. 1199).
5. Ouster or hostile exclusion
If there is wrongful ouster, rental-value liability becomes much stronger. Milian noted that the trial court found no wrongful ouster, so Milian was not accountable for reasonable rental value. That implies the opposite fact pattern may support a rental-value charge.
6. Improvements may be different from acquisition contributions, but Milian is dangerous
For tenants in common, good-faith improvements that enhance value can be credited, usually by enhanced value rather than raw cost. Wallace v. Daley (1990) 220 Cal.App.3d 1028 confirms credits for value-enhancing improvements in ordinary partition accounting.
Joint Tenant Offsets in Partition Actions: The Bottom Line
To summarize, when a court finds a true joint tenancy, neither owner can be reimbursed for paying more toward the purchase, because joint tenants own equal shares. Later payments for the mortgage, taxes, insurance, and preservation can still be credited unless, as in Milian, the court finds the owners agreed to share equally no matter who paid what. The concept of a true joint tenancy can be a powerful tool for co-owners who have made contributions to the relationship outside the context of the property where their other co-owner made payments directly tied to the property.
Talkov Law Partition Attorneys Can Help
If your co-owner, or an attorney you consulted, says you cannot recover what you paid because title is held in joint tenancy, do not assume that is the end of the question. Whether you paid most of the down payment, carried the mortgage, taxes, and insurance, or made improvements, the answer depends on whether a true joint tenancy exists and what the two of you agreed.
Talkov Law can help. With 12 full-time partition attorneys and experience in over 650 partition actions throughout California, our team handles every step, from filing to the referee’s accounting to the final distribution of sale proceeds. Call (877) PARTITION (727-8484) today or contact us online for a free consultation.
