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Issue  24  Article  60
Published:  7/1/1997

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Whatley v. Whatley, Tenancy in Common by Encroachment
Chris Burti, Vice President and Legal Counsel

Whatley v. Whatley, North Carolina Court of Appeals, No. COA96-641,(May 6, 1997) is a recent decision that appears to break new ground in the area of disputes concerning the right of owners in common to bring partition proceedings. The facts of the case are somewhat unusual and produced a very interesting opinion for real property practitioners. The petitioner filed an action for partition by sale of a building and the two tracts of land upon which it is located. The parties stipulated, by consent order, that one tract was owned by petitioner and respondents as tenants in common with a 2/9 undivided interest and 7/9 undivided interest respectively. They further stipulated that the other tract was owned solely by the respondents and the building located on both tracts was owned solely by the petitioner. The trial court found that the respective interests of the parties were ‘not alienable in piecemeal fashion’ that if divided all of the parties would receive a share with a value materially less than if sold, that a division would materially impair the rights of all the parties as co-tenants and ordered a partition sale. The trial court’s consideration of evidence included an affidavit of Don R. Castleman, a professor of law at Wake Forest University School of Law which stated in part ‘In my opinion, the agreement and order must be viewed as having treated the two tracts and the building as a single parcel, owned in undivided interests as tenants in common. Otherwise, the petitioner would own a building, part of which is situated on someone else’s land and her title, because of uncertainty as to the nature of her tenancy on the surface on the underlying land, would be unmarketable. Likewise, the respondents would own a tract of land upon which sits a building owned by another, whose ownership is confirmed by the court, and thus the title to their land, because of the uncertainty as to their right to the possession and use thereof, would be unmarketable. Thus, neither party would have freely marketable title and this would restrict the free alienability of both properties and would be contrary to public policy in North Carolina’. Among the findings of fact the trial court found that ‘[a]s to those portions of Tract[s] One and Four on which the building lies, a vertical tenancy in common exists which renders the building unmarketable’. The trial court then concluded that the parties were tenants in common to both tracts and the building, that the cloud on title created by the encroachment rendered both tracts and the building unmarketable leaving partition sale as the only proper remedy. The court of Appeals then affirmed after a discussion of the facts.

It is interesting to note that the Court of Appeals never used the term "encroachment" in its opinion nor did it give any guidance as to how to value the ‘vertical tenancy in common ’ in order to determine the respective shares of the proceeds of the sale and the opinion does not indicate if this was addressed at the trial level. A tenant in common has the same right to erect a building on the common property as sole fee owners would have on their property as long as it does not impair the other common interests and the tenant in common would have the right to remove it if removal would not cause damage or would be entitled to betterment upon partition (see P. Hetrick & J. McLaughlin, Webster's Real Estate Law in North Carolina 118, at 134 (3rd ed.1988)).

On the other hand mandatory injunctive relief is available for the removal of an encroachment of a building of only one square foot. "[S]ince the encroachment and continuing trespass have been established, and since defendant is not a quasi-public entity, plaintiff is entitled as a matter of law to the relief prayed for, namely removal of the encroachment. "Williams v. South & South Rentals, Inc., 346 S.E.2d 665, 82 N.C.App. 378, (1986). In Whatley it seems that the petitioner is as much a stranger to the title of the parcel owned solely by the respondents as the defendant in Williams and that the respondents would have been entitled to the same relief. It would seem to be a logical inference that when a stranger to a title erects a building encroaching on the adjoining owner each property, therefore, becomes inalienable in the same way as in Whatley. Therefore, in light of this holding, Professor Castleman’s comments on public policy would seem to apply equally to an encroachment case. It could then be argued logically that a ‘vertical tenant in common’ is created when strangers to the title are involved if it is created when the encroaching building owner is a tenant in common and his co-tenants own the encroached upon tract

Admittedly the consent order before the trial court may have contained unusual stipulations that gave rise to this decision but, if so, the opinion did not set them forth or discuss them. The appellate court did not cite any cases in support of what appears to be a very innovative legal theory and if our Supreme Court affirms or adopts this ruling it could well be that

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