A mother, her daughter, and her son-in-law received title to a North Carolina home as joint tenants with right of survivorship. Little did the mother know that she was almost instantly destroying the newborn joint tenancy when, in order to finance the purchase price, she alone executed a mortgage note and deed of trust at the closing. When she died several years later with that mortgage loan in default, a legal dispute arose centered on whether "severance" of the joint tenancy had occurred. Following traditional joint tenancy law theory, the Court of Appeals decided somewhat reluctantly that the joint tenancy was indeed severed at the very closing during which it was successfully created; for by executing the deed of trust, the mother had conveyed "title" according to North Carolina's title theory of mortgage law. Under a common law "four unities" analysis, her execution of the deed of trust unilaterally destroyed the unity of title required for a joint tenancy and automatically converted it into a tenancy in common. Contrary to what was most likely intended as part of an informal family estate and eldercare plan, her fifty percent undivided interest in the home remained in her estate at her death and did not pass by survivorship to her daughter and son-in-law.'
This article addresses key real property and public policy issues triggered by the 1990 legislative reincarnation of the joint tenancy with right of survivorship in North Carolina with a special emphasis on creation and severance issues. It also focuses on piecemeal statutory amendments and revisions to North Carolina joint tenancy law since 1990. The authors' analysis leads to the following conclusions: First, because joint tenancy creation is now intent-based, not unities-based, joint tenancy termination should likewise be intent-based, not unities-destruction-based. Second, unilateral "stealth" severances of joint tenancies are contrary to public policy, unless accompanied by effective prior notice to the other joint tenant or tenants. Third, North Carolina General Statute section 41-2 requires substantial and comprehensive revision to further clarify the contemporary law of joint tenancy in North Carolina. Fourth, substantial improvement in the law's transparency is required in the legislative process if all interested parties, including consumers, are to have a meaningful opportunity to provide input when important real property laws are added, revised, or deleted from the General Statutes.