hard · National Real Estate Exam property-ownership
In a lien-theory jurisdiction, an owner holds a property as a joint tenant with two others.
If this owner takes out a second mortgage on their interest and then dies intestate, what happens to the deceased owner's interest?
- The joint tenancy automatically converts into a tenancy by the entirety for the two remaining surviving co-owners.
- The interest passes to the surviving joint tenants by operation of law, potentially extinguishing the lender's security interest.
- The lender may foreclose upon the entire property, including the shares of the other joint tenants, to collect the debt.
- The interest passes by the laws of intestate succession to the deceased owner's heirs, who become tenants in common with the two survivors.
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