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Question:  5 years ago I purchased a home in Tempe, Arizona (the “Property”) for $400,000.  My girlfriend Sara moved in with me shortly after I purchased the Property.  Everything was going great; and we became engaged after living together for 6 months.  Also, to simplify matters, I added Sara as a joint tenant with rights of survivorship to the Property, granting her an undivided ½ interest in the Property.  Recently, Sara’s younger sister died tragically in a car crash.  The death of Sara’s sister caused great strain on our relationship, and she moved out last month and broke off our relationship.  Yesterday afternoon, I received a demand letter from Sara’s lawyer requesting that I pay Sara $200,000, or ½ of the fair market value of the home, in exchange for a deed from Sara disclaiming her interest in the Property.  What can happen if I ignore this demand letter?

 

Answer:  Assuming the transfer of the ½ undivided interest in the Property was a valid transfer of real property under Arizona law, Sara owns a ½ undivided interest in the Property as a joint tenant with rights of survivorship, meaning the surviving joint tenant would become the absolute fee simple owner of the Property upon the death of the non-surviving joint tenant.  Under Arizona law, a co-owner of real property has a statutory right to file what is called a partition lawsuit, forcing the sale of the subject property, with the proceeds to be allocated to the co-owners according to their respective share therein.  Thus, here, if you ignore the demand letter, Sara has a statutory right to file a partition lawsuit, requesting that the Court force the sale of the Property.  Absent a prior agreement entered into affecting Sara’s legal rights, the Court will likely allow the partition of the Property, subject to any defenses that may apply.  You should consult with a qualified real estate attorney before deciding how to proceed.

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