Joint Tenancy And Community Property In Nevada

Joint Tenancy And Community Property In Nevada

Joint tenancy refers to the concept that two individuals, particularly spouses, are equal owners and operators of a real property. When spouses seek a divorce, a property that is held in joint tenancy would be considered the property of the community. In particular, if the real property was purchased after the marriage, it will be considered community property. Nev. Rev. Stat. § 123.220. Nevada outlines two methods to dispose of property when spouses are getting divorced. If the property is separately owned by one spouse, but the other spouse had made improvements or contributions to the purchase price of the house, then the disposition would follow the rule outlined in Malmquist v. Malmquist. However, if the property is held in joint tenancy, the disposition would follow NRS § 125.150.

Nevada is an equal disposition state, which means that, generally, the property in a divorce proceeding is to be equally disposed. NRS § 125.150(1)(b). However, if there is a showing of a compelling reason set forth in writing, a court may allow an unequal disposition of the property. A compelling reason for an unequal disposition of property primarily refers to a financial reason. See Lofgren v. Lofgren, 112 Nev. 1282, 1284, 926 P.2d 296, 297 (1996); Putterman v. Putterman, 113 Nev. 606, 608, 939 P.2d 1047, 1048 (1997). Nevada is a no–fault divorce state, meaning that there needs to be some “adverse economic impact” to consider marital misconduct as a compelling reason under the statute. See Rodriguez v. Rodriguez, 116 Nev. 993, 997, 13 P.3d 415, 417 (2000); Wheeler v. Upton–Wheeler, 113 Nev. 1185, 1190, 946 P.2d 200, 203 (1997).The importance of this analysis is that real property held in joint tenancy will follow the same method of disposition. NRS § 125.150(2). Thus, a property that is held in joint tenancy will initially be equally disposed if there is no showing of a compelling reason set forth in writing to allow an unequal disposition. Prior to the equal disposition, Nevada law allows reimbursement to the spouse that made improvements to the property using separate funds. NRS § 125.150(2). The reimbursement must not exceed the amount that can be traced, nor can it exceed the value of the property held in joint tenancy at the time of the disposition. Id. The reimbursement is taken “off the top” of the value of the property, of which the remaining value will be equally disposed to each spouse.

Reimbursement is considered by the following metrics: 1) the intention of the parties when they placed the property in joint tenancy; 2) the length of the marriage; and 3) any other factor that the court may determine relevant in evaluating the reimbursement amount. Id. The intention of the parties seeks as to whether the parties intended to gift 50% of the property to the other spouse. The length of the marriage is not entirely dispositive as to determination of reimbursement, but typically, a shorter marriage is more likely to be granted reimbursement compared to a longer marriage. Lastly, the statute allows the court to use any other factor to determine if reimbursement is appropriate. This gives a trial judge broad discretion in his or her decision on reimbursement. 

Joint tenancy under Nevada law follows the same disposition model as other property during a divorce proceeding. Nevada law does allow for reimbursements to be returned to the individual when they use separate property to improve the real property. This amount is taken before the property would be disposed of equally. Thus, Nevada law views a property owned by both spouses as community property, allowing the spouse that used his or her own separate property to be reimbursed.

Thanks to a premises liability lawyer with our friends at Eglet Adams for their insight on joint tenancy and community property in the state of Nevada. If you are facing issues with an injury on a rental property, contact a lawyer near you for help.