Posted: August 15th, 2022

Real Property 2

Real Property 2
Issue
The main issue of this case is whether the agreement that Fred and Ethel made is an invalid restraint on alienation. This issue will also help address whether Fred’s action is enforceable such that his action to petition will be granted.
Rule
A contract clause is a provision within a written contract that addresses a particular aspect that relates to the overall subject matter of the agreement. When parties need to add a new clause to an existing contract, they execute an amendment through a lawyer who ensures its enforceability. A good contract needs to highlight the time frames for deadlines, provide recourse in case issues arise, layout compensation and most importantly provide the rights and responsibilities of each party (LegalNature, 2019). Tenancy in common defines the status of two or more individuals as holding either equal or unequal shares, but each person has an equal right to possess the entire property with no right of survivorship. In property law, the term restraint on alienation is a clause that prohibits the selling or transfer of interest on a property. Such clauses are deemed void under common law but are still applicable in cases where they prohibit against the partition of property within a stipulated period, where they offer right of first refusal, and in cases where public parks and gardens are being established.
Tennessee law categorically states that any person in possession of an estate as a tenant in common with co-tenants is entitled to partition the property or sell the property for partition (Court Listener, n.d.). As such, in a similar case to this; Connie McGahey v. James Wilson (2001), McGahey and Wilson had purchased land together as tenants whilst they were married. Upon their divorce, they entered into an amicable property settlement agreement that included a provision that the property could not be sold unless both parties gave consent. When McGahey sort an action to partition fifteen years later, the special master appointed to the case found the agreement unenforceable since it violated public policy. After an appeal, the appellate court affirmed this decision but highlighted that the restriction was unenforceable only because the settlement agreement did not provide any time limitation regarding the restriction, and that the agreement does not also indicate the reason both parties agreed to the restriction, which was contrary to the decision of the lower court that the restriction violated public policy.
Application
Fred, the plaintiff, seeks to partition the property since he wants money from selling half of the Gatlinburg condo. Ethel, the defendant, refused to partition although she cannot afford to buy Fred out. Furthermore, Fred maintains that the restraint on alienation is invalid. The court, therefore, will need to apply the factors established in McGahey v. Wilson, 2001 to determine the case. Due to the lack of specificity in time duration, the clause is not expressed adequately enough to be enforceable. Additionally, Fred and Ethel purchased the condo as tenants by the entirety, they later got divorced, at which point their tenancy status changed to tenancy in common. Based on Tennessee law, tenancy in common can attract a partition to the property based on the facts of the case.
Conclusion
Based on Tennessee law as well as precedents from McGahey v. Wilson (2001), it is probable that the court will rule in favor of Fred whereby the agreement between him and Ethel is invalid and that he is entitled to partition the property or sell the property for partition.
References
Court Listener. (n.d.). Connie McGahey v. James Wilson? Retrieved from https://www.courtlistener.com/opinion/1071857/connie-mcgahey-v-james-wilson/
LegalNature. (2019, October 18). Amending A Contract: When And Why | LegalNature. Retrieved from https://www.legalnature.com/guides/amending-a-contract-when-and-why

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