A tenancy by the entirety is a form of joint property ownership, available only to spouses, that is created when a husband and wife take title to real or personal property “under a written instrument designating both their names as husband and wife.”  Case law has recognized that property held as tenants by the entirety results in each spouse having the right and possession of the entire estate. While a tenant by the entirety may alienate his right of survivorship, neither tenant may unilaterally force a partition of the property during the marriage.

Raul Jimenez and his wife Gwyn owned a tract of undeveloped real property as tenants by the entirety. In 2011, plaintiffs sued the husband, seeking repayment of loans they had made to him. The case was settled in 2014, with the husband agreeing to pay the plaintiffs $225,000.

The husband failed to make the payment, and the plaintiffs sought but were unable to levy on the husband’s other assets. Therefore, plaintiffs filed a motion to compel the partition and forced sale of the undeveloped real property. The husband opposed the motion, claiming that it was prohibited by New Jersey statute.

The motion judge recognized that, under prior New Jersey case law, a creditor would be able to force a partition and sale of property held as tenants by the entirety, depending on the relative equities involved in the case. However, the judge concluded that the aforementioned statute now prohibits this remedy.

The plaintiffs appealed, and the decision was affirmed.

The Appellate Division conceded that, prior to the adoption of N.J.S.A. 46:3-17.4, a court could compel partition and sale of one spouse’s interest in a tenancy by the entirety, where such relief was justified based on equitable considerations. In the instant case, the Appellate Division acknowledged that equitable considerations favored partition in this case: the parcel in issue was not a marital residence; the loans in issue were related to anticipated development of the parcel; and the plaintiffs had made considerable efforts to recover the judgment from other sources.

Nevertheless, the appeals court agreed that the N.J.S.A. 46:3-17.4 barred the relief. N.J.S.A. 46:3-17.4 provides, in part, as follows:

Neither spouse may sever, alienate, or otherwise affect their interest in the tenancy by entirety during the marriage or upon separation without the written consent of both spouses.

This portion of the statute had never been interpreted in a published New Jersey opinion where a third-party creditor is attempting to force the partition and sale. Here, although the court noted that the statutory language dictates that “neither spouse” may alienate property, and the plaintiffs were creditors, not spouses, of the debtor, the statute applies where one spouse’s unpaid debts result in a judgment against him alone: “Otherwise, a free-wheeling spouse, by amassing such individual debt, could detrimentally affect the other spouse’s interest in their co-owned property.”

A copy of Jimenez v. Jimenez can be found here – Jimenez v. Jimenez

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