Tenancy in Common (TIC)
Candlefocus EditorA key feature of Tenancy in Common is the right for each individual owner to pass on their fractional interest to their next-of-kin, or any other named beneficiary, in the event of their death. In other words, even after the death of one owner, the other surviving owners can still maintain their equity stake in the property. As with any form of real estate ownership, Tenancy in Common is bound by the same rights, regulations, and restrictions as prescribed by state and local laws.
Tenancy in Common is often confused with two other forms of ownership: Joint Tenancy and Tenancy by Entirety. Joint tenancy works similarly to tenancy in common in terms of the right to assign fractional ownership shares. However, unlike tenancy in common, joint tenants share an equal, undivided interest in the property. On the other hand, Tenancy by Entirety applies only to married couples who are both buying the property at the same time. Under this agreement, each spouse has a separate title to half of the property, but if one spouse dies or files for divorce, the entire property automatically devolves onto the other spouse.
Overall, Tenancy in Common is an attractive way for two or more people to enter into an agreement and become co-owners of a property. Its flexible nature makes it well-suited for various situations, such as friends that are making a real estate investment together or when a single parent wishes to share ownership of a home with their child. As tenants in common, all owners have the same rights over the property, including the right to occupy it, lease it out, or sell it, provided all owners agree. It’s important to note, however, that while tenants in common are allowed to freely dispose of their own fractional share in the property, they may not do so collectively on behalf of the other tenants.