Tenants in Common: A Flexible Ownership Option for Multiple Investors

Updated October 30, 2023
10 min read
Tenants in Common: A Flexible Ownership Option for Multiple Investors


You may be aware of myriad options for taking ownership of real estate property, each offering a distinct structure with varying ownership rights. It is crucial to understand the implications prior to making a selection, as there can be legal and tax consequences. The consequences can be difficult or impossible to unwind easily or change afterward. Explore the pros and cons of tenants in common, how to pass your share in the event of your death, and how to find the right lawyer to advise you.

What Is Tenancy in Common

There are many ways for married couples or individuals to own real estate property. Different methods of ownership carry specific rules about the division of each owner's interest and the succession of that share at death. It is important to seek competent legal counsel prior to acquiring title to a real estate interest, as it can have far-reaching and irrevocable legal and tax ramifications.

One of the methods of real estate property ownership is tenants in common (also known as TIC), which allows two (or more) people to co-own property. A notable feature of tenants in common is that the co-ownership can be made up of equal or unequal shares. 

The Rights To the Property of Tenants in Common

In a tenants in common agreement, every owner is given the right to access the property. They also have the entitlement to use the place. It's important to note, however, that these rights are provided regardless of the size of their specific ownership share.

Top three reasons to select tenants in common

  1. Ease of ownership: This method may make it possible for real estate to be acquired by multiple owners who cannot afford it alone.

  2. Flexible duration: The number of owners can change over time. For example, newlyweds may purchase a property with their parents on the title initially, then elect to go on their own when they can afford the mortgage and property taxes. 

  3. Flexible share: Various owners may own different portions of the property; an allotment of equal shares is not required.

Top three reasons tenants in common may not be for you

  1. All owners are presumed to be equally responsible for the mortgage, property taxes, maintenance, repairs, and all other costs associated with home ownership.

  2. Any of the owners may force the sale of the property. A mutual agreement or a majority vote is not required.

  3. If a co-owner passes away, you do not inherit the deceased owner's share as a matter of law.

How To Ensure Proper Inheritance

It is important to create a comprehensive estate plan, such as a trust, will, and power of attorney. If you intend to co-own property with other owners, setting up an estate plan may be even more vital. Consult an estate planning attorney in your area to get a detailed plan that will ensure the proper transition of your assets in case of death. 

Bequeathing a Share of Property

Unlike joint tenancy, which allows your portion to be inherited by the other surviving owners, with tenancy in common, you can direct your share to the beneficiary of your choice — a spouse, child, or friend. When considering matters of death and inheritance, it is usually best to create a comprehensive estate plan that includes a trust and a will, thereby bypassing your state's probate process. 

Why Ensure Co-Owners Have Estate Plan

If a co-owner passes away, the deceased owner's interest in the property will be allocated to their beneficiaries, not the surviving co-owners. Therefore, for example, you may be forced to manage and co-own this asset with the deceased individual's surviving spouse or children. 

It is important to discuss this potential eventuality with your co-owners prior to acquisition. Another essential step is to designate a succession plan to keep things running smoothly and protect your interest going forward.

Get yourself a tenants in common agreement template, and check out the best practices collected by top-rated attorneys. 

What if I don't specify the type of ownership when acquiring a real estate holding?

In some states, it may be presumed that your ownership is tenants in common unless it has been outlined in writing. Consider seeking competent legal advice to select the right method of holding a title. 

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How To Choose the Right Attorney

Providing specific directions about taking the title when purchasing a new home or investment property is the dispensation of legal advice. For that reason, you may find that your realtor, lender, or escrow and title agent is not able to tell you which approach is the most suitable. Most attorneys practice in narrow, specialized areas, so understanding what you're looking for can help.

While a recommendation from a friend, co-worker, or family member is an ideal way to find the right expert, this isn't always possible. As you consider options for legal counsel, keep an eye out for the following attributes:

  1. Relevant knowledge and experience. Make sure that real estate law is a primary pillar of the attorney's practice. Consult your state's Bar Association to check on an attorney's education and confirm that they are in good standing. 

  2. Consistent and effective communication. Look for a law firm that is responsive and client-oriented, with lawyers who use layperson's terms to explain complex concepts. 

  3. Professionalism. Having your best interests at heart and managing client interactions with respect is a key indication that you are in good hands.

Knowledge is power. So, arm yourself with the right information before signing on the dotted line.

Article by
Zakiya J. Norton and Somita Basu
Norton Basu LLP

Zakiya J. Norton is a big-picture thinker who practices with precision, sharp insight, and a touch of humor. Zakiya delivers innovative, top-notch advice in terms everyone can understand. Known for her ability to grasp the family history and personal intentions that inform each estate plan, she offers compassionate counsel and no-nonsense legal strategies in her affable, straightforward speaking style.

Somita Basu has a knack for unraveling legal, financial, and mathematical mysteries while paying meticulous attention to detail. Always analytical and objective, her tactical methods allow her to identify the optimal way to achieve any goal. With a thorough, hands-on approach, Somita expertly advises on complex matters with diligence and grace.

Frequently Asked Questions

What is tenants in common (TIC)?

Tenants in common is a form of ownership where multiple people can own property together, with each individual owning a specific share. These shares need not be equal, and owners can dispose of their shares independently.

How is tenants in common different from joint tenancy?

Unlike joint tenancy, where owners have an equal share in the property, tenancy in common allows owners to have different ownership percentages. In joint tenancy, if one owner dies, their share automatically goes to the surviving owner(s). In TIC, however, the deceased owner's share can be passed to a beneficiary of their choosing.

Can a tenants in common agreement be terminated?

A tenants in common agreement can be terminated if all parties agree to sell the property or if one party initiates a partition action in court. In such cases, if the property cannot be physically divided (like a building), it may be sold, and the proceeds divided among the owners based on their ownership percentages.

Can a tenant in a tenants in common agreement use the entire property?

Yes, all tenants have the right to use and enjoy the entire property, even though they each own a specific fraction of it. But in practice, things can become complicated if some tenants use substantially more of the property than others, so it's advisable to have an agreement detailing the rights and responsibilities of each tenant.

Article by Zakiya J. Norton and Somita Basu