Definition
Tenancy in Common (TIC) is a form of property ownership where two or more individuals share ownership of a property, each holding a separate, undivided interest that can be of equal or unequal proportions. Unlike other joint ownership structures, each co-owner has the right to sell, transfer, or will their share independently, without needing approval from the other owners.
Explanation
TIC ownership is commonly used by unmarried couples, business partners, or investors who want to own real estate together while maintaining individual control over their share.
Key features of Tenancy in Common include:
- Ownership shares can be unequal – One owner can hold 60% while another holds 40%, or any other proportion.
- No right of survivorship – If one co-owner dies, their share passes to their heirs or beneficiaries, not automatically to the other owners.
- Each owner can sell or transfer their share freely – Unlike joint tenancy, TIC does not require consent from co-owners to sell or transfer ownership.
- Shared financial responsibility – All owners must contribute to property expenses (mortgage, taxes, maintenance) based on their ownership percentage.
TIC agreements are commonly used for investment properties, vacation homes, and family inheritance situations, where multiple parties wish to own a property together while maintaining individual rights over their share.
Example
Three investors purchase a $900,000 rental property as Tenants in Common:
- Investor A owns 50% ($450,000 investment).
- Investor B owns 30% ($270,000 investment).
- Investor C owns 20% ($180,000 investment).
Each investor is responsible for their proportionate share of expenses and receives rental income based on their ownership percentage. If Investor C wants to sell their share, they can do so without permission from Investors A and B, and their portion would go to the buyer or their heirs if they pass away.