Detailed Definition§
Tenancy in Common (TIC) is a legal arrangement in property ownership where two or more parties hold an interest in a parcel of real estate with each party owning a specified share. These shares can be equal or different and can be freely transferred to others. Importantly, TIC does not provide the right of survivorship. This means when one of the co-owners dies, their interest in the property is transferred according to their will or by the state laws of inheritance, rather than automatically passing to the surviving co-owners.
Examples§
- Equal Shares TIC: Alice and Bob purchase a vacation home as Tenants in Common, each owning 50% of the property. Alice can pass her 50% interest to her daughter via her will, while Bob retains his 50% share.
- Varying Shares TIC: Charlotte, David, and Eva buy an investment property. Charlotte owns a 25% share, David owns a 50% share, and Eva owns the remaining 25%. Upon Charlotte’s death, her 25% share will be distributed as per her will, without affecting David’s or Eva’s ownership.
Frequently Asked Questions (FAQs)§
What happens to the ownership share when a TIC co-owner dies?§
Ownership shares in Tenancy in Common do not automatically pass to the surviving co-owners. Instead, the decedent’s share is transferred according to their will or under state inheritance laws.
Can I sell my share of the property independently if I’m in a TIC arrangement?§
Yes, each co-owner in a TIC arrangement can sell, give away, or bequeath their share independently of the other co-owners.
Is there a limit to the number of owners in a Tenancy in Common?§
No, there is no legal limit to the number of owners in a Tenancy in Common arrangement.
What is an undivided interest in a Tenancy in Common?§
An undivided interest means each co-owner has equal rights to use and possess the entire property, even though they only own a specific share of it.
How is the maintenance cost of a TIC property managed?§
Maintenance costs and property taxes are usually divided proportionately among the co-owners based on their ownership percentage.
Related Terms and Definitions§
- Undivided Interest: The concept in co-ownership whereby each owner has a right to use the entire property, notwithstanding the divided nature of ownership shares.
- Right of Survivorship: This allows co-owners to automatically inherit the share of a deceased co-owner (not applicable in TIC).
- Joint Tenancy: A form of co-ownership where co-owners have equal shares and the right of survivorship.
- Partition: A legal process to divide property among co-owners, which can end a Tenancy in Common arrangement.
- Syndication: A method of pooling funds from multiple investors to purchase real estate.
- Tenancy by the Entirety: A form of co-ownership available only to married couples, including the right of survivorship.
Online Resources§
- Investopedia - Tenancy in Common
- NOLO - Tenancy in Common Basics
- The Balance - Understanding Tenancy in Common
Suggested Books for Further Studies§
- “Real Estate Law” by Marianne M. Jennings: A comprehensive book that gives an insight into various facets of property law, including tenancy in common.
- “Principles of Real Estate Practice” by Stephen Mettling and David Cusic: This book covers the fundamental principles of real estate, making it a useful resource for understanding different ownership structures, including TIC.
- “Modern Real Estate Practice” by Fillmore W. Galaty, Wellington J. Allaway, and Robert C. Kyle: A detailed resource for real estate students and professionals, offering in-depth knowledge on tenancy in common and other forms of property ownership.
Fundamentals of Tenancy in Common: Real Estate Law Basics Quiz§
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