“Remember always that all of us…are descended from immigrants and revolutionists.”
– Franklin D. Roosevelt

Being a Tenant in Common (TIC) means sharing ownership of a property with one or more other individuals or entities.  

 

  • Shared Ownership: Multiple parties have an ownership interest in the same property.
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  • Unequal Shares are Possible: Unlike joint tenancy (JTWROS) where ownership shares are equal, in a TIC, owners can hold different percentages or proportional shares of the property. For example, one owner might own 75% and the other 25%.
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  • Undivided Interest: Even if ownership shares are unequal, each tenant in common has the right to occupy and use the entire property, not just a specific portion corresponding to their ownership share.
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  • No Right of Survivorship: This is a crucial difference from joint tenancy. If one tenant in common dies, their share of the property does not automatically pass to the surviving co-owner(s). Instead, their share becomes part of their estate and is distributed according to their will or, if there’s no will, according to state intestacy laws.
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  • Flexibility: A TIC allows owners to sell, transfer, or borrow against their individual share of the property without needing consent from the other co-owners, unless there are specific restrictions in the agreement (which there should be).
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  • Liability: Tenants in common are generally jointly and severally liable for property-related expenses like taxes and repairs. Only those who signed the Promissory Note and Deed of Trust (commonly referred to as a mortgage) are liable payments. That means Tenants in common added after the initial purchase do not have the risk of default being reported on their credit history because such Tenants did not sign the Note.
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  • Warning. Potential for Disputes: Since individual interests can be transferred, a co-owner might end up sharing ownership with someone they don’t know or agree with. 

In summary: Tenancy in Common offers flexibility in ownership percentages and provides the ability to pass on your share to your heirs. However, it lacks the automatic transfer of ownership upon death that characterizes joint tenancy. The choice between JTWROS and TIC depends on the specific needs and circumstances of the co-owners.