# Tenancy in Common Explained: Differences, Benefits, and Comparisons

![Tenancy in Common](https://www.investopedia.com/thmb/R5OJxH107YjY-PMmSkyKiPwzQ90=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/TenancyinCommon_INV-747181d302d84b9f9023f5f22031e840.jpg)

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## What Is Tenancy in Common (TIC)?

Tenancy in common (TIC) allows multiple parties to hold ownership interests in a property, offering flexibility in ownership percentages. However, unlike joint tenancy, TIC does not grant rights of survivorship, meaning a deceased owner's share passes to their estate rather than other co-owners. Recognizing the distinctions between TIC, joint tenancy, and tenancy by entirety can guide you in making informed decisions about property ownership.

Tenancy in common is one of three types of shared ownership. The others are joint tenancy and tenancy by entirety.

### Key Takeaways

*   Tenancy in Common (TIC) allows multiple parties to own a percentage of a property, but it does not include rights of survivorship.
*   TIC owners can independently manage, sell, or transfer their share of the property, passing it on to heirs as desired.
*   Disputes can arise in TIC arrangements due to unequal use of the property despite each owner's equal access rights.
*   Tenancy by entirety and joint tenancy are alternative forms of shared property ownership, each with different rights and obligations.
*   Property taxes for TIC arrangements are often shared, with each owner potentially liable for the full amount due to joint-and-several liability.

## Understanding How Tenancy in Common Functions

Owners as tenants in common share interests and privileges in all areas of the property but each tenant can own a different percentage or proportional financial share.

Tenancy in common agreements can be created at any time. An additional individual can join as an interest in a property after the other members have already entered into a TIC arrangement. Each tenant can also independently sell or borrow against their portion of ownership.

> **Important**
>
> A tenant in common can't claim ownership to any specific part of the property even though the percentage of the property owned can vary.

A deceased tenant's or co-owner's share of the property passes to their estate when they die rather than to the other tenants or owners because this type of ownership doesn't include rights of survivorship. The tenant can name their co-owners as their [estate beneficiaries](https://www.investopedia.com/terms/b/beneficiary.asp) for the property, however.

## How to Dissolve a Tenancy in Common Arrangement

To dissolve the tenancy in common, one or more tenants can buy out the others through a joint legal agreement. If tenants can't reach an agreement, a partition action may occur voluntarily or be court-ordered.

A court will divide the property as a partition in kind in a legal proceeding, separating the property into parts that are individually owned and managed by each party. The court won't compel any of the tenants to sell their share of the property against their will. 

The tenants may consider entering into a partition of the property by sale if they can't agree to work together. The holding is sold in this case and the proceeds are divided among the tenants according to their respective shares of the property.

## Navigating Property Taxes in a Tenancy in Common

A tenancy in common agreement doesn’t legally split the property, so tax jurisdictions usually issue a single property tax bill instead of dividing it based on ownership percentages. Tenants usually receive one tax bill for the entire [property](https://www.investopedia.com/terms/p/propertytax.asp).

Many jurisdictions impose joint-and-several liability on TIC tenants, making each owner potentially liable for the full tax bill. The liability applies to each owner regardless of the level or percentage of ownership.

Tenants can deduct payments from their [income tax](https://www.investopedia.com/terms/i/incometax.asp) filings. Each tenant can deduct the amount they contributed if the taxing jurisdiction follows joint-and-several liability. They can deduct a percentage of the total tax up to their level of ownership in counties that don't follow this procedure.  

## Exploring Alternative Tenancy Arrangements

Besides tenancy in common, joint tenancy and tenancy by entirety are two common shared ownership forms.

### An Overview of Joint Tenancy

In joint tenancy, tenants receive equal shares of a property under the same deed at the same time. Each owns 50% if there are two tenants. If one tenant wants to buy out the other, the property must be sold, and proceeds distributed equally.

The ownership portion passes to the individual's estate at death in a tenancy in common. The title of the property passes to the surviving owner in a joint tenancy. This type of ownership comes with rights of survivorship.

Some states set joint tenancy as the default property ownership for married couples. Others use the tenancy in common model.

### Understanding Tenancy by Entirety

In some states, [tenancy by entirety](https://www.investopedia.com/terms/t/tenancy-by-the-entirety.asp) (TBE) is used, where the property is considered owned by one entity. In TBE, each spouse has an equal, undivided interest in the property.

Unmarried parties both have equal 100% interest in the property as if each is a full owner.  

> **Fast Fact**
>
> Contract terms for tenancies in common are detailed in the deed, title, or other legally binding property ownership documents.

## Advantages and Disadvantages of Tenancy in Common

Buying a home with a family member or a business partner can make it easier to enter the [real estate market](https://www.investopedia.com/articles/mortages-real-estate/11/factors-affecting-real-estate-market.asp). Dividing deposits, payments, and maintenance make real estate investment less expensive.

All borrowers sign and agree to the loan agreement when mortgaging property as tenants in common, however. The lender may seize the holdings from all tenants in the case of [default](https://www.investopedia.com/terms/d/default2.asp). The other borrowers are still responsible for the full payment of the loan if one or more borrowers stop paying their share of the mortgage loan payment.

Using a [will](https://www.investopedia.com/terms/w/will.asp) or other estate plan to designate beneficiaries to the property gives a tenant control over their share but the remaining tenants may subsequently own the property with someone they don't know or with whom they don't agree. The heir may file a partition action, forcing the unwilling tenants to sell or divide the property.

Pros

*   Facilitates property purchases
    
*   The number of tenants can change
    
*   Different degrees of ownership are possible
    

Cons

*   No automatic survivorship rights
    
*   All tenants are equally liable for debt and taxes
    
*   One tenant can force the sale of property
    

## Real-World Example: Tenancy in Common in Action

California allows four types of ownership that include [community property](https://www.investopedia.com/terms/c/communityproperty.asp), partnership, joint tenancy, and tenancy in common. TIC is the default form among unmarried parties or other individuals who jointly acquire property. These owners have the status of tenants in common unless their agreement or contract expressly otherwise states that the arrangement is a partnership or a joint tenancy.

TIC is one of the most common types of homeownership in San Francisco, according to SirkinLaw, a San Francisco real estate law firm specializing in co-ownership. TIC conversions have become increasingly popular in other parts of California, too, including Oakland, Berkeley, Santa Monica, Hollywood, Laguna Beach, San Diego, and throughout Marin and Sonoma counties.

## What Benefit Does Tenancy in Common Provide?

Tenancy in common (TIC) is a legal arrangement in which two or more parties jointly own a piece of real property such as a building or parcel of land. The key feature of a TIC is that a party can sell their share of the property while also reserving the right to pass on their share to their heirs.

## What Happens When One of the Tenants in Common Dies?

The ownership share of the deceased tenant is passed on to that tenant’s estate and handled according to provisions in the deceased tenant’s will or other estate plan. Any surviving tenants would continue owning and occupying their shares of the property.

## What Is a Common Dispute Among Tenants In Common?

TIC tenants share equal rights to use the entire property regardless of their ownership percentage. Maintenance and care are divided evenly despite ownership share. Problems can arise when a minority owner overuses or misuses the property.

## The Bottom Line

Tenancy in Common (TIC) is a type of shared ownership in which two or more parties own interests in real estate or land. Each tenant in common can hold different ownership percentages and independently manage their share. A primary feature is the lack of survivorship rights, meaning an owner's share is passed to their estate instead of the other owners upon death. Prospective co-owners should consider how TIC agreements facilitate property purchases and adjustability in ownership, but also the potential for disputes and liabilities, particularly regarding debt and taxes.  

> **Article Sources**
>
> 1.  LawTeacher. "[Joint Tenancy v Tenancy in Common](https://www.lawteacher.net/lectures/land-law/co-ownership/joint-tenancy-v-tenancy-in-common/)."
>     
> 2.  California Legislative Information. "[Interests in Property](https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=CIV&division=2.&title=2.&part=1.&chapter=2.&article=1.)."
>     
> 3.  SirkinLaw. "[Tenancy In Common (TIC)—An Introduction](https://andysirkin.com/tenancy-in-common-tic/general-information/tenancy-in-common-primer/)."