Tenancy in Common

Tenancy in common is a form of co-ownership where two or more individuals, known as tenants in common, hold different ownership interests in a property or Asset.

Unlike Joint Tenancy, where each co-owner has equal ownership shares and Right of Survivorship, tenancy in common allows co-owners to have unequal ownership shares and different survivorship rights regarding their portion of the asset or property.

When a tenant in common passes away, their ownership share becomes part of their own personal Estate and is subject to distribution according to their Last Will and Testament, or applicable Inheritance laws.

Tenancy in common can be chosen by individuals who want to co-own a property with varying ownership percentages, especially when co-owners contribute different amounts of capital or have different financial interests.

Key features of tenancy in common include:

Unequal Ownership Shares: Co-owners in a tenancy in common can have different ownership percentages. For instance, one owner might hold a 60% share, while another holds a 40% share.

No Right of Survivorship: Unlike joint tenancy, there is no automatic transfer of a deceased co-owner's share to the surviving co-owners. The ownership share of a tenant in common becomes part of their personal estate rather than automatically passing to the surviving co-owners.

Individual Control: Each tenant in common has the right to manage and use their portion of the property independently. They can sell, transfer, or mortgage their share without requiring consent from the other co-owners.

Unity of Possession: All tenants in common have the right to possess and use the entire property, regardless of their ownership percentage. This means that one co-owner cannot exclude another from accessing the property.

Transfer of Ownership: When a tenant in common decides to sell or transfer their ownership share, it can be done without affecting the ownership shares of the other co-owners. The new owner becomes a tenant in common with the existing co-owners.

Tenancy in common offers flexibility in terms of ownership percentages and inheritance, but it can also lead to potential disagreements among co-owners if they have different ideas about an asset or property.

It helps to speak with an Estate Attorney or Real Estate Attorney when considering tenancy in common, especially to ensure that co-ownership agreements are properly documented and understood by all parties involved.