How does ownership work?
Even though tenants in common can't claim ownership of specific parts of the property, they can have different levels of interest; for example, one owner may have a 25% share of the property and another own 75%. Tenancy in common agreements can be created at any time, meaning an individual can buy into the property after the others have entered into their ownership agreement, even after a period of years.
Whereas, joint tenants receive equal shares of a property with the same deed at the same time. Their terms are detailed in the deed, title, and other legally binding ownership documents. Joint tenancy may be the default for married couples in some states, while other states may use tenancy in common as the default.
Tenancy in common is also different from "tenancy by the entirety," which refers to married property owners who have equal and undivided interests in the property.
What happens when someone in the TIC agreement dies?
When one of the owners dies, their interest in the property passes to their estate. By contrast, joint tenancy allows their interest to be passed automatically to the surviving owners. This process may be further complicated by any existing loan documents and prohibitions.
Why should I hire an attorney if I'm looking to become a tenant in common?
Tenant in Common agreements are complex, especially regarding ownership rights, property management, property proceeds, taxes, mortgages, conveyance, and liability. For those reasons, working with an experienced real estate and business attorney is important for ensuring that everyone's share of these expenses is relevant to their respective ownership interests.
If you have questions about becoming a tenant in common, purchasing a property with other parties, or the pros and cons of doing so, please reach out to me today. I can provide you with detailed answers to your concerns and help you understand the best approach to the situation.