Tenants In Common

Tenants In Common
by Takara Alexis

When it comes to property with title, there are different ways you can own title. The type of title ownership you get with property or securities will influence legal ownership of the property as well as how the property is transferred after a title owner passes away. Tenancy in common is one of the types of ownership that could be appropriate when the title owners have not equally contributed to the obtaining the property.

Tenants in common is one of the many ways you could own property with two or more individuals. There's no limit to the number of people who can hold title. It can be two people or it can be 50 people, or even more.

Parties don't have to be related to hold a tenancy in common title. Family members can be tenants in common. So can friends and business partners.

Unlike joint ownership, the owners don't need to have equal shares of property. For example, if there are two tenants in common, the tenants don't necessarily have to have 50-50 ownership of the property. Likewise, four owners don't have to each own 25% of the property. Ownership can be split up however the parties decide. For example, if there are four owners, Brad could own 15%, Chris own 20%, Beth own 30%, and Kelly own 35%.

Each co-tenant has the right to access the property, regardless of the distribution of ownership. One party can live in the property alone or the parties can share the property, depending what the parties decide. None of the parties have the right to leave out any of the other parties. An excluded co-tenant may be able to obtain monetary compensation for the amount of time they were denied access.

If the property generates income, each co-tenant is entitled to a share of the income based on their share of the title. For example, in a 25-75 split ownership, one co-tenant would receive 25% of the property's income while the other would receive 75%.

Co-tenants are also responsible for paying the amount of the property including mortgage and property taxes. As with receiving income, co-tenants pay their share of costs based on their share of the title.

In their will, the co-tenants should designate someone to take ownership of their share of the property. When a co-tenant passes away, their half of the property rights would pass on to the person named in the will. All co-tenants continue to maintain rights to the property as named in the title, except the co-tenant named in the will. That living partner would assume ownership of the deceased co-tenants interest in addition to what they already own.

You can dissolve a tenancy in common title ownership agreement by buying out the co-tenants. The tenants would agree to give up their share of the property for a sum of cash. You could also sell the property and split the proceeds among the co-tenants according to their share of the title.

If the co-tenants don't agree to sell the property, one of them can request a court order to sell the property and distribute the proceeds. This is known as a partition action and usually happens when one of the co-tenants passes away and the surviving co-tenants do not agree to the future of the property. One co-tenant may want to sell the property while the other co-tenants want to keep it. The court will generally grant a partition request unless the co-tenants have previously agreed to waive that right.

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