Tenancy in Common (TIC)

Tenancy in common (TIC) is a form of shared real estate ownership in which two or more people hold undivided interests in the same property. TIC allows unequal ownership percentages, independent transferability of shares, and the right to pass a share to heirs. It does not include rights of survivorship.

Key points
* Owners can hold unequal shares and each has an undivided right to use the entire property.
* There is no right of survivorship: a deceased owner’s share passes to their estate or designated beneficiaries.
* Each co-owner can sell, mortgage, or transfer their share independently.
* Co-owners may be jointly liable for taxes and debts related to the property.

How TIC works
* Creation: TIC is established by deed, title, or other ownership documents. New co-owners can be added later.
* Ownership: Each tenant owns a percentage interest but not a specific physical portion of the property.
* Transferability: An owner may sell or encumber their interest without the consent of the others (unless restricted by agreement).
* Estate planning: Owners can name beneficiaries and leave their share via a will or other estate instrument.

Dissolving a TIC
* Voluntary buyout: Co-owners can agree that one or more buy out the others.
* Partition actions: If co-owners cannot agree, any owner can ask a court to partition the property. Courts generally order:
* Partition in kind — the property is physically divided among owners when feasible.
* Partition by sale — the property is sold and proceeds are split according to ownership shares.
* Note: A partition by sale results in an involuntary sale of the whole property if the court deems division impractical.

Property taxes and liabilities
* Tax billing: Most jurisdictions issue a single property tax bill for the parcel, not separate bills by ownership percentage.
* Joint-and-several liability: In many areas, each TIC owner can be held responsible for the entire tax bill (or other liens), meaning one owner’s nonpayment can put the others at risk.
* Deductions: How tax payments are deducted varies by jurisdiction. Typically, owners can deduct the property tax payments they actually made; rules differ where joint-and-several liability applies.

Other forms of co-ownership (brief comparison)
* Joint tenancy: Owners hold equal shares created at the same time by the same deed; includes rights of survivorship (the surviving owner(s) automatically inherit a deceased owner’s share).
* Tenancy by the entirety: A form of joint ownership available to married couples in some states; offers survivorship rights and protections against creditors of one spouse in certain circumstances.
* Choice considerations: Use TIC for flexible, unequal ownership and transferability; use joint tenancy or tenancy by the entirety when survivorship or marital protections are desired.

Pros and cons of TIC
Pros
* Easier entry into real estate by sharing costs (down payments, mortgage, maintenance).
* Flexible ownership percentages and the ability to add or remove owners.
* Individual control over each owner’s share, including the right to pass that share through estate planning.

Cons
* No automatic survivorship—heirs of a deceased owner may become co-owners with existing tenants.
* Potential for disputes over use, maintenance, and expense allocations.
* Joint liability for taxes and debt (one owner’s default can affect all).
* Any owner can force a partition action that may result in sale.

Common disputes and practical issues
* Unequal use: Any owner has equal right to use the entire property even if their ownership percentage is small, which can lead to conflicts.
* Financial risk: Nonpaying owners can expose others to foreclosure or tax liens.
* Unwanted co-owners: Heirs who inherit a share may be unknown or unwelcome partners and could trigger partition litigation.

Real-world example
* In California, TIC is a common default form of ownership for unmarried co-buyers. TIC arrangements and conversions are prevalent in cities like San Francisco, Oakland, Berkeley, and other coastal communities where co-ownership structures are used to enable shared investment in housing.

Frequently asked questions
Q: What happens when a co-owner dies?
A: The deceased owner’s share passes according to their will or estate plan (to heirs or beneficiaries). It does not automatically transfer to the surviving co-owners.

Q: Can I sell my TIC share?
A: Yes. A tenant in common may sell, gift, or mortgage their interest without the consent of the other owners, unless a prior agreement restricts transfers.

Q: Can one owner force a sale?
A: Yes. Any co-owner can file a partition action; the court may order division in kind or a sale and distribution of proceeds.

Q: Are TIC owners responsible for the mortgage of other owners?
A: Lenders typically require all borrowers to sign the mortgage. Even if not all co-owners sign, creditors and lenders can pursue legal remedies that may affect the property; joint liability depends on loan and title arrangements.

Bottom line
Tenancy in common offers flexibility for joint ownership with unequal shares and independent transfer rights. It’s useful for co-investors, family members, or partners who want control over their own share and the ability to leave it to heirs. However, TIC also creates potential for disputes, joint liability for taxes and debts, and the possibility of forced sale through partition. Clear agreements, careful planning, and understanding local law help manage the risks.