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Overview of Tenancy in Common (TIC)
Definition of
Tenancy in Common (TIC)
What is Tenancy in Common (TIC)? Tenancy in Common (TIC) is a form of property co-ownership where two or more individuals (known as tenants in common) hold separate, distinct, and undivided interests in the same property. These interests can be equal or unequal (e.g., one person might own 60% and another 40%). A key characteristic of TIC is that there is no "right of survivorship." This means that when a tenant in common dies, their share of the property does not automatically pass to the surviving co-owner(s); instead, it passes to the deceased owner's heirs or beneficiaries as specified in their will or by intestacy laws.
Activities Related to
Tenancy in Common (TIC)
Here is a list of TIC related activities:Â Purchasing property with others where ownership shares are specified (potentially unequal), Drafting legal documents (like deeds) that clearly establish a tenancy in common, Each co-owner managing or disposing of their individual share independently (subject to the rights of other co-owners), Estate planning to determine how an individual's share of the property will be distributed upon their death, and Co-owners potentially contributing to property expenses and sharing in income from the property in proportion to their ownership.
The Importance of
Tenancy in Common (TIC)
Tenancy in Common (TIC) is important because it provides a flexible way for multiple individuals to co-own property, especially when they want to hold unequal shares or wish to have their individual share pass to their chosen heirs rather than automatically to the other co-owners. This makes it a common choice for co-owning investment properties, for friends or unmarried partners buying property together, or for distributing assets in an estate. Understanding TIC is crucial for estate planning, as each owner's interest becomes part of their estate upon death and is subject to probate.
Key Aspects of
Tenancy in Common (TIC)
Separate, Undivided Interests
Each co-owner holds a distinct share of the property, which can be equal or unequal, but all have the right to possess the entire property.
No Right of Survivorship
When a tenant in common dies, their share passes to their estate or designated beneficiaries, not automatically to the other co-owners.
Shares are Transferable
Each tenant in common can generally sell, mortgage, or transfer their individual interest in the property independently.
Unity of Possession
While other unities (time, title, interest) required for joint tenancy may not be present, the unity of possession (each co-owner has the right to possess the whole property) is essential.
Concepts Related to
Tenancy in Common (TIC)
Tenancy in Common (TIC) is a form of property co-ownership that is legally distinct from Joint Tenancy, particularly Joint Tenants With Right of Survivorship (JTWROS), due to the absence of the right of survivorship. It is an important consideration in real estate law and estate planning, affecting how assets are titled and distributed. It can also impact liability concerning property expenses and taxes.
Tenancy in Common (TIC)
in Action:
The Adventures of Coco and Cami
Coco and Cami, along with a third friend, decide to buy a small investment property together. Coco puts in 50% of the money, while Cami and their friend each put in 25%. They want to make sure that if something happens to one of them, their share goes to their family, not automatically to the other co-owners.
Professor A explains that Tenancy in Common (TIC) is a way to own property together where their shares can be different, and each person's share can be passed on through their will.