What Are the Benefits of Tenants in Common?

Written by sherrie coronas
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What Are the Benefits of Tenants in Common?
Tenants in common is one form of co-ownership of real estate. (teen friends smiling image by maxie from Fotolia.com)

There are several ways to hold title to real estate. When two or more people hold title to one property together, a form of co-ownership must be selected. "Tenants in common" (TIC) is just one form of co-ownership available. It offers distinct benefits over other options, such as joint tenancy. It is important to carefully consider all available options and to consult with an attorney before making a final decision regarding title, as each form carries different legal and tax obligations.

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Equal or Unequal Interests

Tenancy in common allows two or more owners to hold a title to property with unequal or equal interests. For example, one owner may have one-third, one-fourth or one-half interest in the property. In addition, if five people own the property, they may each own one-fifth or some other fraction. It is important to note that it is only the interest in the property, and not the property itself, that is divided in this way.

What Are the Benefits of Tenants in Common?
Tenancy in common owners may hold unequal interest in the property. (pie chart 42 image by chrisharvey from Fotolia.com)

Unity of Ownership

The tenants in common co-owners have "unity of possession." This means that all owners, despite their unequal or equal interests, are entitled to possess, or enjoy, the whole property and not just a fraction of it.

What Are the Benefits of Tenants in Common?
Unity of possession allows all owners to enjoy the whole property. (Asian business man with girl friends 2 image by visi.stock from Fotolia.com)

Transfer of Interest

Co-owners have separate rights to the property and may sell, convey or transfer their own share of the interest as they desire. Such action does not require the consent of the other owners. A co-owner's interest is passed on to heirs upon death, as specified by a will, if any.

What Are the Benefits of Tenants in Common?
Each co-owner may sell, convey or transfer his own interest. (signing a contract image by William Berry from Fotolia.com)

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