Tenancy in Common

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Tenancy in Common

A form of concurrent ownership of real property in which two or more persons possess the property simultaneously; it can be created by deed, will, or operation of law.

Tenancy in Common is a specific type of concurrent, or simultaneous, ownership of real property by two or more parties. Generally, concurrent ownership can take three forms: joint tenancy, tenancy by the entirety, and tenancy in common. These forms of concurrent ownership give individuals a choice in the way that co-ownership of property will be carried out. Each type of tenancy is distinguishable from the others by the rights of the co-owners.

Usually, the term tenant is understood to describe a person who rents or leases a piece of property. In the context of concurrent estates, however, a tenant is a co-owner of real property.

All tenants in common hold an individual, undivided ownership interest in the property. This means that each party has the right to alienate, or transfer the ownership of, her ownership interest. This can be done by deed, will, or other conveyance. In a tenancy by the entirety (a concurrent estate between married persons), neither tenant has the right of alienation without out the consent of the other. When a tenant by the entirety dies, the surviving spouse receives the deceased spouse's interest, thus acquiring full ownership of the property. This is called a Right of Survivorship. Joint tenants also have a right of survivorship. A joint tenant may alienate his property, but if that occurs, the tenancy is changed to a tenancy in common and no tenant has a right of survivorship.

Another difference between tenants in common and joint tenants or tenants by the entirety is that tenants in common may hold unequal interests. By contrast, joint tenants and tenants by the entirety own equal shares of the property. Furthermore, tenants in common may acquire their interests from different instruments: joint tenants and tenants by the entirety must obtain their interests at the same time and in the same document.

Further readings

Kurtz, Sheldon F., and Herbert Hovenkamp. 2003. Cases and Materials on American Property Law. 4th ed. St. Paul, Minn.: West.

tenancy in common

n. title to property (usually real property, but it can apply to personal property) held by two or more persons, in which each has an "undivided interest" in the property and all have an equal right to use the property, even if the percentage of interests are not equal or the living spaces are different sizes. Unlike "joint tenancy" there is no "right of survivorship" if one of the tenants in common dies, and each interest may be separately sold, mortgaged or willed to another. Thus, unlike a joint tenancy interest which passes automatically to the survivor, upon the death of a tenant in common there must be a probate (court supervised administration) of the estate of the deceased to transfer the interest (ownership) in the tenancy in common. (See: tenancy, joint tenancy)

References in periodicals archive ?
So, if there is a gain on the sale of a tenancy-in-common interest, the seller can defer that gain by acquiring replacement property that is of like kind.
A disadvantage of tenancy-in-common is that co-tenants have a limited ability to conduct business as a group.
To avoid this result, owners must be able to demonstrate that they acquired their tenancy-in-common interests for business or investment purposes.
Part of the conversion to tenancy-in-common ownership should be to change the mortgage from being owed by the partnership to being owed by the individual tenants-in-common.
2002-22: (38) This procedure lists the conditions under which the IRS will consider a ruling request that a tenancy-in-common interest will not be treated as a partnership interest for tax purposes.
2002-22, issued in 2002, the IRS provides ruling standards for determining whether a real estate ownership arrangement constitutes a tenancy-in-common, an interest that is eligible to serve as replacement property in a like-kind exchange.
Specifically, it was interested in transactions in which a "sponsor" (i.e., a person who divides a single interest in property into multiple co-ownership interests with the intention of offering the interests for sale) "packaged" tenancy-in-common interests in rental real estate and marketed them to a taxpayer as eligible replacement property under Sec.
A tenancy-in-common agreement will govern the TIC holders' rights and responsibilities with respect to the property and each other.
Known in the industry as "tenancy-in-common" investment structures, "TICs" are currently finding more and more appeal among the investment community.