What is a Tenancy in Common (TIC)? Structure, Mechanics, and Distinctions

October 22, 2023

Tenancy in Common (TIC) stands as a unique form of property ownership, offering flexibility and shared responsibility among co-owners. In this article, we'll explore the concept of Tenancy in Common, delve into its workings, and highlight the differences between TIC and Joint Tenancy.

Understanding Tenancy in Common (TIC):

Tenancy in Common (TIC) is a form of concurrent ownership in real estate where two or more individuals, known as "tenants in common," hold an undivided interest in a property. Each co-owner possesses a distinct, transferable ownership share, allowing for a degree of autonomy in managing and disposing of their share.

Key Features and Mechanics of TIC:

1. Undivided Interest:

Each tenant in common holds an undivided interest in the entire property. While specific areas may be designated for exclusive use, the overall ownership is shared.

2. Transferability:

Owners have the right to sell, transfer, or mortgage their individual interest without requiring consent from the other co-owners. This aspect distinguishes TIC from other forms of joint ownership.

3. Proportional Ownership:

The ownership shares among tenants in common need not be equal. Co-owners can have varying percentages of ownership, reflecting their financial contributions or agreements among themselves.

4. Independent Decision-Making:

Unlike Joint Tenancy, where decisions typically require unanimous agreement, tenants in common can make independent decisions regarding their share of the property. This includes decisions related to leasing, selling, or mortgaging.

5. No Right of Survivorship:

In TIC, there is no automatic right of survivorship. If a co-owner passes away, their interest passes to their heirs or beneficiaries, not automatically to the surviving co-owners.

6. Shared Responsibilities:

Co-owners share responsibilities related to property expenses, such as maintenance, property taxes, and insurance. The specific arrangement is often outlined in a TIC agreement.

Differences Between TIC and Joint Tenancy:

1. Transferability:

TIC: Co-owners can freely transfer or sell their individual interest without the consent of other co-owners.
Joint Tenancy: Typically requires the consent of all joint tenants for any transfer of ownership.

2. Right of Survivorship:

TIC: No automatic right of survivorship. A deceased co-owner's interest passes to their heirs or beneficiaries.
Joint Tenancy: In the event of a co-owner's death, their interest automatically transfers to the surviving joint tenants.

3. Decision-Making:

TIC: Co-owners can make independent decisions regarding their individual interest without unanimous agreement.
Joint Tenancy: Major decisions usually require unanimous consent of all joint tenants.

4. Ownership Structure:

TIC: Co-owners have undivided but distinct ownership shares.
Joint Tenancy: Co-owners collectively own the entire property, with equal and undivided shares.

5. Heirs and Inheritance:

TIC: In the event of a co-owner's death, their interest passes to their heirs or beneficiaries.
Joint Tenancy: The deceased co-owner's interest automatically transfers to the surviving joint tenants.

Tenancy in Common provides a flexible framework for shared property ownership, allowing individuals to have distinct ownership interests while sharing responsibilities. The absence of a right of survivorship and the ability to freely transfer ownership sets TIC apart from Joint Tenancy. As with any shared ownership arrangement, establishing clear agreements and communication among co-owners through a TIC agreement is essential to ensuring a harmonious and well-managed property ownership structure.