Tenancy in common (TIC) is one of the most common forms of property ownership in real estate transactions. It is a type of agreement that allows two or more people to co-own a property. In this arrangement, each owner owns a specific share or percentage of the property. These shares are not necessarily equal. Tenancy in common agreement is a great way to invest in property without having to put up the entire capital for purchase.
Understanding Tenancy in Common Agreement
When multiple people buy a property together, they can choose to hold the property as joint tenants or tenants in common. Joint tenancy means that all the owners have an equal share in the property, and upon the death of an owner, the share of the deceased automatically passes to the surviving joint tenants. On the other hand, tenants in common allows the co-owners to have unequal shares, and upon the death of one owner, their share passes to their heirs.
Tenancy in common agreement is a flexible arrangement that allows each owner to use, sell or transfer their share independently. This means that each owner can do what they like with their share, including selling it, leaving it to their heirs, or using it as collateral for a loan.
Advantages of Tenancy in Common Agreement
One of the main advantages of a tenancy in common agreement is that it allows individuals to own a share of a property without having to put up the entire purchase price. By owning a share, the co-owners can spread the cost and the risk of owning a property.
Additionally, tenancy in common agreements can be used in family-owned businesses that operate out of a property. This type of agreement allows business owners to own the property and lease it to the business, providing a secure location for their business operations.
Conclusion
In summary, tenancy in common agreement is a popular option for co-owning a property. It offers a flexible arrangement that allows each owner to use, sell or transfer their share independently. This can be an attractive option for people who want to invest in property but do not have the capital to purchase the property outright. It is essential to understand the terms of the agreement before entering into a tenancy in common agreement.
