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1. Tenancy in Common
Tenancy in Common
Tenancy in common is a type of real estate ownership in which two or more individuals own a property together. Tenancy in common differs from other types of joint ownership in that the tenants in common do not have survivorship rights, meaning that if one tenant dies, the other does not inherit his or her share. Instead, their share in the property passes to the beneficiaries listed in that tenant’s will.
Tenancy in common is a property ownership agreement in which multiple people hold ownership interest in the same property. Under a tenancy in common agreement, each individual owner can own a different percentage of the property; however, all owners have equal rights to use the entire property. This is commonly referred to as "undivided interest."
One way that tenancy in common differs from other forms of shared ownership, such as joint tenancy or tenancy in entirety, is that tenants in common can choose to sell or transfer their ownership percentage at any time, without the explicit approval of the property co-owners. This type of ownership interest can be appealing for unmarried or otherwise unrelated individuals who want to own property together.
Tenancy in common FAQs
What is the difference between joint tenants and tenants in common?
Joint tenancy and tenancy in common are two types of shared property ownership, but they have distinct differences. In order to hold joint tenancy, you and your other joint tenants must own equal shares and have equal interest in the property and be listed on the same deed. Tenancy in common does not have these same requirements.
But perhaps the most important distinction is what happens if one joint tenant dies. In that situation, the deceased owner's share in the property passes to the surviving joint tenants. In a tenancy in common, the ownership percentage can be distributed by the decedent’s trust, will, or by intestate succession.
Does a tenant in common have to pay rent?
Tenancy in common is a form of property ownership, so a tenant in common would not need to pay rent to their co-owners. Tenants in common are equally responsible for making mortgage and property tax payments, however.
What’s the difference between tenancy by entirety and tenancy in common?
Tenancy by entirety is another type of shared ownership that is available exclusively to married couples. And, if one tenant dies, the ownership interest automatically transfers to the surviving spouse.
How is tenancy in common different from tenancy in severalty?
Tenancy in severality is another name for sole ownership. Unlike tenancy in common, joint tenancy, and tenancy by entirety, these ownership agreements aren’t shared among several co-owners. Instead, the property is owned by a single individual or entity.
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