Tenancy in Common

Tenancy in common is a form of co-ownership in which two or more individuals each hold a separate, transferable share of the same property. Each owner's interest is distinct and can be sold, gifted, or inherited independently of the other owners, without their consent.

How tenancy in common works

Each co-owner holds an undivided interest in the whole property, meaning no single owner has exclusive rights to a specific physical portion. All owners share access to and use of the entire property, regardless of the size of their individual share.

Ownership interests are recorded in the property deed. Shares do not need to be equal; one owner might hold 60% while another holds 40%. If the deed does not specify percentages, most states presume equal shares among all co-owners.

When a tenant in common dies, their share passes to their heirs or designated beneficiaries according to their will or state intestacy laws, not automatically to the surviving co-owners. This is the defining distinction from joint tenancy.

Key characteristics

• Unequal shares permitted. Ownership percentages can reflect each party's financial contribution or any agreed-upon split.
• No right of survivorship. A deceased co-owner's interest passes through their estate, not to the surviving owners.
• Independent transferability. Each owner can sell, mortgage, or gift their share without the other owners' consent.
• Proportional rights and responsibilities. Rental income, taxes, and maintenance costs are shared in proportion to each owner's interest.
• Partition rights. Any co-owner can petition a court to partition the property, either by physically dividing it or by ordering a sale with the proceeds distributed proportionally.

Tenancy in common vs. joint tenancy

The critical difference is the right of survivorship. In a joint tenancy, a deceased co-owner's interest passes automatically to the surviving owners and cannot be willed to heirs. Tenancy in common carries no such automatic transfer.

A joint tenancy also requires equal shares acquired at the same time by the same deed. Tenancy in common imposes none of these requirements. Most states default to tenancy in common when a deed does not expressly establish joint tenancy.

Common uses

• Inherited property: Siblings who inherit a family home each hold an undivided share and can sell or transfer their interest independently.
• Investment partnerships: Business partners acquiring property with unequal capital contributions can reflect those proportions in the deed.
• Unmarried co-buyers: Parties who want to leave their share to their own heirs rather than to a surviving co-owner take title as tenants in common.

Considerations and limitations

Because any co-owner can transfer their interest to a third party, remaining owners may find themselves sharing property with an unfamiliar party. A co-ownership agreement drafted at purchase can address this by establishing rights of first refusal or buyout procedures.

Each co-owner's interest is also subject to their individual creditors; a lien or judgment against one owner can attach to their share without affecting the others. For tax purposes, each owner reports their proportional share of income, deductions, and capital gains on their individual return.

Related terms

• Ownership interest: The legal right to a share of property, held separately by each tenant in common
• Property deed: The legal document that records how co-owners hold title and each party's ownership percentage
• Last will and testament: Essential for tenants in common who want their share to pass to specific heirs, since no automatic transfer occurs at death

FAQs about tenancy in common

What happens to a tenant in common's share upon death?

The share passes to the deceased's heirs or beneficiaries under their will, or under state intestacy laws if no will exists. It does not transfer automatically to surviving co-owners and may need to go through probate before title can be transferred.

Can one tenant in common force a sale of the entire property?

Any co-owner can petition a court for a partition action, which can result in a physical division of the property or a court-ordered sale with proceeds distributed proportionally. Co-ownership agreements that include buyout procedures can help avoid this outcome.

Does tenancy in common require specific language in the deed?

In most states, tenancy in common is the default form of co-ownership. A deed conveying property to two or more people without specifying the ownership structure will typically create a tenancy in common automatically. Establishing a joint tenancy requires express language, often including the phrase "with right of survivorship."