What is Tenancy in Common (TIC)?

Tenancy in common, of TIC, is an agreement between two or more individuals with respect to inheritance and ownership after one party dies. Instead of joint tenancy, in which one co-owner gets the property of another when they pass, TIC agreements allow for the owned share to be passed to whomever is so named. Many times, these two types of agreements can be encompassed by terms such as co-ownership, shared ownership and so on.

Co-Ownership

Usage of the terms make it a little confusing with regards of tenants in common versus other co-ownership agreements that can be held, with a variety of purposes and characteristics. Different kinds of agreements are given special names to cover how they are going to apply and the special issues behind them. The first major distinction is between those with assigned usage and those without. The TICs without an assigned usage include those that are informal between family and friends, where the property could have been brought in by inheritance. The other case is when syndicators or sponsors organize agreements for passive investments and property repositories.

Assigned usage cases are space assigned co-ownerships and time assigned co-ownerships. Space assigned relationships are those that assign to each owner particular houses, rooms, stores, offices, apartments or any other sort of space. Time assigned co-ownerships, popularly known as time shares, assign usage of a property over time intervals or periods. The last kind of assigned usage is a specialized form of time assignment, where some owners merely are investors in the property.

Space Assignment Co Ownerships

The most common form of agreement is the space assigned co-ownership. Each owner gains the right to use or derive income from their part of the agreement. This frequently occurs for office buildings, storage centers, co-ops, and many other kinds of commercial property. Different owners will have different suites, where they can derive income, or a different plot of land upon which to build land, or even the case of a single apartment where two people have personal bedrooms and baths, but a shared living room and kitchen.

This differs from say, a condo, since for the condo the property has been divided into physical regions, each with a clear boarder and map and deed. TIC owners instead own a percentage of a whole, which has not been particularly divided. Here, usage is derived from a contract that is signed by all owners and clearly defines the agreed upon usage and rights. In a TIC, there are no deeds or public records defining the division. This difference between a contract and a physical division with public records is an important distinction for regulatory and legal stand points.

The issue is complicated, and getting legal advice will not hurt. Rather, it will provide a sound way to draft agreements that is amicable to everyone involved. Property is nine-tenths of the law, so it is important to work out an agreement before conflict may occur.

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