Tenancy in Common
Definition - What does Tenancy in Common mean?
Tenancy in common allows two or more individuals to have concurrent, yet separate and distinct ownership of a property. Each tenant in a tenancy in common is allowed to not only possess the property, but to also have full rights to use the property.
Justipedia explains Tenancy in Common
While a tenancy in common is similar to a joint tenancy, it does differ. For example, in a tenancy in common arrangement, if one of the owners of the property dies, their portion of the property is not necessarily conveyed to the other owner (as it would be in a joint tenancy), but rather each owner has the legal authority to choose their own beneficiary.
Example: William and John are tenants in common and own a home together. If John dies, John could have named his friend Joshua as heir to the property, rather than the property passing to William.
Tenancy in common has several advantages. For example, not only is it the least restrictive type of ownership, it can also allow two or more non-married individuals to own property together. Ownership need not be 50/50; in fact, regardless of how the ownership is divided, all parties have equal access to the property. Owners also have the flexibility to deed their portion of the property to another party without approval from the other owners.
Tenancy in common can, however, have some downsides. For example, the flexibility to deed ownership could have some drawbacks for the other owners. Additionally, in some cases, if one of the co-owners wants to sell the property, they may be allowed to file a partition lawsuit. If the court agrees, all co-owners could be forced to sell.
Finally, tenants in common may also offer poor resale values. In fact, tenants in common in certain real estate markets may have very little market value, which could make it difficult for any co-owner to sell their portion of the property and make a profit, increasing the chance that one of the owners would eventually apply for a partition action.