Financial Word of the Day: Tenancy in Common
- Larry Jones
- Jul 8
- 2 min read
Updated: Sep 26
When it comes to owning property with someone else—whether it’s family, friends, or business partners—you’ve got a few ways to set things up legally. One of those is called Tenancy in Common (TIC).
So, what is it?
Definition of Tenancy in Common:
Tenancy in Common is a way for two or more people to own property together. Each person owns a share of the property, but those shares don’t have to be equal. One person could own 50%, another 30%, and another 20%. The key here? Each person’s share is individually owned—meaning they can sell, gift, or will their portion to someone else without needing the others’ approval.
Unlike Joint Tenancy, where there’s a “right of survivorship” (the surviving owner automatically gets the other’s share if they die), Tenancy in Common has no survivorship rights. When one owner passes away, their share goes to their heirs or whoever’s named in their will.
Example in Real Life:
Let’s say three siblings—Anna, Ben, and Claire—inherited their parents’ lake house as Tenants in Common. Anna owns 50%, Ben owns 30%, and Claire owns 20%. Anna decides to sell her 50% share to a cousin. She can do that because her ownership is separate from Ben and Claire’s. When Anna passes away, her share doesn’t automatically go to her siblings—it goes to whoever she listed in her will.
Why Should You Care?
Tenancy in Common comes with both flexibility and risk.
Flexibility: You can own unequal shares and leave your portion to anyone you choose.
Risk: Since any co-owner can sell their share, you could end up owning property with someone you didn’t expect. And there’s potential for disagreements over property use, maintenance, or selling decisions.
This is especially important for real estate investors or families buying property together. If you’re entering into a TIC arrangement, a clear agreement about responsibilities and decision-making can save a lot of headaches down the road.
Quick Money Tip:
If you’re thinking about buying property with others, ask your attorney or real estate professional about the difference between Tenancy in Common and Joint Tenancy. Choosing the right one could affect your estate plan, taxes, and long-term financial goals.
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