What Is Tenancy in Common (TIC) in Real Estate?

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Tenancy in common (TIC) is a form of co-ownership in which two or more people each hold an undivided, separately transferable share of the same property. The shares do not have to be equal, each owner can sell, mortgage or leave their share to heirs without the others’ consent, and there is no right of survivorship. When a tenant in common dies, their share passes through their estate rather than automatically to the surviving co-owners.

How Tenancy in Common Works

Property law traditionally describes co-ownership through four “unities”: time (owners acquire their interests at the same moment), title (through the same deed), interest (in equal shares) and possession (each has the right to occupy the whole). A joint tenancy needs all four. A tenancy in common needs only one: unity of possession.

That single requirement explains most of how TIC ownership behaves:

• Unequal shares are allowed. One owner can hold 70% and another 30%. The deed or ownership documents normally state the percentages. If the deed is silent, many states presume equal shares, though that presumption can sometimes be rebutted by evidence of unequal contributions.
• Owners can come and go. A new co-owner can buy into an existing tenancy in common later, and an existing owner can sell their share to an outsider. The buyer becomes a tenant in common with the remaining owners.
• Each share is separate property. An owner can transfer their interest by sale, gift or will. A creditor with a judgment against one owner can generally reach that owner’s share, not the shares of the others.

What you actually own

A tenant in common owns no specific land. A 25% owner holds an undivided 25% interest in the whole parcel, not the back quarter of the lot or one bedroom of the house, and a 1% owner has the same legal right to occupy and use the entire property as a 99% owner. Percentages determine each owner’s share of sale proceeds, rental income and, usually, carrying costs. They do not ration physical access.

That gap between economic share and use rights causes many disputes. A minority owner who lives in the property full time while a majority owner lives elsewhere is acting within their possession right. Whether the occupying owner owes the others rent depends on state law and on any agreement between the owners.

Worked Example (Hypothetical)

Three friends buy a duplex for $600,000 as tenants in common. They contribute unequally to the down payment and agree that ownership will follow those contributions:

Assume they later sell for $750,000 and, after paying off the remaining mortgage and selling costs, $250,000 in net proceeds is left. Split by ownership percentage, Ana receives $125,000, Ben $75,000 and Cara $50,000. This assumes their written agreement ties proceeds to percentage ownership and that no owner is owed reimbursement for paying more than their share of expenses along the way.

Now assume the county sends one $9,000 property tax bill. If the jurisdiction applies joint-and-several liability, the county can pursue any one owner for the full $9,000, even Cara with her 20% share. Among themselves, the owners can agree that Ana pays $4,500, Ben $2,700 and Cara $1,800, and an owner who covers more than their share can seek repayment from the others. That internal arrangement does not limit what the taxing authority can collect.

If Ben dies with a will leaving his share to his sister, she becomes a 30% tenant in common with Ana and Cara. Neither surviving owner gains anything from Ben’s death, and neither gets a say in who inherits.

The Tenancy in Common Agreement

A TIC agreement is a private contract among the co-owners. It is generally not legally required to create a tenancy in common, since the deed’s wording does that, but without one the owners fall back on state default rules, which may not match what they intended.

A well-drafted agreement typically addresses:

• each owner’s percentage and how it was calculated;
• who pays the mortgage, taxes, insurance and repairs, and in what proportion;
• who may occupy which part of the property, and whether occupying owners pay rent to the others;
• a right of first refusal or buyout formula if an owner wants to sell;
• what happens when an owner defaults on their share of expenses;
• dispute resolution and any limits on filing for partition.

The deed records title. The agreement governs the relationship. In multi-unit TIC buildings the agreement often assigns each owner the exclusive use of a particular unit even though everyone legally owns undivided shares of the whole building.

Death and Estate Planning

Because there is no survivorship right, a tenant in common’s share is part of their estate. It passes under their will, or under state intestacy law if there is no will, and it may go through probate. An owner can name co-owners as beneficiaries, leave the share to family, or hold it through a trust to control who receives it and potentially avoid probate.

This flexibility is the main reason people choose TIC over joint tenancy, especially blended families or business partners who want their share to reach their own heirs. The trade-off is that surviving owners may end up sharing the property with an heir they did not choose.

Mortgages and Property Taxes

When tenants in common finance a purchase together, lenders usually require every owner to sign the loan, which makes each signer responsible for the entire debt. If one owner stops paying, the others must cover the shortfall or risk default and foreclosure on the whole property. In some markets, notably San Francisco, specialized lenders offer fractional loans secured only by one owner’s share, which limits each owner’s exposure to their own loan, but these are a niche product.

For property taxes, a TIC does not split the parcel legally, so the taxing authority usually issues a single bill for the entire property, as in the example above. On federal income taxes, a co-owner who itemizes can generally deduct the real estate taxes they actually paid on property they own. When owners pay unequally, the split can depend on local liability rules and the facts, so records of who paid what matter.

Ending a Tenancy in Common

A tenancy in common ends in one of three ways:

1. Buyout or sale by agreement. One owner buys the others out, or all owners agree to sell the property and divide the proceeds by share.
2. Sale of a single share. One owner sells their interest to an outsider, without the others’ permission unless a TIC agreement says otherwise. The TIC continues with a new member. A fractional share can be hard to sell or finance on its own, since buyers must accept co-owners they did not choose.
3. Partition. If owners cannot agree, any owner can generally file a partition action. A court may order a partition in kind, physically dividing the property into separately owned parcels, or a partition by sale, ordering the property sold and the proceeds distributed by ownership share. Physical division is practical for large tracts of land but rarely for a single house, so partition by sale is often the outcome for residential property.

The partition right is why a single dissatisfied owner, including a new heir, can force a sale that the others do not want. Some TIC agreements restrict or delay partition, and some states have added procedures for inherited family property, but the basic right is a defining feature of co-ownership.

Tenancy in Common vs. Joint Tenancy vs. Tenancy by the Entirety

A frequent misconception is that both joint tenancy and tenancy in common require equal shares. Only joint tenancy does.

In a joint tenancy, a deceased owner’s interest passes to the surviving owners outside of probate.

Tenancy by the entirety treats a married couple as a single owner. Neither spouse can sell or encumber the property alone, and in many states the property is shielded from creditors of only one spouse. It differs from community property, a marital property system used in states such as California, Texas and Arizona, under which most assets acquired during the marriage belong equally to both spouses regardless of how title is held.

Which form applies by default varies by state and by the owners’ relationship. California law, for example, treats an interest held by several persons as a tenancy in common unless it is expressly declared a joint tenancy, partnership or community property.

Where Tenancy in Common Is Used

TIC is the default for many co-buyers who are not married: friends, siblings, unmarried partners and investors pooling capital for real estate. It is widely used in San Francisco, where TIC ownership of multi-unit buildings has been an alternative to condominiums, with each owner holding a percentage of the building and exclusive use of one unit under the TIC agreement.

TIC interests are also used in commercial real estate investing. The IRS set out conditions in Revenue Procedure 2002-22 under which an undivided TIC interest in real property can be treated as real estate rather than a partnership interest, which matters for investors using 1031 like-kind exchanges.

The Bottom Line

Tenancy in common suits unmarried co-buyers, blended families and investors who want unequal shares and want their stake to reach their own heirs. That flexibility brings risks, including shared liability for loans and tax bills, heirs the other owners did not choose, and a partition right that can force a sale. A written TIC agreement covering costs, occupancy, buyouts and defaults keeps owners from relying on state default rules.