By real estate definition, “tenants in common” is an individual or group’s full ownership interest to any property. This gives each owner’s right to transfer or abandon his ownership to a person of their choosing in event of his or her death. This is not to be confused with a joint tenancy agreement where the property is passed on to a surviving party.
How Are Ownership Interest Divided?
The owners of the property may or may not have equal ownership of the estate. Any tenant in common may enter the agreement anytime. For example, person A may obtain an interest in ownership of 50% ten years after person B obtained his or her 25% of ownership or vice versa. Likewise, person A can sell out a partial or full portion of his or her property to person C, giving the latter rights to the property as well.
Furthermore, any owner may buy out another’s share to dissolve the tenancy in common agreement. Should all parties decide to sell the property, the overall profit is divided according to the equivalent interest of the owners. If one or more is not willing to sell, a partition may be made.
What Happens When an Owner Dies?
The remaining surviving owners are not guaranteed to receive the share of the deceased tenant in common. Unless stated in a legal contract, the ownership interest shall remain under the original owner. In contrast to this, joint tenants in common will have automatic rights should one or more partners die.