Tenancy in Common: Flexible Ownership for Shared Properties
Tenancy in common (TIC) is a versatile form of property ownership that allows multiple individuals to share ownership of a property while maintaining distinct and flexible ownership interests. Unlike joint tenancy, TIC does not require equal ownership shares; each owner can hold a percentage that reflects their financial contribution or agreed-upon arrangement. This flexibility makes tenancy in common an appealing choice for a wide range of property types, from single-family homes to large multi-unit buildings.
A key feature of TIC is the absence of the right of survivorship. When one owner passes away, their share does not automatically transfer to the remaining co-owners. Instead, it is inherited by the deceased owner’s heirs or beneficiaries as outlined in their will or dictated by state inheritance laws. This characteristic provides co-owners with the freedom to decide how their share of the property will be distributed, making TIC a popular choice for business partners, friends, or family members who want to maintain control over their individual interests.
In San Francisco, tenancy in common is particularly common in multi-unit residential buildings. In this arrangement, individuals can share ownership of an entire building while occupying separate units as their primary residences or rental properties. For example, a group of buyers might purchase a three-unit Victorian building in San Francisco and allocate ownership shares corresponding to their respective units. Each co-owner has an undivided interest in the entire property, but practical agreements—often formalized in a TIC agreement—outline rights and responsibilities, such as usage, maintenance, and decision-making for the shared property.
The flexibility of TIC ownership also extends to financing. Co-owners can secure individual mortgages for their respective shares in some cases, known as fractional financing, which has gained popularity in areas like San Francisco. However, traditional lenders may approach TIC differently, so it’s essential to work with professionals experienced in TIC financing and legal agreements.