What is Tenancy in Common?

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  • Written By: wiseGEEK Writer
  • Edited By: O. Wallace
  • Last Modified Date: 12 March 2020
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Tenancy in common is sometimes referred to as joint tenancy, but this is actually a different means of owning property. When people share a property jointly, they own equal shares in that property, and if one person dies, often the other person fully inherits the entire property. Tenancy in common works in a more unusual way. Features include being able to share unequal amounts of the property, and unless indicated by will, each share is passed to the part-owner’s heirs, not to the other tenants.

One aspect of common tenancy that is similar to joint tenancy is called “right of possession.” Under circumstances where there are two, three or even fifty owners, each has a right to possess the property, occupy it, and cannot exclude other tenancy in common owners from also possessing the property. Yet, not all people use tenancy in common agreements specifically to occupy property.


For example, a builder might want to build a set of homes for later sale in a profitable market. Instead of simply having investors in his project who would be reimbursed based on profits, he might create a tenancy in common agreement with numerous people who would all own a share of the land, the buildings, and the eventual profits from the sale. None of the tenants, in most cases, would want to occupy the property, or maybe a few do, and will eventually live in one of the houses built. Generally, the tenancy in common agreement simply signifies an investment with multiple owners, who have right to their share of the sale of property when the builder has developed it.

If one of the original tenancy in common owners of this investment property dies, his share goes to his inheritors. If it’s simply going to one survivor, that might mean little; the new “in common” owner might simply hold on to the tenancy in common agreement and wait for a profitable sale. But if the person who owned part of the property had multiple heirs, things could get difficult, because all the heirs might want to liquidate their share of the property.

The procedure for doing this is helped by “in common” agreements. Under most circumstances, others in the agreement would simply buy out the owned percentage from heirs who want to get rid of it. If others don’t want to agree to this, the new inheritors of a share may file what is called a partition action in court, which tends to mean the court will order the property sold and disbursements made to each owner based on percentage of property owned. If the builder’s land isn’t fully developed, he, or the other tenants in common may decide it’s far easier to simply buy the percentage owned by the heirs. The land will have less value if not fully developed, and the other tenants still retain the chance of making much more money once they are able to sell an entirely developed property.



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