Tenants in Common is a way of sharing ownership of property among two or more people. Each tenant holds an undivided interest in the property, and each tenant may own a different size portion of the property. Tenants in common ownership may be established in many different ways: through a will, deed, or other document of title. Today Tenants in Common (TIC) ownership has become a popular way for people to complete 1031 tax deferred exchanges when they hold title as an individual or other entity and would like to participate in a partnership or partnership style structure. Other people are using Tenant in Common structures to purchase multi-family real estate that may be suitable for a condominium (condo) conversion after a certain seasoning period.
There are other benefits to owning property as Tenants in Common as well. For people looking to diversify, TIC structures allow you to invest in larger properties, different types of investment property and different geographic markets. Perhaps you are looking to move up to institutional grade or single tenant properties with triple net lease arrangements. You may also benefit from fixed-rate, non-recourse financing with institutional terms for tenants in common owners. This type of financing with 5-10 year terms is usually not available to small, single investors. Many, perhaps most, tenants in common arrangements are created through inheritance whereby the decedent's will leaves property to intended heirs with or without specifying the size of interest that each is to receive. One of the most attractive features of a TIC structure is that acquiring an interest in investment property as tenants in common does not preclude you from buying investment property on your own in a subsequent 1031 tax deferred exchange. Returning to sole ownership is always an option should your investment preferences change.
Is the Tenant in Common Structure Flexible?
A tenants in common ownership interest can be purchased, sold, gifted, bequeathed by will, or inherited, and is subject to property taxes, gift tax, estate and inheritance taxes in the same manner as any property held in fee simple (single) ownership. Upon the death of a tenant in common, his or her interest in the property passes through inheritance as directed in the will or other estate planning documentation and does not divide among the other owners as there is no right of survivorship an important difference from joint tenancy ownership.
Tenant's rights
Each tenant has unrestricted rights of access to the property subject to the equivalent rights of the other tenants. Each tenant in common can petition for and secure a division of the property at any time. The partition usually will result in the petitioner being granted exclusive ownership of a portion of the property the court views as equivalent to his or her previous undivided interest. Or, the judge may order that the property be sold and the net proceeds divided among the tenants in the same proportion as their respective ownership interests.
Neda Dabestani-Ryba is a licensed Realtor in Maryland. She is a member of the President's Circle of Top Real Estate Professionals. She can be reached at (800) 536-3806 or visit her website for more information: http://neda.dabestani.pcragent.com/ Prudential Carruthers REALTORS is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.
My system teaches people that the proper use of credit... Read More
Real estate agents are gearing up to face the biggest... Read More
For the first time "want-to-be" homeowner, purchasing an unfinished new... Read More
Anyone interested in real estate should be able to talk... Read More
The secret to success in real estate investment is finding... Read More
Purchasing or selling a home will probably be one of... Read More
Tensions can run high in both the selling and buying... Read More
HOW TO SELL YOUR HOME FOR TOP DOLLAR1. Make your... Read More
The CompromisThis document is the document you will sign agreeing... Read More
To own a home is one of the dreams every... Read More
Under Section 1031 of the Internal Revenue Code, owners of... Read More
If you haven't figured your credit worthiness and borrowing power... Read More
Are you profiting from O.P.P.? If not, why not? We... Read More
The art of using high-leveraged activities.Here I would like to... Read More
Do you need to sell your home quickly? If so,... Read More
It's high time someone advocated the use of common sense... Read More
Finding the right buy to let mortgage is crucial to... Read More
People sometimes confuse a home inspection and an appraisal when... Read More
Searching for just the right home can be very exciting.... Read More
A lot of buyers think that a new house is... Read More
In the old days people generally only bought land and... Read More
One of our investor students told us of an interesting... Read More
Virtually any state in the country has the appeal of... Read More
Maui is a great place for families of any size.... Read More
The phone range and Peter was on the other end... Read More
More and more individuals are realizing that real estate is... Read More
1. What happens to the seller's credit rating when they... Read More
When you're selling your own property, whether it's a house,... Read More
These real questions on new home starts and interest rates... Read More
A Realtor has just talked to you and said, "I... Read More
Did you know that you can save tens of thousands... Read More
Awaken to the sounds of softly rustling trees and tranquil... Read More
Whether you're a first-time buyer, selling your current home or... Read More
In the wake of Hurricane Katrina's wide path of destruction,... Read More
You hear it asked on the radio, in the newspapers... Read More
These real questions on 'How To' build are answered by... Read More
A foreclosure is an action taken against a property owner... Read More
So you've decided to take advantage of the booming real... Read More
If you want to become a real estate investor, find... Read More
If you're a real estate investor, here are several questions... Read More
Buyers think they love Italian tile and other hard floor... Read More
With over 30,000 residents, Jacksonville in central Arkansas is a... Read More
It is no secret that sellers want to sell high... Read More
For those of you who were not psychology majors the... Read More
Real estate investments come through a variety of different options.... Read More
Understanding and using yearly price growth statistics in an area... Read More
In a previous article we introduced you to the concept... Read More
To help you negotiate a fair sale price for a... Read More
Most Sellers set their initial asking price at an amount... Read More
Since the Northern Cypriots famously voted 'yes' to the UN... Read More
Changing social trends point to a huge rise in demand... Read More
Real estate continues to be a very important part of... Read More
Whether you are selling a house, townhouse, condo or apartment,... Read More
Moving to a new community can be a great adventure,... Read More
With so many estate agencies vying for your business, choosing... Read More
What's the difference between death and taxes?Death doesn't change every... Read More
How much do you really know about investment property? Accurate... Read More
Realtors are all a buzz about this new form of... Read More
Purchasing a home can be a complicated and confusing process,... Read More
Why property, some people ask when looking for an investment.... Read More
Signage, though quite fundamental in nature, plays an important role... Read More
The longer you are a landlord the more you strive... Read More
Whether you are a real estate investor looking for a... Read More
We all have seen some book called "How I Turned... Read More
One of the things that distresses us about our industry... Read More
Is your pet worth $100,000? It may be if you... Read More
Real Estate |