ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Tenancy in Common

Updated on May 2, 2011

A type of common ownership

December 26, 2006

Tenancy in common is a legal term that refers to property held by two or more people with each having ownership of a certain, undivided, portion of the property.

Each person has access to and use of the entire property but only owns a portion of it. Upon the death of an owner, the portion of the property owned by the deceased becomes a part of that person's estate and does not automatically go to the other owner or owners.

Two very common types of tenancy in common are joint bank accounts and real estate. Here, two or more people can share a bank account or a piece of real estate while still ensuring that their individual share of the asset will go to their estate (and be transferred to their heirs according to their will).

This is in contrast to joint tenancy, which is another legal means by which property can be held in common. The main difference between tenancy in common and joint tenancy is that, with joint tenancy, the ownership of an owner's share automatically transfers to the surviving owners upon that person's death.

Why would a person want to have tenancy in common instead of joint tenancy or vice versa?

People generally choose joint tenancy when they want the other party or parties to have their portion upon death. Joint tenancy is usually used by married couples or by close relatives such as parents and children, siblings, etc. In these cases the parties usually want the other to have their portion of the property upon death and joint tenancy makes it simple with no need for a will (for this property only) or having to worry about the court awarding their share to someone else if they die intestate. For most people this will work, but you might want to check the inheritance laws in your state or jurisdiction to make sure that the property in question will pass automatically to the other joint tenants upon death.

Tenancy in common, on the other hand, is generally chosen when there is a need for two or more individuals to share a piece of property but the relationship is not such that any of them want to pass the property on to the other holders in the event of death. Two or more people who share living quarters and decide to purchase a home together in order to benefit from the income tax deduction (in the U.S.), two or more people who wish to purchase property to rent out, two relatives or close friends who want to share a piece o f resort property but pass it on to their respective children upon death, etc. are examples of the situations in which people would choose tenancy in common.

A friend of mine was once living in the upper unit of a duplex and learned that the owner planned to sell. He couldn't afford to purchase the house alone and approached me knowing that I was looking to purchase a home for the tax break but didn't want a mortgage payment higher than the rent I was paying for the apartment I lived in at the time.

We went together and brought the house with me taking the lower unit and my friend remaining in the upper unit. We took the property as tenants in common and opened a bank account, also as tenants in common, at the bank where we got the mortgage. Each of us then deposited our half of the mortgage payment to the account each month and the bank then withdrew the full payment automatically. Three years after buying the property both of us married our respective fiancé's and moved out of town. We kept the house for another ten years as a rental property, then sold it and split the proceeds 50/50.

Comments

    0 of 8192 characters used
    Post Comment

    • profile image

      EnTrust 

      11 years ago

      This kinda stuff you really need to know as you build a portfolio of assets. Thx for the article.

    • profile image

      tenant in common 

      11 years ago

      here is a useful site explaining tenant in common investments too.

    • jimmythejock profile image

      James Paterson 

      11 years ago from Scotland

      good hub chuck thanks...jimmy

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)