Tenancy in Common

Tenancy in common is a form of concurrent ownership in which two or more people each hold a distinct, undivided fractional interest in the same property. Undivided means every owner has the right to use the whole of it rather than a marked-off piece; distinct means each interest is separately owned and separately transferable, and that each can be a different size.

What separates it from the alternative is the absence of survivorship. In a joint tenancy a deceased owner's interest passes automatically to the surviving owners; in a tenancy in common it passes into the deceased owner's estate and is disposed of by their will or, if there is no will, by the state's intestacy rules. That single difference is what makes tenancy in common the form used where the owners want their shares to go to their own families rather than to each other, and it is the form the law assumes unless told otherwise.

It is the default, and the statutes are unusually clear about that. California Civil Code section 686 provides that "every interest created in favor of several persons in their own right is an interest in common, unless acquired by them in partnership, for partnership purposes, or unless declared in its creation to be a joint interest ... or unless acquired as community property." New York's Estates, Powers and Trusts Law section 6-2.2(a) provides that a disposition of property to two or more persons creates in them a tenancy in common "unless expressly declared to be a joint tenancy." One is a community property state and the other a common law state, and both start in the same place. So the practical rule is that a deed naming two people and saying nothing more has almost certainly created a tenancy in common, whatever either of them assumed.

The shares can be unequal, and that is the feature most worth using deliberately. Nothing in the form requires two co-owners to hold halves. Where one person puts in seventy percent of the purchase money and the other thirty, the deed can say so, and the ownership then matches the contribution permanently rather than depending on anyone's memory. This is why unrelated buyers, siblings inheriting together, and business partners in a property usually end up here. It is also why the percentages should be set at the outset: reconstructing who paid what, years later, is exactly the argument the recorded fractions prevent.

A share is transferable, which is the risk that surprises co-owners. Because each interest is separately owned, a tenant in common can generally sell, mortgage or give away their own undivided share without needing anyone else's permission. The buyer becomes a co-owner alongside the others on the same terms. Nobody is forced out and nobody's fraction changes, but the people you own a house with can change without your agreement, and a co-owner's creditors can reach that co-owner's share. A written co-ownership agreement, including a right of first refusal, is the ordinary way to control this, and it is a contract between the owners rather than something the form of title supplies.

Death sends the share outward rather than sideways. When a tenant in common dies, their fraction is part of their estate and is dealt with by their will or by intestacy. Over two generations this is how a single family house comes to be owned by a dozen cousins in fractions of a sixteenth, none of whom can sell the property and several of whom may be hard to locate. The mechanism is not a defect; it is what "no survivorship" means, and it is worth anticipating when the co-owners are siblings who inherited together and intend to keep the property for a long time.

Any co-owner can force the issue, and the remedy is called partition. A tenant in common who wants out and cannot agree terms may bring a partition action. California's statute, Code of Civil Procedure section 872.210, allows the action to be maintained by an owner of an estate of inheritance in real property "owned by several persons concurrently". The court's first instruction, at section 872.810, is to divide the property among the parties according to their interests. Section 872.820 then requires a sale instead where the parties agree to that or where the court determines that "sale and division of the proceeds would be more equitable than division of the property", which for a single house is nearly always the answer, because a house cannot be cut in two. So the honest statement of the right is that one unwilling co-owner can usually end the arrangement, and on a single-dwelling property that generally means the property is sold.

What this form does not do. It is not a probate-avoidance device, because the share goes through the estate by design. It does not shield an owner from a co-owner's creditors. And it does not resolve who pays for the roof: liability for taxes, insurance, maintenance and mortgage payments between co-owners is a matter of agreement and of state rules about contribution, and the recorded percentages say who owns what rather than who owes what.

A deed conveys the property to two or more people, either stating their fractions or leaving them to be presumed. Each owner may use the whole property, and each owns a separate share they can sell, mortgage or leave by will. Income and expenses are divided by agreement or by the fractions. On a death the share goes into that owner's estate. If the owners cannot agree how to continue or how to exit, one of them can bring a partition action and a court will divide the property or order it sold.

A hypothetical illustration of how quickly the fractions multiply, and of what a partition sale then produces. Three siblings inherit a house as tenants in common in equal shares, so each holds one third. Two of them later die, each leaving their share equally to their two children, so those four cousins hold one sixth each, which is one third divided by two, and the surviving sibling still holds one third. Five owners across two different fraction sizes, and a voluntary sale now requires every one of them to sign.

One cousin wants the money and the others do not. He brings a partition action. The house is worth $600,000, and because a single dwelling cannot sensibly be divided the court orders a sale under the more-equitable test. After $36,000 of selling and legal costs the net proceeds are $564,000.

His one-sixth share is $564,000 ÷ 6 = $94,000. The surviving sibling's one-third is $564,000 ÷ 3 = $188,000. The three cousins who wanted to keep the house each receive $94,000 and no house. That is the outcome one co-owner out of five was able to compel, and it is the strongest argument for a written co-ownership agreement at the start. All figures are illustrative and costs vary widely.

Pros

• Shares can be unequal and recorded, so the title reflects who actually paid what.
• Each owner keeps control of their own share, including the ability to leave it to whomever they choose.
• No owner is locked in: a share can generally be sold or transferred without the others' consent.
• It is the default form, so it takes no special drafting to create and no words can be accidentally omitted.
• Partition gives every co-owner a way out even when the others refuse to cooperate.

Cons

• There is no survivorship, so each share goes through probate and the estate process it belongs to.
• A co-owner can sell their share to someone the others did not choose, and a co-owner's creditors can reach it.
• Ownership fragments across generations, and a property with many small holders becomes difficult to sell or refinance.
• Any single co-owner can force a partition, and on a house that usually means a court-ordered sale.
• The form says nothing about who pays for taxes, insurance or repairs, so disagreements about cost are not resolved by the title.
• Lenders generally want every owner on the loan, so financing a property with many co-owners is harder than it looks.