Tenants in Common (TIC)
What it is:
Tenants in common (TIC) describes an ownership status that applies when a property is severally owned by two parties.
How it works (Example):
If two co-owners of a property are tenants in common, they own the property independent of one another. This means that each tenant does not enjoy the benefits of survivorship in the event of the other's death.
In other words, the ownership portion belonging to the deceased is not automatically inherited by the surviving owner. Rather, the deceased's ownership portion is passed down to the beneficiary designated in the will of the deceased. This beneficiary, or heir, enjoys the benefits of property ownership and assumes all liability in connection with his/her share of the property. Moreover, since all action on the property must occur jointly, the beneficiary, under TIC, has a legitimate voice on any decisions made in connection with the property.
Why it Matters:
TIC ensures that a co-owner of a property may legally pass his/her share of the property to a designated heir. For this reason, it is important that the ownership portion is clearly delineated so as not to encroach upon that of the other tenant.