Tenancy in common (TIC): What is it and how does it work?

Tenancy in common (TIC) is an important legal concept to understand. It is a flexible, common structure of property ownership that allows friends or non-married partners to buy a property, own unequal shares in it, and pass their share to someone other than the other owner.

Key takeaways:

• Tenancy in common is a legal arrangement in which two or more unrelated people own a property.
• Both parties can use the entire property even if they have unequal ownership shares.
• A TIC has no right of survivorship, meaning that if one owner dies, their share passes to their designated heirs or beneficiaries rather than to the other owner.

Key features of tenants in common

TIC allows you to buy property with any other person, regardless of your relationship with them. This may apply if you’re buying a house with someone you’re not married to. This is more common than you might think: Data from a JW Surety bonds survey states that 15% of Americans have bought property with someone other than their romantic partner.

However, TIC has no right of survivorship, meaning that if one owner dies, their share of the property passes to their beneficiaries or heirs rather than to the other owner. Each person’s share of the property is treated as a separate entity – known as an undivided interest.

Because of this feature, each owner can do as they please with their share. They can sell, transfer, or borrow against their share of the property. This means your co-owner may sell their share, and you’ll co-own a property with someone you don’t know.

The terms of the TIC agreement may grant the other owners the first right to buy the shares or force a sale of the entire property. An owner who wants to leave a TIC agreement can file for a legal partition agreement, and a court will decide how to split the property or require it to be sold.

TIC example

Say two friends buy a lake house for $400,000. One of them pays $150,000, and the other pays $250,000. That means the first friend owns 37.5% of the house, while the second friend owns 62.5%. Despite their different ownership shares, both friends can use the entire property.

If the first friend dies, they can leave their share to a relative instead of it automatically transferring to the second friend. The family member then inherits 37.5% of the lake house.

How do property taxes work with tenants in common?

When you own property, you’re responsible for paying any property taxes assessed by your local government. Often, if you have a mortgage, you pay property taxes along with your regular mortgage payment and your lender holds that money in escrow.

If you don’t have a loan or you aren’t paying your property taxes through escrow, you’ll need to pay taxes directly to your local government or tax assessor.

A tenancy in common does not subdivide a property. It remains one unit in the eyes of the law, which means that taxes will be assessed against the whole property, not in separate shares for each owner. That means all owners are whole and jointly responsible for paying property taxes.

Your tenancy-in-common agreement should explicitly spell out how property taxes will be handled or split. However, you should still be prepared to foot the entire bill in an emergency in case your tenant in common passes away or faces financial hardship.

Pros and cons of tenancy in common

Tenancy in common lets you own property with someone else you’re not necessarily related to, but it also has some drawbacks to keep in mind.

Pros

Some of the benefits of tenancy in common include:

Increases access to homeownership

Homes are getting more and more expensive, with the median single-family home selling for more than $400,000 as of February 2026. Buying a home and handling the ongoing costs can be a huge hurdle for a single person, so tenancy in common can make it easier for people to afford homeownership.

Owners can be added at any time

You can add a new owner to a tenancy in common at any time, making it easy to adapt your ownership as your life changes. For example, if you get married, you can add your spouse to the tenancy in common. All parties must agree to the addition and the deed must be updated to reflect the change.

This also means you can sell your share in the home to someone else, such as a family member, without affecting the other tenants in common.

Shares can be unequal

You don’t necessarily need to split ownership of a home 50/50 when you have a tenancy in common. If one of you has more financial resources than the other, you can have an uneven split that still benefits all parties involved.

Cons

Tenancy in common isn’t perfect for everyone, so keep these drawbacks in mind.

There’s shared liability

When you own property jointly with someone else, you have a shared liability for the home with them. For example, if a contractor places a lien on the home because of work your tenant in common ordered but did not pay for, you may face the consequences of that lien.

One person is needed to sell

There’s nothing stopping your tenant in common from selling their share in the property. That means you could wind up owning the property with someone you don’t know and possibly don’t particularly like.

Selling shares in the property rather than the entire property at once may also make things like capital gains taxes complicated.

Inheritance isn’t automatic

With other forms of joint ownership, if one owner dies, their share of ownership automatically passes to the other owner. With tenancy in common, the death of one tenant does not result in automatic transfer of ownership to the other tenant. Instead, the decedent’s share can be inherited by whoever they name in their will. In some cases, inheritance can be complicated or take time to pass through probate.

Alternatives to TIC

Tenancy in common is one of many ways you can acquire and own property or shares in a property. Here’s a look at some alternatives to TIC:

• Tenancy in severalty: The opposite of TIC. Only one person owns the property and controls all aspects of it.
• Joint tenancy: Similar to TIC, but all parties have equal ownership shares that automatically transfer to the other tenants upon the death of one of the parties.
• Tenancy by the entirety. Available only to married individuals, tenancy by the entirety means that each owner has a complete and undivided ownership interest in the property. If one spouse dies, the other inherits full ownership.

Property law may vary by state, so it’s always good to consult an attorney or real estate professional with any questions you may have.

FAQ

Before opting to buy a home as tenants in common, make sure you understand these aspects of this unique form of homeownership.

How do tenants in common affect taxes?

Even if you own a home as tenants in common, your local tax assessor will assess taxes on your property as a single unit. That means that both you and your co-tenant are responsible for the taxes. Your tenancy in common agreement should outline how you’ll handle taxes.

Do tenants in common pay capital gains taxes if they sell?

Yes, tenants in common do owe capital gains taxes if they sell the property for a profit.

Can tenancy in common be dissolved?

Yes, a tenancy in common can be dissolved by mutual agreement of the tenants, by sale of one tenant’s share to the other tenant, or by the direction of one tenant’s will after their death.

What are the responsibilities of tenants in common?

Tenants in common are usually jointly and severally liable for things like the maintenance of the property, utilities, the mortgages, and taxes. This means that while their ownership shares are separate, their responsibility for the underlying property debts is collective, meaning any one owner can be held responsible for the entire debt.

Can another person be added to a tenancy in common agreement?

Yes, another person can be added to a TIC agreement. All parties must agree to the addition, and the deed must be updated and recorded.

The bottom line: Tenancy in common can help you achieve homeownership

Tenancy in common can be a way for multiple people to have an ownership interest in a property. This may make homeownership more achievable by letting you split costs such as the down payment, mortgage payment, and property taxes with other people while also giving you the flexibility to sell or borrow against your share of the property in the future.

You should carefully consider your responsibility for the total cost of the property should your partner in a property become unable to cover their portion of the expenses. Real estate professionals such as a real estate attorney may be able to help you see the pros and cons of this kind of ownership.

If you’re ready to buy a home, you can apply for a loan with Rocket Mortgage.