What are some tenants in common rights and liabilities that are important to know?
We’ll be exploring the rights one has when holding title as tenants in common (TIC) , co-tenancy, and right of survivorship.
Tenants in Common Rights
When several people own real property as tenants in common, each owner has an equal right of possession to the property.
In other words, each owner can use the entire property even though they own only a portion of the property.
Therefore, even if one cotenant owns only 1% of the property while another cotenant owns 99%, the 1% owner has an equal right to use the property as the 99% owner.
Moreover, one cotenant cannot exclude another cotenant from the property.
Cotenants
If one cotenant is in sole possession of the property, the other cotenant generally cannot collect rent from the cotenant who is in possession.
The cotenant in exclusive possession of the property also cannot acquire the title of his cotenant just through his exclusive possession.
The cotenant in possession must satisfy all the elements of adverse possession in order to acquire the title of his cotenant.
If the cotenants lease the property to a third party, then each cotenant has a right to collect the rental income based on their proportionate ownership interest in the property.
Therefore, if one cotenant owns 1% of the property, then he is entitled to 1% of the rent collected.
Along the same lines, each cotenant is responsible for all expenses of the property based on their proportionate ownership interest, including but not limited to utilities, mortgage, property taxes, and insurance.
Right of Survivorship
There is no right of survivorship when owners take the property as tenants in common. Therefore, when one cotenant dies, then his share does not automatically transfer to the other cotenant. Rather, his share transfers to a chosen beneficiary, or, if no beneficiary was named, then through intestacy through the probate process.
Each cotenant further has the right to unilaterally gift or sell their ownership interest in the property to anyone. When this happens, then the purchaser will be the new cotenant of the existing cotenant.