Tenancy In Common
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Jun 18, 2024
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A tenancy in common, also known as TIC, refers to an estate with joint ownership, typically shared between two individuals. It differs from joint tenancy in that if one owner were to pass away, their share of the property does not automatically transfer to the other owner. Instead, it goes to the person designated in the deceased owner's will. In a tenancy in common, owners can hold unequal shares of the property, and these shares can be freely transferred during the owner's lifetime or through a will. For instance, one owner may hold 2/3 of the property while the other holds 1/3. Both owners have the right to occupy the property. It is essential to recognize the distinctions between joint tenancy and tenancy in common.
In a joint tenancy, there is a concept known as "right of survivorship," which means that if one tenant passes away, the remaining tenants inherit the deceased tenant's share of the property. When people co-own property as tenants in common, there is no automatic passing of ownership to the other co-owners when one of them passes away. Instead, each co-owner can decide who will inherit their share of the property. According to Iowa State University (n.d.), under historical
common law, the creation of a joint tenancy required the co-owners to meet the following conditions: (1) they must have acquired the property interest at the same time; (2) they must have
the same title to the property in the deed; (3) they must have the same interest in the property; and (4) they must have the right to possess the whole property. If any of these conditions were not met, the arrangement became a tenancy in common.
In order to end a tenancy in common, the best method is through mutual agreement. There are several ways to do this, such as dividing the property and assigning the portions to the tenants. In
the event that the property can be subdivided, each tenant has the option to sell their portion individually. However, if it is not feasible to divide the property, it can be sold as a whole and the
profits will be allocated among the tenants accordingly. In case the tenants are unable to reach an
agreement, Section 41 of the Property Law Act enables a co-owner to request the court to issue an order for the sale of the property, with the resulting proceeds being divided among the tenants,
or for the property to be divided and distributed among them.
In the legal case of Powell v. Estate of Powell, No. 88A01–1402–PL–59, the central issue pertains to the inheritance of a property by two brothers, Kevin and Gary Powell, from their late father's estate. The court's decision clarified that the property in question did not have a right of survivorship. Instead, it was categorized as a tenancy in entirety, commonly known as "tenants by the entireties." This legal classification meant that as tenants in common, both sons were entitled to equally share the property left to them by their father upon his passing.
In the case of Fitton v. Bank of Little Rock, a pivotal legal matter regarding tenancy in common was addressed. The case involved Mr. and Mrs. Fitton, a married couple who jointly owned a property. Despite their shared ownership, Mr. Fitton unilaterally signed a promissory note with the Bank of Little Rock without obtaining the knowledge or consent of Mrs. Fitton. The bank contended that Mrs. Fitton had relinquished her claim to the property, citing abandonment. However, the court's ruling highlighted that this event took place prior to the finalization of the
couple's divorce. As a result, Mrs. Fitton was deemed to maintain rightful ownership of her share
of the property.
Sources:
Iowa State University. (n.d.). Court Clarifies Test for Creation of Joint Tenancy. Retrieved from https://www.calt.iastate.edu/article/court-clarifies-test-creation-joint-tenancy
Dylan & Inns. (2014). SEVERING THE CO-OWNERSHIP OF PROPERTY – TENANTS IN COMMON. Retrieved from https://dylaninns.com.au/blog/2016/5/15/severing-the-co-ownership-
of-property-tenants-in-common
Cornell Law School. (n.d.). Tenancy in Common. Retrieved from https://www.law.cornell.edu/wex/tenancy_in_common 4
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