People who buy homes or property together aren't always married. When they're not, they typically take title to the house as tenants in common. Tenancy in common is one of several forms of ownership, but it tailors particularly well to situations with multiple owners who don't necessarily want to spend the rest of their lives together. Because of their flexibility, however, tenancies in common also have a few drawbacks.
Unlike joint tenants or tenants by the entirety, tenants in common individually own a specific percentage of the property, and these percentages need not be equal. With joint tenancies, by contrast, owners have an identical share – two co-owners would each own 50 percent, or four owners would each own 25 percent. Tenancies by the entirety, a type of deed reserved for married couples, give each party an unallocated 100 percent interest. With a tenancy in common, one tenant might own 50 percent, one might own 30 percent, and a third might own 20 percent. Percentages are typically based on how much money each of you contributes to the property. Expenses such as property taxes, mortgage payments and insurance are typically divided according to the same percentages.
Sale of Shares
Any co-owner of a tenancy in common has the right to sell his share without the consent of the other tenants. For example, if you purchase a home with two friends, then you decide to leave the arrangement because you want to get married, you can sell your interest to a third party and be on your merry way – assuming the third party doesn't mind sharing ownership with the other two tenants. Should you sell your share, your buyer would maintain your percentage ownership. If your share as a tenant in common is 30 percent, the new buyer owns 30 percent, and the ownership shares of the other tenants aren't affected.
You can also bequeath your share of the property to anyone you like if you're a tenant in common. If you die without a will, your share will go to your relatives in an order of succession set by state law – it doesn't automatically revert to your other tenants. Tenancies in common don't carry rights of survivorship, so when one of you dies, the others can't inherit your ownership percentage unless you specifically name them in your will.
If you want to get out of a tenancy in common but you can't find anyone willing to purchase just a portion of ownership of a house – and this is a common occurrence – you have one other option. You can file a petition with the court to partition the property. The court can't void the deed you signed, but it can order the sale of the home so you can get your money out. When the property is sold, you'd receive 30 percent of the proceeds if you owned a 30 percent share of the property. Partition is usually a last resort, however. It presumes that your other tenants are either unwilling or unable to buy your share, which is also an option.
If one of your co-tenants owes a sizable debt, his creditor also has the option of filing for partition and forcing the sale of the property. Your percentage ownership isn't at risk, however. The creditor can only recoup its money from the debtor's share of the sale proceeds.