In one sentence
A form of co-ownership where multiple parties hold undivided fractional interests in a property, each freely transferable.
The longer version
Under a tenancy in common, several owners each hold a separate, undivided fractional interest in the same property, with rights to transfer their share. TIC structures appear in investment properties and 1031 exchange vehicles.
Lending to a TIC-owned property is complex, since multiple owners and their interests must be addressed in the loan documents and the collateral analysis.
Common questions
- What is tenancy in common?
- Co-ownership where multiple parties hold undivided fractional interests in one property, each free to transfer its interest.
- How do lenders finance tenancy-in-common properties?
- Usually by requiring all owners as co-borrowers, each typically a single-purpose entity, with agreements limiting partition and transfers.
- Why are TIC structures common in real estate?
- They are often used in like-kind exchanges, letting several investors own interests in one property.
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