Tenancy in Common

Terms:


Tenancy-in-Common
A tenancy held by two or more people, in equal or unequal shares, each person having an equal right of possession over the entire property, but no right of survivorship.

Right of Survivorship:
A tenant’s right to succeed an estate upon the death of another tenant.


A tenancy-in-common is a form of concurrent ownership where each co-tenant owns a separate and distinct share of the property. However, at the same time, each tenant has the right to possess and use the entire property. Any conveyance of property to two or more people who are not husband and wife will be presumed to create a tenancy-in-common unless there is clear intent to the contrary by the grantor. As we discussed in the previous chapter, it is not necessary that the tenants have equal share in the property. For example:

Fred and Barney buy an apartment together for one hundred thousand dollars. Fred puts in seventy thousand dollars and Barney puts in thirty thousand dollars. In this case Fred and Barney have a tenancy in common where each of them has a distinct share in the apartment, but both of them can use and enjoy the entire apartment. Barney can use the entire apartment and not just thirty percent of it. Fred can use the entire apartment and not just seventy percent of it. However, if they sell the apartment Fred will get seventy percent of the sale price and Barney will get thirty percent of the sale price.

A tenancy-in-common is considered to be the least “concurrent” of the forms of concurrent ownership. Aside from the equal right of possession, the two parties' ownership of the property is considered to be separate from each other. Thus, a tenancy-in-common must be partitioned upon the demand of any party. For example:

Fred and Barney are tenants-in-common on Whiteacre. Fred and Barney get into a big fight because they are both pursuing Wilma. Eventually, Wilma marries Fred and Barney is steaming mad. He at once demands that the property be split up. He is entitled to have this demand carried out. In other words, he can force Fred to physically split the property into two sections and each party will get a percentage of the split property that is equal to his ownership interest in the property. If Fred and Barney cannot agree on how to physically split the property, Barney can bring a "partition action" in court and the court will decide on a fair partition of the property.

In addition, either party may sell or transfer his or her share of the property to any person, for any reason. If one of the tenants does sell or transfer his or her share, then the buyer takes the seller’s place and becomes a tenant-in-common with the party who did not sell his or her share. For example:

Fred and Barney are tenants-in-common on Whiteacre. Fred sells his share of the tenancy to Kazoo. Kazoo is now a tenant-in-common with Barney. Kazoo’s interest in Whiteacre is now equal to whatever Fred’s interest was.

A key point that distinguishes a tenancy-in-common from the other tenancies is that a tenant-in-common does not have a “right of survivorship” in the property. This means that when one of the tenants-in-common dies, his or her share does not automatically pass to the other tenant. Instead, the decedent’s share passes with the rest of his estate to his heirs or to whomever he gives his or her share by a will. For example:

Fred and Barney are tenants-in-common on Whiteacre. Fred leaves a will that states that when he dies, his friend Kazoo should inherit his share of Whiteacre. When Fred dies, Kazoo inherits Fred’s share. Thus, Kazoo is now a tenant-in-common with Barney just as in the previous example. 

In addition to the rule discussed earlier that the tenants-in-common need not own the same percentage of the property as each other for a tenancy-in-common to exist, they also need not own the same kind of estate. One of the tenants may hold his or her share in fee simple absolute, while another may only hold a life estate in his or her share. This does not affect the right of possession of each party. Each tenant who owns a present interest in the property has an equal right of possession. For example:

  1. Fred owns Blackacre in fee simple absolute. He conveys a one-half interest in Blackacre to “Barney and his heirs, so long as the polar ice caps don’t melt.” Fred owns a one-half interest in fee simple absolute as a tenant-in-common with the other one-half interest that is currently owned by Barney, even though Barney only has a fee simple determinable in that half. Barney has a right to possess the full property even though his estate is inferior to Fred’s and even though Fred retains a possibility of reverter in Barney’s half. Note that if the event happens (the polar ice caps melt), Fred’s possibility of reverter will kick in and he will own both halves of the property in fee simple absolute. In such a case, the two halves would “merge” (since they are owned by the same person) and Fred would own the whole property in fee simple absolute.
  2. Fred owns Blackacre in fee simple absolute. He conveys a one-half interest in Blackacre to “Barney and his heirs, so long as the polar ice caps don’t melt, and then to Pebbles.” Fred owns a one-half interest in fee simple absolute as a tenant-in-common with the other one-half interest that is currently owned by Barney in fee simple determinable and in which Pebbles has an executory interest. Note that the current tenant-in-common with Fred is Barney since he has the present interest. Pebbles will only be considered a tenant-in-common with Fred when and if the polar ice caps melt. At that time, of course, Pebbles will own a one-half interest in Blackacre in fee simple absolute.