With the property market moving more compared to earlier in the year, a common question we see being asked is if tenants in common is a good idea for individuals.
Whether tenants in common is a good idea completely depends on the specific circumstances and goals of the individuals involved. At Bromfield Legal, we are experts in Conveyancing and Property Law and discuss below some factors for you to consider. We would always recommend consulting with a legal professional to best practice, as each person’s state of affairs is different.
What is tenants in common?
Tenancy in Common (otherwise known as TIC) is a legal arrangement in which two or more parties share ownership rights in a real estate property or parcel of land. Each independent owner may control an equal or different percentage of the total property, whether commercial or residential. The parties are known as tenants in common. This is a popular option for couples that aren’t married and would rather have security in their agreement. It is also a great alternative for friends moving in together, as now, more than ever, it is a popular way for first time buyers to fund their home.
What does tenants in common provide?
Shared Ownership: Tenants in common is a form of joint ownership where each owner holds a share of the property. This can be beneficial when multiple individuals want to have ownership rights over a property while maintaining separate interests.
Flexibility: TIC allows for flexibility in ownership shares. Each owner can have a different percentage of ownership, which can be advantageous if individuals contribute varying amounts of capital or have different investment objectives.
Estate Planning: Tenants in common can be useful for estate planning purposes. Each owner can specify their desired beneficiaries for their share of the property, ensuring that their assets are distributed according to their wishes upon their death.
Shared Expenses and Responsibilities: Owners typically share expenses and responsibilities related to the property. This can include costs for maintenance, repairs, and property taxes. It’s important to have clear agreements and communication among the owners to avoid conflicts.
Selling or Transferring Ownership: Allows for individual owners to sell or transfer their share of the property independently. This flexibility can be beneficial if an owner wants to divest their interest or if there is a change in ownership structure desired by one or more parties.
Understanding the law – why would I need a solicitor?
Potential Disputes: With shared ownership, there is a potential for disputes to arise, particularly if there are disagreements about the use, management, or sale of the property. It’s crucial to have a clear legal agreement in place that outlines decision-making processes, dispute-resolution mechanisms, and exit strategies.
Ultimately, whether tenants in common is a good idea depends on the specific needs and goals of the individuals involved. We urge you to consult with a legal and financial professional like Bromfield Legal to get a better understanding of the legal implications and to determine the best ownership structure based on the specific circumstances. As specialists in the industry, we take pride in our ability to provide an exceptional service.
For expert advice, please contact one of our solicitors based at our offices in Nuneaton or Warwick. We can also advise you over the phone if preferred, please telephone our offices on 024 7638 2343 to make an appointment.