Tenancy in Common Agreement - Single Dwelling - up to 4 Owners
The two most common forms of joint ownership of real property are tenancy in common and joint tenancy. There are two main differences between them. First, tenants in common may share unequal undivided interests in their property, but joint tenants' interests must be equal. Second, joint tenancy carries with it the right of survivorship. This means that on the death of a joint tenant, the surviving joint tenant(s) take the entire interest directly without going through probate. The interest of a tenant in common forms part of their probate estate.
Consequently, tenancy in common is the simplest way for two or more owners to hold title to real property in unequal shares or if they desire to pass their respective interests in the property to their heirs upon their death.
It is necessary for tenants in common to establish in writing:
1. their respective ownership interests in their property if they own unequal shares (otherwise, a court will assume the owners' interest in the property is equal, including equity, even if one owner made a much larger down payment than another owner); and
2. boundaries between common areas and each owners private living area (otherwise, each owner will have the right to enter any area of the property at any time regardless of the size of their ownership interest).
It is also highly advisable for tenants in common to enter into an agreement to clarify and establish their obligations in other areas. For instance, the owners may want to provide a method for making decisions, detail how they will manage the property, obligate each owner to contribute money as needed, and provide a process for the sale or lease of a co-owner's interest in the property.
