Tenancy in Common
Tenancy in Common (“TIC”) is when two or more parties each have an “undivided interest” in a piece of property and each party have an equal right to use the property, even if the percentage of ownership or shares differ in size. This form of ownership is common where the co-owners are not married or have contributed different amounts to the acquisition of a property. Unlike joint tenancy interest, which passes automatically to the survivor, upon the death of a tenant in common there must be a probate of the estate of the deceased in order to transfer ownership in the tenancy in common:

Advantages of a TIC


Tenancy in common is ideal for people who do not have sufficient funds to purchase 100% of a property. It has become a fast, easy and inexpensive way to diversify your portfolio and own a portion of large parcels of real estate in your IRA, 401k or other qualified retirement account. Larger parcels or acres of land in the path of growth are typically more attractive to developers and builders. Hence, a Tic may be a great solution for people who want to leverage their current real estate ownership into a significantly larger orpotentially more valuable parcel.

General advantages of TICs include:

  • You can avoid securing a mortgage or assume any debt to participate in land banking.
  • You can purchase any fractional amount of real estate as it relates to a specific property.
  • Participation in a TIC allows you to purchase more property that you could afford to purchase on your own.
  • You can still sell your property share at will as defined in the Co-Tenancy Agreement.
  • TIC offers you the opportunity to enjoy the benefits of real estate ownership with maximum flexibility.
  • If you purchase a TIC property in your Self-Directed IRA, there is no loss of IRA tax benefits and no tax penalties.

Using a TIC in Land Banking:

  • Each Owner receives an individual grant deed, fee simple and title insurance for his or her undivided percentage interest in the entire property.
  • A TIC is considered to its own entity and functions as one unit. All of the Co-Tenants participate in decisions regarding the disposition of the parcel of land.
  • In most starts and counties the only cost associated with maintaining the raw or pre-developed land is the property taxes. You only pay your equivalent share equal to your percentage of ownership.
  • A TIC ownership interest can be purchased, sold gifted, bequeathed by will, or inherited, and is subject to property taxes, gift tax, estate and inheritance taxes in the same manner as any property held in fee simple ownership.
  • Co-Tenants may sell their ownership to anyone in or out of the TIC as defined in the Co-Tenancy agreement.

Benefits of Working with LandDiva


We will help you identify the perfect parcel of property you want to acquire either with cash or your IRA. We recommend no more than four tenants in a TIC. We will help find other qualified owners of your TIC and you are given the contact information of the other Co-Tenants. We help you with the due diligence required for closing on your property. Closing can be completed in as few as 5 working days.

For more information on Tenancy in Common contact a representative today!
 

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