Owning property with others can be a bit tricky. Whether you’re thinking of buying property with family, friends, or even business partners, it’s important to know how the law looks at shared ownership.
In Illinois, one common type of co-ownership is called “Tenancy in Common.” This is actually the default way property is divided when two or more people own it together unless they’ve chosen something else.
At Woods & Bates, P.C., we’ve helped many people with property transactions, including those involving Tenancy in Common. We understand that sharing ownership can sometimes be confusing – we’re here to help break it down for you.
What is Tenancy in Common?
Simply put, Tenancy in Common means that two or more people own a piece of property together, but each owns a separate, undivided share. Equal shares aren’t required, so one person could own, say, 60% of the property, while another owns 40%, or it could be split evenly.
Here are a few important things to know about Tenancy in Common:
- Undivided Interest: Even if you own only a small percentage, you still have a right to use the entire property.
- Unequal Ownership: As mentioned, shares don’t have to be equal. You can agree to split the ownership however it suits you.
- Transfer of Ownership: You’re free to sell or give away your share without asking for permission from the other owners.
- Heirs Inherit: If one of the owners passes away, their share doesn’t go to the other owners. Instead, it goes to their heirs or whoever is named in their will.
Advantages of Tenancy in Common
This type of ownership offers some flexibility, which is why it’s a popular choice for unrelated parties and investment properties.
- Flexible Ownership Percentages: You can divide ownership in any way that makes sense for your situation.
- Transfer of Ownership Without Consent: If you want to sell or gift your share, you can do so without needing permission from the other owners. This can make it easier if one person wants to move on.
- Estate Planning Benefits: Since your share of the property passes to your heirs when you pass away, it’s easier to plan for the future and make sure your loved ones are taken care of.
For many people, Tenancy in Common can work well, especially if you’re buying a property with friends, business partners, or as part of an investment.
Potential Drawbacks of Tenancy in Common
But, it’s not all smooth sailing. There are a few challenges to keep in mind if you’re considering this type of ownership.
- Disagreements Among Co-Owners: Since everyone has the right to use the entire property, conflicts can arise if the owners don’t agree on how the property should be used.
- Difficulty Selling: If one person wants to sell the whole property, but the others disagree, things can get complicated. This could lead to a partition lawsuit, where a court forces the sale of the property.
- Creditors: If one co-owner has debts, creditors could place a lien on their share of the property, which could affect everyone involved.
Navigating Tenancy in Common in Illinois? We Can Help
Co-owning property can open up a lot of opportunities, but it can also bring challenges. At Woods & Bates, P.C., we’re here to help guide you through Tenancy in Common and make sure you’re prepared for the responsibilities that come with it.
Whether you’re just starting to consider a Tenancy in Common arrangement or you’ve already entered into one and need legal advice, we’re ready to help. Our attorneys provide personalized consultations, in-person or virtually, to walk you through the process and answer your questions.
If you’re ready to learn more or need help with co-ownership, feel free to reach out. Contact us today to schedule a consultation – we’re here to assist you with your real estate needs.