What Are Tenants In Common? All You Need To Know

When a loved one passes away and owns property with someone else, the probate process can feel overwhelming. Questions often come up right away, especially about “what is tenants in common”, if the deceased person’s share passes automatically to the surviving owner, or it becomes part of the decedent’s estate and must go through probate.

This article explains how this form of ownership may affect who inherits the property, whether conflicts arise between heirs and co-owners, how it works in Georgia probate cases, and what steps you can take to protect your loved one’s property and your family.

What Does Tenants in Common Mean?

Tenants in Common (TIC) is a form of legal arrangement in which two or more individuals own an undivided interest in the same property, even though each person’s share may differ.

Unlike joint tenancy, TIC doesn’t include right of survivorship here, meaning owners can sell, lease, or mortgage their specific share independently. Also, when one tenant passes away, the deceased’s shares don’t automatically pass to the remaining tenants.

Instead, they will be transferred through the decedent’s estate, which could mean to the surviving spouse, family members, or other heirs or beneficiaries named in a will.

While shares can differ, all co-tenants are generally equally liable for property taxes and debts.

Tenants in common in Georgia

Tenants in common in Georgia follow the same general rules as in most US states. The basic definition is the same: two or more people own the same property at the same time. Each owner has their own share and has the same right to use the entire property.

However, tenancy in common is the default form of co-ownership in Georgia. If a deed names two or more owners but does not clearly state “joint tenancy with right of survivorship,” Georgia law assumes the owners hold the real property as tenants in common.

Because there is no right of survivorship, the deceased’s share becomes part of their estate and must pass through probate. The share is then transferred in accordance with the person’s will or, if there is none, under Georgia’s intestacy laws.

Georgia also allows any tenant in common to request a partition action if the owners cannot agree regarding managing or selling the property. A court may divide the property or order it to be sold and distribute the proceeds based on each owner’s share.

How Does Tenancy in Common Work?

When you buy property as a tenant in common, you may hold a different ownership percentage than the other owners, but you share equal rights to use the entire property. Even if your financial share is smaller or larger, you cannot claim ownership of any specific section or portion of the property.

After creating the first property ownership, you may create a TIC or add a new property owner anytime you want. However, doing so may affect the overall ownership structure and lead to disagreements.

If you and the other owners cannot agree on managing or selling the property owned, you may ask the court to step in. In that situation, a judge can order the property divided or sold, with the proceeds distributed according to each owner’s share.

Navigating the taxes in a tenancy in common agreement

Under Georgia law, property taxes for a tenancy in common are calculated for the entire property, not for each individual ownership share. This means that all owners are responsible for paying the property’s taxes.

Otherwise, you may be personally responsible for the entire amount, even if you own just a percentage of the property. It’s up to the co-owners to determine how they’ll split the tax burden, but it’s wise to have a written agreement laying out the specifics.

How to dissolve a tenancy in common property

Dissolving a property held in tenancy in common is pretty straightforward. Here are the methods you may typically use to do this:

• Purchase the other co-owners’ shares: you may dissolve a tenancy in common by buying the ownership from the other tenants. This way, the TIC is dissolved, you become the sole owner of the property, and you may continue to occupy the entire property.
• Sell the property: the second method for dissolving a tenancy in common is for all tenants to agree to sell the property on the open market. The proceeds from the sale would then be distributed among them based on their respective ownership percentages.
• Dissolve ownership in court: When a TIC agreement cannot be dissolved through negotiation or mediation, the contract is terminated in court. In this case, a court usually assesses the circumstances and may order the sale of the property at auction or its division among the tenants in accordance with their ownership shares. This option is usually a last resort.
• Foreclosure: When one or more tenants in common fail to pay their share of the mortgage, the lender may begin foreclosure. Foreclosure alone does not end a tenancy in common. However, if the property is sold and ownership passes to a new owner, the tenancy in common may end because the shared ownership no longer exists.

Owning a property as tenants in common has its own pros and cons.

Benefits of Tenancy In Common

• Affordability: making property ownership much easier for all tenants in common is one of the most important advantages of joining a TIC agreement. By pooling financial resources with other buyers, you may split the costs of the down payment, mortgage rate, fees, taxes, and other expenses associated with buying and maintaining a property. This way, you are able to buy a bigger house or a larger property that you otherwise can’t afford.
• Maintenance: Owning a home comes with ongoing expenses, such as utilities, repairs, and upkeep. In a tenancy in common, these costs are shared among the co-owners. Splitting the responsibilities can make managing the property more affordable and easier for each owner.
• Mortgage approval: lenders tend to favor multiple owners because the combined income and assets may increase the chances of qualifying for a mortgage. This can be advantageous if you don’t meet the income or credit requirements on your own.
• Flexible options: as mentioned before, tenants in common don’t have to split their property equally. Also, they can sell their share of the property or pass it to their heirs. This flexibility makes it easier to arrange ownership based on what suits the best for everyone involved best.

Disadvantages of Tenants In Common

The main tenants in common problems arise when owners disagree over finances, inheritance, or control of the property. Below are some of the potential disadvantages that may occur during this agreement:

• Property doesn’t automatically transfer to heirs upon death: in a tenancy in common, the ownership of the deceased doesn’t transfer automatically to the other TIC . That can create difficulties for the other tenants.
• Potential for default: When one co-owner defaults on their financial obligations, it can create serious problems for the others.
• Impact on credit history: When tenants in common are jointly listed on a mortgage, they share responsibility for the loan and related payments. If one owner fails to pay their share, it can negatively affect the credit of all owners listed on the mortgage.
• Complicated property administration with multiple owners: Administering a property in common with other co-owners is not simple. Decisions about maintenance, expenses, taxes, insurance, or selling the property often require coordination among co-owners. Therefore, being a tenant in common might simply not be worth the trouble for some people.

Examples of Tenancy In Common

In Georgia, a common tenancy in common situation happens when a married couple buys a home, but the deed is not set up as a joint tenancy. Instead, the deed lists them as tenants in common, often without them realizing it.

For example, John and Mary are married and buy a home. The deed lists them as tenants in common, not as joint tenants with right of survivorship. Each of them owns a 50% share of the property.

When John dies, his 50% share does not automatically pass to Mary. Instead, John’s share becomes part of his estate. That share is distributed according to his will, or under Georgia probate law if he had no will.

Mary keeps her 50% share, but the other 50% may go through probate and could be inherited by someone else, such as a child or other family member.

What Happens When One of the Tenants in Common Dies?

In Georgia, tenancy in common does not include a right of survivorship by default. Therefore, when a tenant in common dies, their share of property ownership doesn’t automatically transfer to the remaining TIC tenants.

Instead, the deceased person’s share of property becomes part of their estate. What happens next depends on whether they left a will:

• If the decedent left a will, the ownership interests pass to the beneficiaries named in it.
• Without a will, the deceased’s share will be distributed to their heirs under Georgia’s intestacy law.

In both cases, the transfer of ownership usually involves probate, where the court determines who has the legal right to inherit it.

After probate is completed, the heirs or beneficiaries step into the deceased owner’s place as tenants in common. This means they will co-own the property with the remaining owners, with the same responsibilities and rights.

If you, as a decedent’s heir, and the surviving owners don’t agree on how to use, manage, or sell the property, you may ask the court for a partition. This may lead to the physical division of the property, and the proceeds will be divided between the owners, according to each tenant’s share.

This is the main reason why ownership without surviving rights (as tenants in common) may create complications after death, especially when multiple owners or heirs are involved.

Joint Tenants vs Tenants In Common. How To Choose Among Them?

Many people search for tenants in common with right of survivorship, but this feature actually applies to joint tenancy, not tenancy in common. To better understand how they work and which of them suits you best, below is a list of the main characteristics of each type of co-ownership arrangement:  

However, before deciding between tenants in common vs joint tenants, you should analyze the main characteristics of each, based on your priorities.

Let’s break them down:

• Right of Survivorship – when you want your share to automatically pass to the remaining joint tenants, then Joint Tenancy with Right of Survivorship (JTWROS) is the best option. Otherwise, your share will go into your estate and will be inherited by your beneficiaries or according to the intestacy law.
• Ownership shares – if holding equal interests in a property is important for you, then a joint tenancy arrangement might be the appropriate choice. But if you want to hold a portion equal to your financial contribution, you should opt for tenancy in common.
• Tenants in common transfer of ownership – when you want to name specific beneficiaries for your shares, tenancy in common offers greater flexibility than joint tenancy.
• Management & control – joint tenancy requires unanimous consent on property decisions, which may lead to conflicts. On the other hand, tenancy in common gives you more independence in managing your share.
• Tax implications –when it comes to estate taxes, capital gains, and property taxes, each type of ownership may generate different results. A tax professional may help you understand how each option applies to your situation.

What’s Next?

Dealing with property issues after a loss is never easy, especially when the property is owned as tenants in common. Speaking with an experienced probate attorney can provide clarity and peace of mind, help you understand your rights and responsibilities, and avoid delays and costly disputes.

If you are unsure how tenants in common affects your situation, contact our office at (770) 796-4582 to schedule a consultation to review your case and get guidance tailored to your family’s needs.