What is co-ownership of a property?

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Kayla Moses

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Co-ownership of property means more than one person has an ownership interest in a piece of property. There are different types of co-ownership, including tenancy in common and joint ownership.

Understanding co-ownership of property

Each type of co-ownership corresponds to a different set of rules and allowances. 

Tenancy in common

A tenancy in common (TIC) is for two or more people with an ownership interest. There’s no limit on the number of owners, and tenants may have unequal investment stakes. For example, one owner might have an 80% interest with two co-owners at 10% apiece. Often this corresponds to the financial investment contributed at the original purchase. Unless explicitly stated otherwise in the deed, TICs do not have rights of survivorship. If a tenant dies, property shares pass to an heir instead of the remaining tenants. Tenancy in common is available for all people, regardless of their marital status.

Joint ownership

Joint ownership, also known as beneficial joint tenancy, specifies that tenants hold equal ownership rights. This holds true even if only one person paid for the property — anyone listed on the deed has ownership of the complete property. All tenants are granted their deeds at the same time and, upon death, agree to pass the property on to their co-owners via rights of survivorship. Owners must demonstrate the “four unities” to qualify: 
  • Time — ownership interest must begin at the same time for all joint tenants.
  • Interest — all the tenants must have equal interest in the property.
  • Title — all the tenants must receive the same title in the deed.
  • Possession — access to the property and usage rights must be the same for all tenants.

Takeaways

Here’s what you should know about co-ownership:
  • Joint ownership and TIC are options for people who are not married to each other.
  • Owners have unique rights to the property depending on co-ownership type.
  • Survivorship rights are critical for property shares to remain with existing tenants.

In more detail:

How is co-ownership established?

Co-ownership is established in a property deed and title, and you can also find details in your mortgage paperwork. If nothing is specified and you’re not married to the other tenant, the state will list the property as a tenancy in common or joint tenancy by default.

What is probate, and why does it matter for co-ownership?

After someone dies, probate is the legal process where debts are paid and the assets of the estate are allocated. Co-owned property with survivorship rights bypasses probate because there’s nothing for the court to decide — the owners are listed on the deed, which superceded the will. 

How do you sell a shared ownership property? 

It depends on the kind of co-ownership. A tenancy by the entirety is only valid while the owners are married, so a divorce or death dissolve the co-ownership. For a tenancy in common, all owners have to agree to dispose of the property.In most cases of co-ownership, individual shareholders can independently sell their shares to exit the property.

What kind of co-ownership does Pacaso offer?

Pacaso offers fully managed limited company co-ownership. Designed as a straightforward approach to co-owning a second home, Pacaso’s model allows up to eight owners to each have a ⅛ ownership interest in the limited company, and the limited company is the entity that is named as the owner on the deed. You own 1/8 to 1/2 of your Pacaso, with maintenance, management and day-to-day updates handled by our Crew. View our residential listings and see the benefits of owning a second home with Pacaso.

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