Tenant in Common: What Business Owners Need to Know About Property Ownership

As a business owner, it is important to understand the legal definition of a tenant in common. This term refers to an individual who owns an undivided interest in real or personal property with one or more people, with no right of survivorship.

To put it simply, if you own a property with someone else as tenants in common, you each own a portion of the property, but neither of you has the right to inherit the other’s share if one of you were to pass away. This is different from joint tenancy, where each owner has an equal share and the right of survivorship.

Let’s say you and a business partner decide to purchase a commercial property together as tenants in common. You each own a percentage of the property, but if one of you were to pass away, your share would not automatically transfer to the other person. Instead, it would be passed down to your heirs or beneficiaries according to your will or state law.

This type of ownership can be beneficial for business owners who want to invest in property with others but don’t want to be tied to them for life. It allows for flexibility and the ability to sell your share of the property without the other owner’s consent.

However, it’s important to note that being a tenant in common also comes with some risks. If one owner decides to sell their share, it could potentially lead to a forced sale of the entire property. Additionally, if one owner falls behind on their share of the property taxes or maintenance costs, it could affect the other owner’s investment.

Talk to a Fitter Law attorney: understanding the legal definition of a tenant in common is crucial for business owners who are considering investing in property with others. While it offers flexibility and the ability to sell your share, it also comes with some risks that should be carefully considered before entering into this type of ownership. As always, it’s best to consult with a legal professional before making any major decisions