When exploring shared ownership options in real estate, many buyers come across the term “TIC” and wonder how it compares to a condominium. While both models involve multiple individuals living in the same building, the legal and financial arrangements are quite different.
Understanding the differences between a tenancy in common (TIC) and a condo is essential before making a purchase. These arrangements affect everything from how property is titled to how taxes and loans are handled.
What is a tenancy in common (TIC)?
A TIC is a form of property ownership where two or more people hold interest in the same property. Each owner has a share of the building and the right to occupy a specific unit, but they all share the title to the entire property. Unlike a condo, a TIC does not involve ownership of a separate legal unit.
One key feature of TIC ownership is that each person can own a different percentage of the property. That share can be sold, transferred or inherited according to the terms in a will or estate plan. However, TIC ownership does not include survivorship rights. If one owner passes away, their interest does not automatically transfer to the other owners.
How is a condo different?
In a condo, each owner holds title to an individual unit along with a proportional share of the common areas. Owners are solely responsible for their own unit’s mortgage and property taxes. If one condo owner defaults on a loan, it does not affect the others.
This separation of title is a major advantage for condo owners. Issues like liens or lawsuits are limited to individual units rather than impacting the entire building, as can happen with a TIC.
Because TICs involve shared title, it is important to have clear agreements and legal guidance. Working with professional legal guidance can help prevent disputes and protect each owner’s rights.