Tenancy In Common (TIC) is a way for two or more individuals to have an undivided fractional ownership interest in a single property. With a TIC, each owner has individual rights and obligations related to the property. These rights equal the proportionate share of the owner’s interest.
Having an ownership interest in a TIC gives an investor the right to his or her proportionate share of net income, tax benefits and appreciation. The TIC owner is treated similarly to a fee simple owner and receives an individual property deed and title insurance for his or her share of the property. A TIC owner may bequeath his or her interest to any beneficiary upon the owner’s death.
This direct interest in real estate TIC ownership also qualifies as “like-kind” real estate for 1031 exchanges, making TICs an important part of the 1031 exchange universe. To shield themselves from personal liability arising from holding direct title to property, most TIC investors set up Limited Liability Companies (LLCs) for the purpose of TIC ownership.