Tenants In Common Georgia: What Is Tenancy In Common?

Tenants In Common Georgia - Tenancy In Common Georgia - Joint Tenancy Georgia

What are tenants in common in Georgia? 

In this article, you’ll learn about:

  • what tenants in common is
  • the types of tenants in common (with examples)
  • your rights to the property
  • your responsibilities for the property
  • your right to use the property
  • how to set up a tenants in common agreement
  • things to look out for when setting up the agreement
  • how to sell or dissolve tenants in common ownership

Let’s dig in. 

Table of Contents

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Tenants In Common In Georgia

Let’s look at what tenancy in common is an an example of it. 

What Is Tenants In Common In Georgia?

Tenants in common in Georiga refers to a property ownership structure. 

In this structure, two or more people jointly own a property. 

Each person owns a distinct portion. 

Georgia Code Title 44, Section 6, governs this type of ownership.

With tenancy in common, all tenants have equal rights to use the property. 

These rights exist regardless of the size of their ownership share. 

Thus, every owner gets to use the entire property, not just the portion they own.

When a tenant in common dies, the situation differs from a joint tenancy. 

In a joint tenancy, the deceased’s share passes to the remaining owners. 

But with a tenancy in common, there’s no “right of survivorship.” 

The share of a deceased tenant doesn’t go to the other tenants. 

It goes to the deceased’s heirs or according to their will.

Tenants in common have the freedom to sell or mortgage their property share independently. 

If disagreements occur between tenants, they can seek a partition action. 

This partition action could either:

  • divide the property physically (i.e., land)
  • sell it (i.e., rentals or vacation homes)

The proceeds would then be shared among the co-tenants.

In a tennancy in common, all tenants equally share responsibilities like:

  • property taxes
  • insurance
  • maintenance costs

These costs usually align with their ownership shares. 

A well-written tenants in common agreement can outline these responsibilities. 

This helps prevent potential disputes.

Tenancy In Common Example

Let’s consider an example scenario to understand tenancy in common better.

Let’s assume there are three friends, Alice, Bob, and Charlie.

And they decide to invest in a piece of real estate together – a vacation house in Savannah, Georgia. 

They decide to own the property as tenants in common, agreeing to divide ownership equally. 

Each person owns a one-third interest in the property.

In their tenancy in common arrangement:

  • Alice, Bob, and Charlie each have the right to use the entire property, not just a specific third of it.
  • If Alice decides to sell her share, she can do so without needing approval from Bob and Charlie. She could sell her one-third interest to another party.
  • If Charlie passes away, his share doesn’t automatically go to Alice and Bob. Instead, it would be distributed according to Charlie’s will or to his heirs under state law.
  • All three friends share the costs related to the property, such as property taxes, insurance, and maintenance. The expenses are usually divided according to the proportion of ownership, so each would bear one-third of these costs.
  • If disagreements arise, say Bob wants to sell the property, but Alice and Charlie don’t, Bob could seek a partition action in court. The court could order the property to be divided or sold, and the proceeds distributed among the co-owners.

This example shows how tenancy in common operates in real life. 

Still, it’s wise to create a detailed tenants in common agreement

This tenants in common agreement should clarify each owner’s rights and duties. 

It should also help manage potential disagreements. 

Plus, it should provide clear directions for situations. 

These may include a tenant’s death or the sale of a property share.

Types Of Tenancy In Real Estate

Types of tenancy in real estate refers to various ownership arrangements, rather than specific categories. 

These can depend on the number of owners, their relationships, and ownership proportions.

  • Equal Ownership Tenants in Common is a common arrangement. In this setup, each tenant owns an equal property share. If two tenants share a property, they each own 50%. If four tenants share, each owns 25%.
  • Unequal Ownership Tenants in Common involves tenants owning different property proportions. The ownership proportions are spelled out in a deed or agreement. One tenant might own 60% of the property, while another owns 40%.
  • Multiple Tenants in Common describes a situation with more than two property co-owners. The property might be owned by three, four, or more people, each with their unique shares.
  • Tenants in Common with Family Members happens when co-owners are relatives, such as siblings or parent and child. This arrangement can complicate property management and succession planning.
  • Tenants in Common with Business Partners is often seen in commercial real estate. Business partners may jointly buy property as an investment strategy.
  • Inheritance as Tenants in Common occurs when a property is left to several beneficiaries in a will. The heirs then become tenants in common.

Regardless of the arrangement, all tenants in common share an undivided property interest. 

They each have the right to use and possess the entire property, not just their ownership share.

Tenants In Common With Right Of Survivorship

Joint tenancy often includes the right of survivorship, but typically, tenants in common does not.

The right of survivorship means when an owner dies, their property share transfers to the surviving owners. 

It doesn’t pass to the deceased owner’s heirs or according to their will.

In a tenants in common arrangement, each owner holds a distinct, undivided property interest. 

They may own varying proportions. 

If a tenants in common owner dies, their share doesn’t go to the surviving owners. 

Instead, it passes to their heirs or according to their will. 

This provides more estate planning flexibility. 

But it can complicate matters if the deceased owner’s heirs don’t wish to maintain the same arrangement with the surviving owners.

Joint Tenants Vs Tenants In Common

Joint tenancy and tenancy in common are two types of property ownership, each with distinct features.

Joint tenants both own the entire property

They have what’s known as a right of survivorship. 

This means if one joint tenant dies, their share automatically passes to the surviving tenant, regardless of any will or legal claim.

Tenants in common, on the other hand, each own a specific share of the property. 

This can be equal, but it doesn’t have to be. 

Unlike joint tenancy, there’s no right of survivorship

If a tenant in common dies, their share can be willed to someone else, not necessarily the other tenant.

In joint tenancy, everyone needs to agree if you want to sell the property. 

In tenancy in common, each tenant can sell their share independently.

So, if you want the property to automatically pass to the other owner upon death, joint tenancy might be for you. 

If you want more flexibility to will your share or sell it separately, consider tenancy in common.

Rights And Obligations Of Georgia Tenants In Common

Let’s look at your:

  • right to transfer property
  • what responsibilities each owner has
  • your rights to use the property

Right To Transfer Interest

In a tenants in common agreement agreement in Georgia, each tenant holds a distinct and transferable interest. 

They can sell, gift, or mortgage their share without needing consent from the other tenants.

If a tenant dies, their interest doesn’t automatically go to the surviving tenants, unlike in a joint tenancy. 

Instead, their share becomes part of their estate and passes on to their heirs or as directed by their will.

Read More: Transfer On Death Deed Georgia

Shared Responsibilities Of Tenants

Each tenant in a tenants in common agreement has financial responsibilities. 

These include:

  • property taxes
  • mortgage payments if applicable
  • costs for maintaining and repairing the property 

The share usually corresponds to the size of their ownership interest.

If a tenant fails to meet their financial obligations, it can result in serious consequences. 

For instance, unpaid property taxes may lead to a tax lien, putting the entire property at risk. 

In such cases, the other tenants may have to cover the cost to protect their investment.

Right To Use And Enjoy The Property

All tenants in a tenants in common have the right to use and enjoy the entire property.

Not just a specific section or part corresponding to their interest. 

Each tenant’s right to use the property is subject to the same rights of the other tenants.

Conflicts may arise over property use. 

For example, disputes could occur about:

  • who gets to occupy which part of the property 
  • how shared areas should be used

It’s important to address these issues:

  • in the tenants in common 
  • through open communication and negotiation among tenants

Legal action can be a last resort to resolve persistent conflicts.

The Process Of Becoming Tenants In Common

Let’s talk about:

  • creating a tenants in common agreement
  • what to include in it
  • how to buy a property with tenancy in common

The Tenants In Common Agreement

A tenants in common agreement defines the rights, responsibilities, and interests of each co-tenant. 

In Georgia, key elements of a tenants in common agreement typically include:

  • Identifying Parties: The agreement names all the tenants in common.
  • Ownership Shares: It clearly states the percentage of property each tenant owns.
  • Maintenance Costs And Tax Responsibilities: It assigns shared responsibilities like property taxes, insurance, and maintenance.
  • Sale Or Transfer Of Interest Rules: It outlines the process if a tenant wants to sell their stake.
  • Dispute Resolution Methods: It provides a framework for solving potential disagreements.

Forming A Tenants In Common

Forming a tenants in common in Georgia involves several steps:

  1. Property Selection: Identify the property you intend to own as tenants in common.
  2. Draft An Agreement: Prepare a tenants in common agreement with the help of a knowledgeable professional.
  3. Sign And Notarize The Agreement: All parties must sign the tenants in common agreement, typically in the presence of a notary.
  4. File The Deed: File a new deed at the local county Recorder’s office, which includes the names of all tenants and their ownership stakes.

Buying Property As Tenants In Common

When buying a property as tenants in common, it’s important to be aware of each step and potential issues:

  1. Arrange Financing: Each tenant can secure individual financing, or tenants may opt for a shared mortgage.
  2. Review The Title: Examine the property title to ensure there are no existing liens or disputes.
  3. Inspection: Conduct a property inspection to uncover any potential issues with the property.
  4. Close The Deal: Sign the necessary paperwork and make payments as agreed.

Pitfalls to avoid during this process include:

  • failing to inspect the property thoroughly
  • not understanding individual financial obligations
  • neglecting to set clear expectations in the tenants in common agreement

Dispute Resolution And Dissolution Of Tenants In Common

You’re likely to have disputes about property held as tenants in common. 

Let’s look at:

  • what to think about to resolve disputes in the future
  • how the courts could get involved
  • severing joint tenancy in Georgia

Resolving Tenant Disputes With Other Tenants

Co-tenants often face disputes about:

  • property use
  • expenses
  • changes to the property 

Good communication and a well-drafted tenants in common agreement can prevent many of these issues. 

The agreement should outline each tenant’s:

  • rights
  • responsibilities
  • decision-making power

If conflicts arise and can’t be resolved through dialogue, consider mediation. 

A neutral third party can help find a mutually acceptable solution. 

For ongoing issues, you may need to go to court. 

Georgia courts can issue rulings to settle disputes between co-tenants.

Partition Of Property Under Common Ownership

Sometimes, a co-tenant may want to dissolve the tenants in common relationship. 

This can be done through a process called partition. 

It involves dividing the property so that each tenant owns a distinct portion.

To start a partition action in Georgia, you file a petition with the court. 

You’ll need to show the court that you own part of the property. 

The court then decides how to divide the property.

There are two types of partition: 

  • partition in kind 
  • partition by sale

A partition in kind physically divides the property. 

A partition by sale sells the property and splits the proceeds.

Selling A Tenants In Common Property

Selling a tenants in common property can be complex. 

Each tenant can sell their share separately. 

However, the process is easier if all co-tenants agree to sell the entire property.

To sell, you’ll need to establish the price of the property or the individual shares. 

An appraiser can help with this. 

Next, list the property or shares for sale. 

When you find a buyer, you’ll sign a deed to transfer ownership. 

The proceeds are then divided according to each tenant’s ownership share.

A clear tenants in common agreement, open communication, and legal guidance can help navigate:

  • disputes
  • partition actions
  • the sale of tenants in common property in Georgia

Read More: Can Someone Sell A House If Your Name Is On The Deed?

Buying Out A Tenant In Common

When you want to buy out a tenant in common, you follow several steps.

  1. Start by engaging in open communication with the tenant you wish to buy out. Make sure you clearly state your intent and reasons.
  2. Decide on a fair price for their share. You may consider hiring an independent appraiser to determine the current market value of the property.
  3. Once you agree on a price, draft a written agreement. This document should outline the terms of the buyout, including payment details and timelines.
  4. With the agreement in place, you can transfer the title. In most cases, a quitclaim deed is used for this purpose. It effectively removes the other tenant’s name from the property title.
  5. After the transfer, record the new deed with the local county recorder’s office. This makes the change in ownership official.
  6. Finally, make the agreed-upon payment to the tenant you’re buying out. This could be a lump sum, or scheduled payments over time, depending on your agreement.

FAQs About Tenants In Common In Georgia

Here are other questions clients ask us about tenancy in common in Georgia. 

What Happens When One Of The Tenants In Common Dies?

When one of the tenants in common dies, their interest in the property does not automatically pass to the surviving tenants. 

Instead, their share in the property is part of their estate. 

This means it’s subject to the terms of their will.

Or, if there is no will, it will be distributed according Georiga’s laws on intestate succession.

Tenants in common each own a distinct share of the property that they can leave to anyone they choose. 

Therefore, the deceased tenant’s share may be inherited by a person or entity of their choosing.

This may or may not include the remaining tenants.

The new owner then becomes a tenant in common with the surviving original tenants.

And they assume the same rights and responsibilities as the deceased tenant.

This includes sharing costs and maintaining the property.

Let’s say the remaining tenants in common want to buy out the inherited share

They usually need to negotiate terms with the new owner. 

Alternatively, they can agree to sell the entire property and split the proceeds according to their respective shares.

Does Tenancy In Common Have Right Of Survivorship?

In a Tenancy in Common (TIC) agreement, there is no right of survivorship. 

This means that if one tenant passes away, their share of the property does not automatically go to the surviving tenants. 

Instead, their share is transferred to their heirs or as indicated in their will. 

It’s different from joint tenancy where the right of survivorship applies, and a deceased tenant’s share is divided among the surviving tenants.

Set Up A Tenants In Common In Georgia

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