Tenants In Common Agreement
This Tenants in Common Agreement (the "Agreement") is entered into on [Effective Date](the "Effective Date") by and between
[Name], [Who Tenant1], registered at [Address], [City], [State] [ZIP Code] (the "Tenant 1"), and
[Name], [Who Tenant2], registered at [Address], [City], [State] [ZIP Code] (the "Tenant 2"), collectively referred to as the "Co-Tenants" or the "Parties" and each individually as the "Co-Tenant" or the "Party".
WHEREAS the Tenants wish to acquire an undivided interest in and to the real property located at [Name], [Who Tenant2], [Who Tenant1] ((the "Property"), a detailed description of which is reflected in Annex A attached hereto, and wish to enter into the Tenants in Common Agreement to provide adequate and orderly management and operation of the Property during the period of joint ownership of the Property by the Co-Tenants;
WHEREAS each Co-Tenant desires to hold a specific percentage or fraction of the undivided interest in the Property, as more particularly described in Annex B attached hereto;
WHEREAS the Co-Tenants acknowledge that this Agreement governs their respective rights and obligations with respect to the ownership, use, and potential transfer of their interests in the Property;
WHEREAS the Co-Tenants acknowledge that there is no right of survivorship, understanding that in the event of the alienation of any Co-Tenant's interest, it shall be transferred at the discretion of the relevant Co-Tenant or in accordance with applicable law;
NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein, and upon other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties have agreed as follows:
INDIVIDUAL SHARES OF OWNERSHIP. The Co-Tenants agree that their undivided interests in the Property shall be allocated as follows:
The Tenant 1: [Address]%.
The Tenant 2: [City]%.
Total ownership of the Property by the Co-Tenants is equal to 100%.
In case of any changes in the ownership structure, including but not limited to the addition or deletion of the Co-Tenants, the Co-Tenants agree to immediately adjust the percentage ownership interests accordingly. Any changes in ownership percentages must be documented in writing and acknowledged by all Co-Tenants, and applicable changes should be reflected in Annex B.
NATURE OF THE RELATIONSHIP BETWEEN THE CO-TENANTS
- Tenants relationship or no partnership. The Co-Tenants shall hold their respective undivided tenancy in common interests in the Property (the "Interests") as tenants-in-common. The Co-Tenants do not intend by this Agreement to create a partnership or joint venture among themselves but merely to set forth the terms and conditions upon which each Co-Tenant shall hold their respective Interests. In addition, the Co-Tenants do not intend to create a partnership or joint venture with the manager as defined below. Therefore, each Party hereby elects to be excluded from the provisions of Subchapter K of Chapter 1 of the Internal Revenue Code of 1986, as amended (also referred to as the "Code"), with respect to the tenancy in common ownership of the Property. The exclusion elected by the Co-Tenants hereunder shall commence with the execution of this Agreement.
- Reporting as direct owners and not a partnership. Each Co-Tenant covenants and agrees to report on their respective federal and state income tax returns all items of income, deductions, and credits resulting from their Interests. Such reporting shall be consistent with the exclusion of the Co-Tenants from Subchapter K of Chapter 1 of the Code, commencing with the first taxable year following the execution of this Agreement. Furthermore, each Co-Tenant commits not to notify the commissioner of internal revenue (also referred to as the "Commissioner") of the desire that Subchapter K of Chapter 1 of the Code apply to the Co-Tenants.
Indemnity. Each Party agrees to indemnify, protect, and hold the other Party free and harmless from all costs, liabilities, tax consequences, and expenses, such as taxes, interest, and any penalties, including but not limited to attorneys’ fees and costs, resulting from any Co-Tenant notifying the Commissioner about the violation of this Agreement or taking a contrary position on any tax return, report, or other documents.
- No agency. No Co-Tenant is authorized to act as agent for, to act on behalf of, or to do any act that will bind any other tenant or incur any obligations with respect to the Property.
INCOME AND LIABILITIES. Except as otherwise provided herein and in the Management Agreement, each Party shall be entitled to all benefits and obligations of ownership of the Property. Accordingly, the Co-Tenants shall receive all ownership benefits of the Property, on a gross basis, including income, revenue, and proceeds from the sale, refinance, or condemnation of the Property, in proportion to their respective Interests. The Co-Tenant shall bear and shall be liable for all ownership expenses of the Property on a gross basis, including all operating costs and expenses of sale, refinancing, or condemnation proportionate to their Interests. Exceptions are amounts as may be reasonably determined by the Co-Tenants or by the manager, to the extent that the manager has the authority to make such a determination under the Management Agreement, to be retained for reserves or improvements following the Management Agreement or the applicable budget for the Property.
Co-Tenants' obligations. The Co-Tenants agree to perform such acts as may be reasonably necessary to carry out the terms and conditions of this Agreement, including, without limitation:
- Documents. Executing documents related to the acquisition, financing, sale, or refinancing of the Property approved by the Co-Tenants in accordance with this Agreement and signing additional documents as may be required under this Agreement or may be reasonably necessary to implement the Co-tenant's intention concerning the Property, the Management Agreement or any loans encumbering the Property.
- Additional funds. Each Co-Tenant will be responsible for a pro rata share based on the respective Interests of future cash needed for any purpose related to the ownership, operation, and maintenance of the Property as determined by the Co-Tenants, including under any budget applicable to the Co-Tenants, or by the manager (and approved by the Co-Tenants) according to the Management Agreement or as required by any loan secured by the Property.
MANAGEMENT. The Co-Tenants may, by mutual agreement, appoint a professional manager (the "Manager") to supervise and manage the day-to-day operation and maintenance of the Property. The terms and conditions of the Manager's appointment shall be outlined in detail in a separate Management Agreement attached hereto as Annex C. The appointed Manager shall have the right to make day-to-day decisions regarding the Property following the terms of the Management Agreement. The Co-Tenants retain the right to supervise and control the Manager's activities to ensure compliance with the Management Agreement and the terms of this Agreement. The Co-Tenants may request regular reports from the Manager detailing the activities carried out on behalf of the Co-Tenants. The Co-Tenants shall distribute the costs of the Manager's services, specified in the Management Agreement, in proportion to their ownership Interests unless otherwise provided for in the Management Agreement.
PARTITION OF THE PROPERTY. If any Co-Tenant wishes to terminate the ownership interest or pursue the partition of the Property, the Co-Tenant may apply to the legal partition. The Co-Tenant initiating the partition (the "Applicant") must provide written notice to the other Co-Tenant outlining the intent to pursue partition and providing reasons for such action. Upon receiving the notice, all Co-Tenants shall engage in a negotiation period of days to discuss and attempt to reach an amicable solution to the potential partition. Within this period, the Co-Tenants may consider a buyout of the Applicant's interest or other mutually acceptable solutions. If an agreement is not reached during the negotiation period, the Co-Tenants agree to seek resolution through a mediator or arbitrator. Otherwise, the Applicant may initiate legal proceedings as set forth in this Agreement. The costs associated with any partitioning action, including legal fees, mediation fees, and court costs, shall be borne by the Applicant unless otherwise ordered by the court.
TRANSFER OF INTEREST. Each Co-Tenant acknowledges the transferability of their ownership interest in the Property as outlined in this section. The Co-Tenant may transfer, sell, or assign the Co-Tenant's interest, in whole or in part, to a third party (the "Transferee"), subject to the terms and conditions of this Agreement.
Before making any transfer of ownership Interest, the transferring Co-Tenant shall notify the other Co-Tenant in writing of the details of the intended transfer, including the identity of the Transferee and the percentage or fraction of the ownership interest to be transferred. Unless the other Co-Tenant exercises a right of first refusal to acquire the transferor's interest on the same terms and conditions as those proposed by the Transferee, the transfer shall be subject to the unanimous consent of all other Co-Tenant.
Upon the Effective Date of the transfer, the Transferee shall become the Co-Tenant and shall be bound by all the terms and conditions of this Agreement.
TERM AND TERMINATION OF THE AGREEMENT. The Agreement shall be effective as of the Effective Date and shall remain valid until terminated under the provisions outlined below or by mutual written agreement of the Parties.
Either Party may terminate this Agreement without cause upon providing [Name] days prior written notice. This Agreement may be terminated immediately for cause if either Party fails to perform under the terms of this Agreement. In addition, either Party may terminate this Agreement immediately upon written notice to the other Party if the other Party becomes insolvent or files for bankruptcy.
.
The Agreement may be terminated by operation of law, court order, or other circumstances recognized by applicable legal provisions.
NOTICE. Any notice, request, demand, or other communication required under this Agreement shall be sufficiently given if delivered personally or by certified mail, return receipt requested, to the address set forth in the opening paragraph or to such other address as one Party may have furnished to the other Party in writing, or to emails set forth below:
If to the Tenant 1: [City].
If to the Tenant 2: [State].
GOVERNING LAW AND DISPUTE RESOLUTION. This Agreement shall be governed by and interpreted in accordance with the laws of the State of [ZIP Code] ([Governing law]).
In case of any dispute, controversy, or claim resulting from or related to this Agreement, including its interpretation, performance, breach, termination, or validity, the Parties agree to initially seek amicable resolution through negotiations and mediation. If negotiations and mediation fail to result in a settlement, any outstanding dispute shall be finally resolved by arbitration following the legislation provisions. The arbitrator's decision shall be binding and enforceable in a court of competent jurisdiction. The Parties acknowledge their understanding of this section and agree to abide by its terms.
SEVERABILITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
ASSIGNMENT. Neither Party may assign or transfer this Agreement without obtaining prior written consent of the non-assigning Party, which approval shall not be unreasonably withheld.
ENTIRE AGREEMENT. This Agreement constitutes the entire understanding between the Parties and supersedes any prior oral or written agreements.
WAIVER. The failure of any Party to enforce a particular provision of this Agreement shall not constitute a waiver of their right to enforce that provision in the future.
ANNEXES. Any annexes, appendices, schedules, and exhibits to this Agreement are considered its integral parts. In case of any inconsistencies between the provisions of the main body of this Agreement and its Annexes, the provisions of the main body of this Agreement shall prevail.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
THE TENANT 1 THE TENANT 2 [Address], [City], [State]_________________________ (Place for a signature) [ZIP Code], [Property description], [Interest division]_________________________ (Place for a signature) Tenant 1 bank: [Bank name], account: [Account number]. Details: [Tenant 1 details]. Tenant 2 bank: [Bank name], account: [Account number]. Details: [Tenant 2 details].
ANNEX A
to the Tenants in Common Agreement dated
Description of the Property
.
THE TENANT 1 THE TENANT 2 [Ownership percentage]_________________________ (Place for a signature) [Ownership percentage]_________________________ (Place for a signature)
ANNEX B
to the Tenants in Common Agreement dated
Interest division
.
THE TENANT 1 THE TENANT 2 [Should Property Be Managed]_________________________ (Place for a signature) [Number of days]_________________________ (Place for a signature)
Annex C to the Tenants in Common Agreement dated [Termination notice in days] Management Agreement [Extra conditions] THE TENANT 1 THE TENANT 2 [Email]_________________________ (Place for a signature) [Email]_________________________ (Place for a signature)
Party 1
________________
Signature
Date: ________________
Party 2
________________
Signature
Date: ________________
What Is a Tenants In Common Agreement?
A Tenants In Common Agreement in the United States sets out the rights, duties and consideration binding the parties to it.
The legal distinction between tenancy in common and joint tenancy is critical. Under joint tenancy, the right of survivorship automatically transfers a deceased owner's interest to the surviving joint tenants, bypassing probate. Tenancy in common has no right of survivorship, meaning each co-tenant's interest passes according to their will or state intestacy laws. This distinction has significant implications for estate planning, creditor claims, and tax treatment. Under IRC Section 1031, tenants in common interests in investment property may qualify for like-kind exchange treatment, and Revenue Procedure 2002-22 provides guidelines for structuring TIC arrangements that qualify for Section 1031 exchanges without being recharacterized as partnership interests.
Without a written TIC agreement, co-tenants are governed only by state common law and statutory rules, which provide minimal guidance on day-to-day property management. Under the common law right of partition, any co-tenant can force a sale of the entire property through a partition action, regardless of the other owners' wishes. A well-drafted TIC agreement modifies these default rules by establishing management procedures, financial obligations, and buyout mechanisms that protect all co-owners' interests.
When Do You Need a Tenants In Common Agreement?
A tenants in common agreement is essential whenever two or more individuals or entities purchase property together without forming a partnership, LLC, or other business entity. Unmarried couples purchasing a home together should use a TIC agreement to define each partner's ownership percentage (which may be unequal based on contribution amounts), financial responsibilities for mortgage payments, taxes, insurance, and maintenance, and what happens if the relationship ends. Unlike married couples who have divorce proceedings to divide property, unmarried co-owners have no automatic legal framework for property division without a written agreement.
Real estate investors pooling capital to purchase income-producing property such as apartment buildings, commercial spaces, or vacation rentals need TIC agreements that address income distribution, expense allocation, property management responsibilities, and capital call procedures for major repairs or improvements. Families purchasing vacation homes together need agreements addressing scheduling systems for personal use, restrictions on rental activity, maintenance responsibility rotations, and the process for one family member to sell their interest.
Business associates acquiring office or industrial space as co-tenants rather than through a business entity need agreements addressing each party's space allocation, shared expense formulas based on square footage or usage, and restrictions on subleasing. Heirs who inherit property together through estate distribution need TIC agreements to manage the property going forward, as inherited properties are one of the most common sources of family disputes when co-ownership terms are not documented.
What to Include in Your Tenants In Common Agreement
The ownership interest section must precisely define each co-tenant's percentage interest in the property, which determines their share of income, expenses, and sale proceeds. Ownership percentages may reflect unequal capital contributions, with provisions specifying how future capital contributions for improvements or repairs adjust ownership percentages or create reimbursement obligations. Include the legal description of the property, a reference to the recorded deed, and a statement confirming that each co-tenant's interest is held as tenants in common and not as joint tenants.
Financial obligations must be clearly allocated, including each co-tenant's share of mortgage payments, property taxes, insurance premiums, HOA fees, utilities, and routine maintenance costs. Define the process for funding major capital expenditures such as roof replacement, HVAC systems, or structural repairs, including majority vote requirements for approving expenditures above a specified threshold and the consequences of a co-tenant's failure to contribute their share (which may include a lien on their interest, interest charges, or forced buyout provisions). For income-producing properties, specify how rental income is distributed, who manages tenant relationships, and whether management fees are paid to the managing co-tenant.
Transfer restrictions are essential to prevent unwanted new co-tenants. Include a right of first refusal (ROFR) requiring any selling co-tenant to offer their interest to existing co-tenants before selling to outside parties, with a specified response period and matching rights. Define the valuation methodology for buyout situations, whether fair market value determined by independent appraisal, formula-based pricing, or mediated negotiation. Address partition restrictions, ideally including a waiver of the right to seek judicial partition for a defined period, with buyout mechanisms as an alternative to forced sale. Include provisions for co-tenant death (addressing whether surviving co-tenants have a purchase option on the deceased's interest), co-tenant bankruptcy, and default remedies. Dispute resolution should designate mediation followed by binding arbitration to avoid the cost and uncertainty of partition litigation.
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Forms Legal. (2026). Tenants In Common Agreement (United States) [Legal document template]. Forms Legal. https://forms-legal.com/usa/real-estate/property/tenants-in-common-agreement
"Tenants In Common Agreement (United States)." Forms Legal, 2026, https://forms-legal.com/usa/real-estate/property/tenants-in-common-agreement.
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note = {Free legal document template. Based on Restatement (First) of Property}
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Frequently Asked Questions
A Tenants In Common Agreement should be recorded with the county recorder or land records office where the property sits, even though recording is not always required to transfer title between the parties. Under each state's recording statutes, recording a Tenants In Common Agreement gives public notice of the transfer and protects the new owner against later claims, liens, or competing buyers who lack notice. An unrecorded deed can still pass title between grantor and grantee, but it leaves the new owner exposed if the grantor conveys the same property again or a creditor records a lien first. To be accepted for recording, a Tenants In Common Agreement typically must be signed by the grantor, acknowledged before a notary, contain a legal description of the property, and meet the county's formatting and fee requirements. The Statute of Frauds requires conveyances of real property to be in writing, so a Tenants In Common Agreement that is properly drafted, notarized, and recorded gives the strongest protection of ownership.
A Tenants In Common Agreement must be signed by the grantor and acknowledged before a notary public in essentially every state, because county recorders will not accept a deed for recording without notarization. The notary's acknowledgment confirms the grantor's identity and that the signature was given voluntarily, which supports the integrity of the public land records. Some states also require one or two witnesses in addition to notarization for a Tenants In Common Agreement to be recordable, so the parties should confirm local rules before signing. The document must include an accurate legal description of the property — not just a street address — along with the names of the grantor and grantee and words of conveyance. A Tenants In Common Agreement that lacks proper notarization or a valid legal description may be rejected by the recorder or create gaps in the chain of title that complicate any future sale or refinance of the property.
A Tenants In Common Agreement transfers whatever interest the grantor holds, and the level of protection depends on the type of deed used. A quitclaim deed conveys only the grantor's existing interest with no promise that the title is clear, so the grantee takes the risk of any undisclosed liens or defects, which is why quitclaims are common between family members or to clear clouds on title. A general warranty deed, by contrast, includes covenants in which the grantor guarantees clear title against all claims, and a special warranty deed limits that guarantee to the grantor's own period of ownership. Before relying on a Tenants In Common Agreement, a buyer in an arm's-length purchase should obtain a title search and title insurance, because a deed alone does not reveal recorded liens or competing claims. Matching the deed type to the transaction protects both parties and reduces the chance of a later title dispute.
A Tenants In Common Agreement is legally binding in the United States once the parties capable of contracting sign it with the intent to be bound under Restatement (First) of Property. American contract law, drawn from the Restatement (Second) of Contracts and each state's common law, recognizes a Tenants In Common Agreement as enforceable when it shows offer, acceptance, consideration, and reasonably definite terms. Courts in the state whose law governs the agreement will hold the parties to its written terms unless a party proves fraud, duress, mistake, unconscionability, or that the subject matter is illegal. A signed Tenants In Common Agreement carries more evidentiary weight than an oral understanding because the writing fixes what each party promised and reduces later disputes over who agreed to what. To strengthen enforceability, the parties should each keep an original signed copy, date their signatures, and complete every blank rather than leaving terms open to interpretation by a judge.
A Tenants In Common Agreement in the United States must satisfy the core elements of a valid contract: mutual assent shown by offer and acceptance, consideration exchanged between the parties, the legal capacity of each signer, and a lawful purpose. The relevant framework is Restatement (First) of Property governs how the document is interpreted and enforced. The writing should clearly identify each party by full legal name, describe the rights and obligations of each side, and state the effective date and any term or expiration. Where one party is a business entity, the person signing should hold authority to bind that entity, such as an officer, manager, or member. Specific states may add formalities for certain agreements, so the parties should confirm local rules before signing. A Tenants In Common Agreement that omits a material term, leaves the price or duration blank, or fails to identify the parties accurately risks being found too uncertain for a court to enforce.
A Tenants In Common Agreement does not require a lawyer in most routine situations, and many individuals and small businesses prepare one using a clear written template that covers the standard terms. American law does not condition the validity of a Tenants In Common Agreement on attorney involvement; what matters is that the parties understand the terms and sign voluntarily. Legal review becomes worthwhile when the amounts at stake are large, the relationship is complex, the parties are in different states, or the agreement involves unusual conditions, tax consequences, or rights that are difficult to reverse. An attorney can confirm the document complies with the governing state's law and tailor clauses such as indemnification, dispute resolution, and termination. For straightforward matters, a carefully completed Tenants In Common Agreement from forms-legal.com gives the parties a solid written record; consulting a licensed attorney remains the safer path whenever the consequences of a mistake would be costly or hard to undo.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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