The Cebu real estate industry has recently become a fast-growing business. Because of this, a lot of people have jumped into the bandwagon and became tenants in common. But what is a tenant in common? This article will explain what it is and what it involves.
Tenants in common, also known as tenancy in common, is a way of sharing a property. The number of tenants owning a property may range from two to more than a hundred. They may also be related or not related. In addition to that, these tenants may also have equal or unequal shares of the property. For example, Smith owns 50% of the property, while Brown and Cook may own 30% and 20% respectively. Their shares are mostly dependent on the amount of money they invested to acquire the property.
Each tenant in common owns a specific portion in the property that has not yet been divided among co-tenants. Co-tenants are the heirs of the tenant in common who may or may not be a relative. So, the tenants in common may have different purposes for the property. The only reason which brings them together to ownership is that they share a single property. And while their tenancy in common continues, there is no distinction on who owns a specific part of the property.
Right of Survivorship
In tenants in common, there is no right of survivorship. Unlike in joint tenancy wherein when an owner of the property dies, his shares will go to the surviving tenant. But in tenants in common, his share will go to his estate. After which, his share of the property will be passed-on or inherited to whomever he wished according to his will. This usually happens in joint-venture businesses. Wherein when two persons own a business property and one of the co-owner dies, the beneficiaries of the deceased will inherit his shares and not the other tenant.
Ending Tenancy in Common
When one of the owners of the property in tenancy in common wishes to end his share or part, he may do so by obtaining a partition of property. This is done by dividing the property or lot into distinctly owned parts, or selling the entire property and then divide the proceeds. Either way depends on the zoning rules of the local land use of the area.
If any of the property owners cannot agree to the division of the property, they may pursue a court ruling to determine how it should be divided. The court will either order partition in kind wherein each owner will now have a specific part of the property. Or a partition by sale wherein the property will be sold and the proceeds are divided to each of the owners.
Each co-owner of the property has the right to a partition. Unless if the co-owners had an agreement with each other, the court may waive that right either permanently, for a specific time-period, or depending on the circumstances.
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