Tenancy in Common
When property is co-owned by several people as tenants in common, each has a right to use the entire property regardless of her ownership share in the land. So if a tenant in common has a 5 percent ownership in the property, she still gets to use the whole property regardless. Each owner of the property has the rights to use the entirety of the shared property as well. As a result, sharing certain property may be problematic, as one co-owner’s use of the property may limit another co-owner’s ability to take advantage of his property rights.
Selling a Tenancy in Common
Each co-owner has an absolute right to sell his interest in a tenancy in common. When a co-owner conveys his property interest to a buyer, the new co-owner receives all of the privileges of co-ownership including using the entirety of the property. Selling an ownership interest in heir’s property can be especially burdensome given the probable relationship between the co-owners and the asset. Since the co-owners are originally all related to the original owner, the property probably has some emotional significance to the owners. By an owner selling to an outside party, the dynamic of ownership in the property can shift and strain the relationship between the co-owners.
Partitioning the Property
Any tenant in common may demand that the property be partitioned. This means that each owner receives a portion of the property’s value based on his ownership percentage in the original parcel for his exclusive use. Property may be portioned either by giving each owner a portion of the land or, if such a division is impractical, the property may be sold and each owner receive a portion of the profits. For the other owners who do not want a partition and want to keep the land intact for their use, the threat of partition can be highly disruptive.
If you receive heirs’ property as a co-owner, it is a good idea to arrive at a formal agreement regarding the property with the other owners as soon as possible. This agreement should address numerous contingencies such as if one person wants to sell her share or wants to partition the property. Possible solutions to these issues include a promise to buy out an exiting owner to ensure the property stays within the family, and a means to partition the property so that the rest of the property remains under the control of the original owners.