TIC: How is the Real Estate Community Involved?

by Kathryn Landry - Date: 2008-07-26 - Word Count: 453 Share This!

With the demand of prime properties worldwide, real estate communities are boasting of profits and capital gains when it comes to their acquired real estate. But despite the knowledge of these investors in the business, there is a way to consolidate as many properties as they can to maximize their profits.

Tenancy in Common or TIC allows the real estate community to share an ownership of a certain property with two or more people. The individuals share may depend on how much they invested on the property upon its acquisition, as stipulated in the deed, will or title for the joint venture.

Advantages of TIC for the Real Estate Community

Real estate community can highly profit from tenancy in common. By partly investing on one property with another investor, the person may allocate their money to other investments which allows them to double their total earnings, rather than sticking with one real estate alone.

Also, the law states that those who are into TIC should equally contribute to payments of expenses depending on the percentage of their shares. This includes expenses such as rent, services (lights, water and communication), and so on. Though repair and construction responsibilities are not shared, but depend on the co-owners who wish to have them done. This allows each individual in the real estate community to lessen their cost of expense which gives them more flexibility in managing their finances.

Real Estate Community Concerns

Though most big-time real estate community investors deal with property acquisition on their own, the main concern however is still on the profit to be had on the venture. Commercial investors on real estate will not dish out any money for the property if there is no profit or capital gains to be had the risk is just too much for one person to handle on their own.

Right of survivorship doesn't exist in a TIC agreement. In other words, the share of the property or estate will be passed on as inheritance to the heir as stated on the will or any legal documents pertaining to the joint venture. In this case, the risk of losing the share of the real estate acquired will be lessened, or face legal sanctions as dictated by the Court.

But with TIC, the risks are divided according to the number of individuals in the joint venture. If one of the party wishes to destroy the tenancy in common, they can do so in two ways: 1) the party can obtain a partition of the property which will divide the land into distinctively owned lots, if permitted by the State; and 2) the Court may decide to force a sale of the property and divide the proceeds according to the percentage of each individuals' investment.

Related Tags: real estate, 1031, 1031 exchange, tenants in common, tic

Kathryn R. Landry is a business writer for TIC Advisors, Inc. A company that can give you the most complete information on a 1031 exchange or TIC property ownership.

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