How to Buy a Tenancy-in-Common

A tenancy-in-common is a form of ownership in which two or more individuals purchase property together. There are important issues to consider before you buy a tenancy-in-common, whether it's a house or a business. If you think this might be the right option for you, here's how to do it.

Instructions

Difficulty: Challenging

1. Determine the trustworthiness of each individual you are considering purchasing property with. This is vital in any business transaction involving property, but especially so in tenancy-in-common. Ensure each person involved has their financial ducks in a row. Find out about the person's character if you haven't known them very long and look at their past track record concerning business dealings.
2. Consult an attorney for legal advice. This cannot be stressed highly enough. Tenancy-in-common can get complicated, especially if you have more than two people purchasing the property together. If it is a business ownership, each individual holds a common interest in the property. An attorney can see if you're getting into something sketchy.
3. Make sure that each person involved in buying under a tenancy-in-common has a valid will in place. A will determines how your assets will be distributed to your heirs upon your death. Your share of a property bought under a tenancy-in-common goes to your heirs, not to your partners. If all details are not spelled out in your will, it can cause serious complications for your family and for your partners when you buy tenancy-in-common. If there is no will, property can be tied up indefinitely.
4. Plan carefully while buying a tenancy-in-common. Choice of beneficiary is especially important when buying a house under tenancy-in-common. Consider this scenario: If Joe and Mary buy a house using tenancy-in-common and Mary dies with a will that designates her daughter Sally as sole beneficiary, Sally now owns Mary's interest in the property and will become a tenant-in-common with Joe.
5. Find existing buildings or properties for commercial use that you can buy into. An already existing tenancy-in-common may have partners willing to let a new partner buy in.
6. Inspect the commercial property you find. Check the land for possible flooding issues. Go over the building or buildings carefully to make sure you won't have major repair or costly maintenance issues in the near future. Use the services of a qualified building inspector if you are uncertain about things like heating and air conditioning units, roof conditions or flooring conditions.
7. Consult with a commercial Realtor or broker who has experience dealing with how to buy tenancy-in-common. He can help you negotiate the best deal for whatever commercial use you may be considering. He can also provide knowledge and advice if you are considering buying into an already existing tenancy-in-common partnership.
8. Remember that you don't have to find an existing group of owners to buy tenancy-in-common. You can always start your own tenancy-in-common buy-in for commercial use. Decide what kind of business you want to operate, then choose your partners. If you make sure you choose partners with character and find a business that's a good fit, tenancy-in-common can be a great way to buy. You'll have partners to share the load of work and share the cost as well.

Tips & Warnings

• Remember when you are buying tenancy-in-common for commercial use, all partners involved will need to be able to qualify for a loan individually. Consult a reputable lender in your area to walk you through the process.