The acronym “TIC” stands for tenancy-in-common, along with the terms “cotenancy” and “fractional ownership”. This refers to arrangements under which two or more people co-own a parcel of real estate and each are on the deed as an owner. It is different than a partnership where the partnership as an entity owns the property.

This type of co-ownership allows each co-owner to choose who will inherit his/her ownership interest upon death and to sell their fractional ownership without everyone else having to sell.

The TIC has become a popular style of ownership in many different real estate contexts. For example, income property investors and real estate syndicators are increasingly using TICs as a vehicle to facilitate 1031 income tax-deferred exchanges because it allows investors to buy the percentage they need to match the relinquished property sold. It is a trend that has been propelled by recent IRS rulings (Rev Ruling 2002-22) recognizing certain tenancy in common structures as legitimate vehicles for these exchanges and the aging demographics of our population who want a more passive form of real estate investment.

At the same time, vacation home buyers and resort developers are increasingly using tenancy-in-common (often called “fractional ownership”) to share ownership and usage of vacation properties so that owners need not buy more than they can use and afford, but still get legal title to real estate (unlike in a traditional “time share” arrangement).