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Tenants in Common (TIC) Agreement

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Tenants in Common (TIC) Agreement Powered By Docstoc
					This template provides instructions and information about a tenancy in common (“TIC”).
A sample TIC agreement is also included in this template. TICs are the most common
form of concurrent estates whereby two or more parties own property. As opposed to
joint tenancies, TIC’s do not have a right of survivorship and if a tenant dies, their
interest in the property will pass to their heirs. This template is useful for individuals or
entities that want to learn more about TICs.
Table of Contents



I. General Information .......................................................................... 3

II. Checklist ............................................................................................ 4

III.    Step-by-Step Instructions................................................................ 5

IV. TENANCY IN COMMON (TIC) AGREEMENT ..................................... 6




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I.       GENERAL INFORMATION



         People investing in property will be required to decide how to best take ownership
of their property. This form is for individuals who have opted to take ownership of
property as tenants in common.

         A Tenancy in Common Agreement (TIC) is used to establish ownership rights of
parties (unmarried) who own property together.                      Unmarried people who purchase
property together are considered tenants in common. This agreement serves to confirm
this type of ownership and define the rights of the parties. It is also particularly useful as
it will set forth the percentage of ownership that each party has.

                  In a tenancy in common, each person can own the property in unequal
shares, each has an undivided interest, and the right to leave their share of property to
someone else upon their death. This type of ownership can be distinguished from a joint
tenancy form of ownership. In joint tenancy, you and a co-owner together own the entire
property.

         In a joint tenancy if one of the owners dies, the ownership passes to the other joint
tenancy. In a tenancy in common, the share of the deceased owner can be passed, or left
to someone else via a will or trust.

Advantages of Tenancy in Common Ownership

        A tenancy in common ownership can allow people to own a fractional interest in a
         property that they could not afford otherwise. It is often used for investment
         properties.
        This type of ownership allows for the potential of a tax free exchange transaction.
        You can re-sell your interest.




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II.       CHECKLIST



         Tenants in common ownership allows parties to own the property in unequal
          shares;
         Consideration is required for this transaction to be valid. Consideration is the
          exchange of something of value between the parties.
         An Exhibit A must be attached to this agreement describing the property.
         All parties must sign the document and should retain a copy for their files.
         Should the parties have any questions or concerns, they should consult with a
          lawyer.




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III.     STEP-BY-STEP INSTRUCTIONS



These instructions highlight where the user needs to fill in information, as well as point
out any areas that should be paid close attention to. If the parties have any questions or
concerns they should contact their lawyer.

Introduction. Fill in the date, and the name of each party.

Preamble. Fill in the address of the property. The parties will need to attach Exhibit A,
which will contain a detailed description of the property. This provision also states that
the parties currently hold the property as joint tenants, and will convert ownership to
tenants in common.

Ownership Rights. Fill in the percentage of ownership that each party owns, fill in the
name(s) of the first party. Fill in the same information for the second party.

Governing Law: Fill in the state where the property is.

Signature Block: Fill in the date of execution, and each party sign the document. Each
party should retain a copy of the documents for their files.




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IV.      TENANCY IN COMMON (TIC) AGREEMENT




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            TENANCY IN COMMON (TIC) AGREEMENT


This Tenancy in Common Agreement (“Agreement”) made, effective __________,
between ____________________(“First Party”), of ___________________, and
__________________________________(“Second           Party”),           of
_______________________.

PREAMBLE

The parties to this Agreement desire that the property situated at
____________________________________, more particularly described in Exhibit A
(“Property”), both real and personal, now owned by them in joint tenancy and not as
tenants in common be converted and held by them as tenants in common, and not as joint
tenants with right of survivorship.

In consideration of the matters described above, and of the mutual benefits and
obligations set forth in this agreement, the parties agree as follows:

1.       OWNERSHIP RIGHTS

Both parties hereby agree that upon execution of this Agreement, from the effective date,
all the real and personal property owned by the parties to this Agreement, whether
presently held in joint tenancy by the parties, or presently owned by either of the parties
in their respective names, shall be owned by each of the parties as follows:

An undivided ___% interest shall be the separate property of [name of first party], and
[name of second party] assigns and transfers to [name of first party] all of such
transferor's right, title, and interest in and to such undivided ___% interest in the same.

An undivided ___% interest shall be the separate property of [name of second party], and
[name of first party] assigns and transfers to [name of second party] all of such
transferor's right, title, and interest in and to such undivided ___% interest in the same.

2. USE OF PREMISES

Tenants shall use the property as agreed between the parties. The parties intend to use the
property for ______________________. If one party decides to use the property
differently from what was originally intended, the party must obtain written consent from
the other party. Parties shall comply with all laws, rules, ordinances, statutes and orders
regarding the use of the premises.

3. EXPENSES


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Each party shall be responsible for one half of any and all monthly payments due with
regard to this property. _________________ (enter both Parties, or name which party
applies), shall be responsible for all ordinary expenses required for operation and
maintenance of the Property (Operating Expenses), including taxes, governmental
assessments, insurance premiums (as to which both tenants must be named as insureds),
fuel and other utility charges, and costs of ordinary repairs.

4. CONVEYANCES

The parties further agree to execute and deliver any deed of conveyance or other
instrument, and to do any act, necessary to effectuate this agreement.

5. GOVERNING LAW

This agreement shall be governed by, construed, and enforced in accordance with the
laws of ____________[state].

6. ASSIGNMENT OF RIGHTS

Neither party shall assign or transfer its rights and obligations pursuant to this Agreement
to any other person, firm, corporation, or other entity without the prior, express, and
written consent of the other party.

7. MAINTENANCE OF PROPERTY _____________________as co-owner(s) of the
property, shall maintain the Property with reasonable care and diligence and shall not
permit waste on the Property, nor allow anyone claiming under them to do so.

8. MEDIATION AND ARBITRATION Any unresolved dispute relating to this
Agreement or relating to the ownership, management or control of the Property shall be
submitted to mediation. The owners shall share equally in the costs of mediation. If
mediation is not successful the owners shall submit the matter to arbitration in
accordance with the rules of the American Arbitration Association, and any award shall
be binding. The non-prevailing party will be responsible for all costs and fees.

9. TERMINATION. The obligations or each tenant under this Agreement shall
terminate with the sale of the party’s interest in the Property, and the party shall be
relieved of all obligations accruing after the sale. This Agreement shall terminate upon
the sale of the entire Property and the distribution of the net proceeds of the sale to the
tenants in common, or at such other time as may be agreed upon, in writing, by both
tenants.

10. GENERAL PROVISIONS

        10.1 Each owner shall indemnify and hold harmless the other owner from any and
all expense and liability resulting from or arising out of any negligence or misconduct on
his or her part or on the part of his or her agent, representative or tenant to the extent that


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such expense and costs of liability exceed the applicable insurance carried on the
property.

      10.2 Each owner shall perform any acts or execute and deliver any documents that
may be reasonably necessary to carry out the provisions of this Agreement.

        10.3 All notices and communications related to the this Agreement shall be in
writing and shall be deemed to have been duly given on the state of service if served
personally on the owner to who notice is given or within 72 hours after mailing if mailed
to the addresses set forth on the signature page of this Agreement.

       10.4 This Agreement contains the entire understanding of the parties. Any
correspondence, memoranda or agreement whether written or oral entered into prior to
this Agreement are replaced in total by this Agreement.

      10.5 This Agreement shall be binding and inure to the benefit of the of the
owner’s heirs, representatives, successors or assigns.

11. NOTICE. Whenever it is required that notice must be given or served on the other
party, such notice will be deemed given or served when written and hand delivered, or
deposited in the United States Mail, certified return receipt requested, postage prepaid,
addressed as follows:

First Party:      _________________________

                  _________________________

                  _________________________



Second Party: _________________________

                  _________________________

                  _________________________



        Each party to this agreement has caused it to be executed at ______________ on
the date indicated below.


______________________________ [Signature(s) and date(s) of signing]

______________________________                      [Signature(s)         and   date(s)   of   signing]


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DOCUMENT INFO
Description: This template provides instructions and information about a tenancy in common (“TIC”). A sample TIC agreement is also included in this template. TICs are the most common form of concurrent estates whereby two or more parties own property. As opposed to joint tenancies, TIC’s do not have a right of survivorship and if a tenant dies, their interest in the property will pass to their heirs. This template is useful for individuals or entities that want to learn more about TICs.
This document is also part of a package Home and Apartment Owners Bundle 13 Documents Included