In California’s expensive and competitive real estate market, buyers are increasingly turning to creative ways to share ownership of property. One of the most common legal structures for this type of co-ownership is a tenancy in common, also known as a TIC. Whether you’re an investor pooling resources with partners, an unmarried couple purchasing a home together, or a group of siblings inheriting property, TIC arrangements allow multiple individuals to jointly own real estate without needing to hold equal shares or live together.
But while TICs offer flexibility, they also carry significant legal risks. When ownership isn’t carefully structured, even minor disagreements can escalate into costly litigation or force the sale of a property against the wishes of other owners. Below, we discuss the rights and obligations of tenants in common, the disputes that commonly arise, and how property owners in California can protect themselves from the hidden pitfalls of this form of ownership.
What Is a Tenancy in Common?
A tenancy in common is a legal form of co-ownership in which two or more individuals hold an undivided interest in the same property. Each owner—called a “tenant in common”—has the right to use and possess the entire property, regardless of their individual ownership percentage. Unlike other forms of co-ownership, such as joint tenancy, a TIC does not require equal ownership shares among its members. It does not include a right of survivorship.
For example, three friends could purchase a home as tenants in common, with one owning 50 percent, another 30 percent, and the third 20 percent. All three would have equal rights to occupy and use the property, and each could sell or will their share independently of the others.
This structure is common in real estate investments, inherited properties, and purchases by non-married partners. But its informality can also lead to legal complications, particularly when ownership expectations are not clearly documented.
Common Scenarios Where TIC Ownership Arises
TIC ownership often arises in three main contexts: inheritance, informal purchases, and group investment.
Inherited Property Among Siblings or Heirs
When a parent dies without a trust or clear instructions in their will, their children may inherit the family home as tenants in common. Each child receives a fractional share, but disagreements often arise over whether to keep, rent, or sell the property—especially if one sibling still lives there or has invested in upkeep.
Friends or Unmarried Couples Purchasing Property Together
With housing prices in California among the highest in the nation, many individuals team up with friends or partners to buy property. While this can make ownership more accessible, it also exposes the parties to disputes over responsibility for mortgage payments, renovations, and what happens if one party wants out.
Real Estate Investment Partnerships
Investors may use a TIC to purchase and hold income-producing property. Without a formal agreement outlining profit distribution, management responsibilities, and exit strategies, these arrangements can quickly fall apart if one investor wants to cash out or disagrees with business decisions.
The Legal Risks of TIC Ownership in California
Despite its flexibility, tenants in common ownership comes with substantial legal risks—especially in the absence of a written agreement.
- No Automatic Rights of Survivorship: If a TIC owner dies, their interest passes to their heirs or beneficiaries—not the other co-owners. This can introduce unwanted parties into the ownership structure, such as an ex-spouse or adult children with different goals for the property.
- Disputes Over Use, Repairs, and Expenses: Co-owners are typically expected to share in the costs of taxes, insurance, and repairs—but disagreements often arise. One owner may want to renovate, while another prefers to sell. If one party contributes more financially, they may expect reimbursement or compensation, which can become a point of contention in litigation.
- Risk of Unilateral Sale or Encumbrance: Unlike joint tenancy, TIC owners can sell or transfer their individual interest without the consent of the others. A co-owner could sell their share to a third party, including a stranger or investor, thereby disrupting the original ownership dynamic.
- Partition Actions and Forced Sales: California’s Partition of Real Property Act, effective January 1, 2023, allows co-owners of property held in tenancy in common to force a sale or buy out of other co-owners’ interests. In other words, any tenant in common has the right to file a partition action, a lawsuit that seeks to divide or sell the property. Even if other owners oppose the sale, the court will usually order a partition by sale unless the property can be physically divided. These proceedings are expensive, time-consuming, and emotionally taxing.
- Difficulty Removing a Co-Owner: If a co-owner refuses to contribute financially, misuses the property, or otherwise acts against the group’s interests, removing them from the title can be difficult. Without a written agreement granting a buyout option or outlining grounds for expulsion, court intervention is often the only path forward—and even then, success isn’t guaranteed.
How a Co-Ownership Agreement Can Help
Many of the risks inherent in TIC arrangements can be mitigated with a carefully drafted co-ownership agreement. This contract establishes clear expectations and outlines remedies in advance to address potential issues.
- Defining Each Party’s Rights and Responsibilities: A written agreement can clarify how much each owner contributes, who will occupy the property, how profits or expenses are shared, and who makes decisions about maintenance and repairs.
- Restrictions on Transfer or Sale: TIC agreements can include right of first refusal clauses, which require a co-owner to offer their interest to the others before selling to a third party. They can also limit transfers to outside buyers or require majority consent.
- Dispute Resolution Mechanisms: Including provisions for mediation or arbitration can help avoid the courtroom. Some agreements establish buyout procedures if an owner wants to exit or fails to uphold their obligations.
- Estate Planning Provisions: By coordinating a TIC agreement with estate planning tools such as trusts or wills, co-owners can ensure their interests pass smoothly and don’t disrupt the ownership structure.
When Co-Ownership Goes Wrong: Legal Remedies and Litigation
When disagreements between co-owners escalate, legal action may become necessary to resolve disputes and protect each party’s interest. Tenancy in common arrangements, in particular, often lead to court involvement when informal agreements or shared expectations break down. Several legal remedies are available under California law—but each comes with its own procedures, limitations, and risks.
Filing a Partition Action in California
Partition actions are the most common legal remedy for disputes between tenants in common. Under California Code of Civil Procedure §872.210, any co-owner has the absolute right to file a partition lawsuit to divide or sell jointly owned property. The court does not require proof of conflict or wrongdoing—mere disagreement or the desire to end co-ownership is sufficient.
There are two primary types of partition: partition in kind and partition by sale. A partition in kind physically divides the property between co-owners, which is only feasible in rare cases—such as rural land or multi-unit properties with separate entrances. For most residential or urban real estate, courts will order a partition by sale. The property is typically sold through a court-supervised process, and the proceeds are divided among the owners according to their ownership percentages, subject to any offsets for expenditures or reimbursements.
The partition process begins with a court filing, followed by notification to all co-owners. A referee may be appointed to handle the sale and distribute the proceeds. The timeline can vary but often ranges from several months to over a year. Legal fees, referee costs, and court expenses can quickly add up, making partition an expensive remedy, especially when it is challenged.
Seeking an Accounting of Expenses or Profits
Tenants in common often contribute unequally to property-related expenses such as mortgage payments, property taxes, repairs, and improvements. If one co-owner pays more than their share, they may file a claim for an accounting as part of a partition action or as a standalone lawsuit.
An accounting seeks to reconcile contributions and ensure fair reimbursement. Courts can award compensation for necessary expenses that enhanced the value or preserved the property, such as roof repairs or mortgage payments. However, reimbursement is not automatic—courts will scrutinize whether expenses were reasonable, necessary, and properly documented.
Co-owners may also be entitled to a share of profits, such as rental income collected by another owner. Suppose one party rents out the property without consent or refuses to share income. In that case, the others can seek repayment through an accounting or damages claim.
Removing a Co-Owner From Title: What’s Possible?
Tenancy in common ownership generally offers no simple mechanism for removing a co-owner from the title. Unlike corporate or partnership structures where a stakeholder can be forced out under certain conditions, co-owners of real property retain their rights unless they voluntarily sell or the court intervenes.
That said, removal is possible under limited circumstances—primarily when there is evidence of fraud, duress, undue influence, or breach of fiduciary duty. For example, suppose one co-owner forged a deed or misrepresented the terms of a transaction. In that case, a court may cancel the title and restore ownership to the rightful party.
In rare situations, a TIC agreement may include provisions that allow for the forced buyout or removal of a co-owner upon specific triggers, such as failure to pay expenses or abandonment. Even then, enforcement typically requires judicial oversight and clear contractual language.
Absent these circumstances, the only way to resolve irreconcilable co-ownership is usually through a partition action, which results in either the sale of the property or its division, effectively ending the co-ownership relationship rather than forcibly removing one party.
Litigation Risks and Emotional Tolls
Real estate litigation, especially among co-owners who are friends, family members, or longtime partners, can be emotionally draining and financially destructive. Partition lawsuits not only cost thousands in legal fees but also expose private disagreements to public record. The court may compel parties to sell a property they had hoped to keep, and the forced-sale process often yields lower returns than a private market sale.
Even successful outcomes can damage relationships beyond repair. Disputes over who contributed more, who gets to stay in the property, or how to value improvements often become deeply personal. In inheritance disputes, family rifts can harden into permanent estrangements. That’s why many attorneys recommend mediation or negotiated buyouts whenever possible before turning to the courts.
Alternatives to Tenancy in Common
Given the potential for conflict, some property owners consider alternative ownership structures.
- Limited Liability Companies (LLCs): Real estate investors can form an LLC to hold title to the property. This offers liability protection, centralized management, and clear exit procedures—making it easier to resolve disputes without invoking partition law.
- Revocable Living Trusts: For inherited property, placing the home in a trust can help manage it during the parent’s lifetime and avoid co-ownership confusion after death. A trustee can follow specific instructions, such as renting, selling, or distributing proceeds.
- Converting TIC to Joint Tenancy or Sole Ownership: If owners want to ensure survivorship rights or consolidate ownership, they may be able to retitle the property. However, this requires unanimous consent and should only be done with legal advice to avoid tax or estate complications.
How Peterson Law, LLP Can Help
Peterson Law, LLP offers strategic counsel to individuals and families navigating the complexities of co-ownership in California.
- Drafting or Reviewing Co-Ownership Agreements: We help clients prepare comprehensive TIC agreements that define responsibilities, protect against future conflict, and align with each owner’s financial and estate planning goals.
- Partition and Real Estate Litigation Experience: When disputes arise, our attorneys are equipped to pursue or defend against partition actions, accounting claims, or title litigation. We prioritize cost-effective strategies and always explore settlement before trial.
- Inherited Property Counseling: We advise siblings, cousins, and other heirs on managing inherited property to avoid family rifts. This includes preparing agreements, managing sales, and navigating probate or trust administration.
- Coordinated Estate and Property Planning: Our firm ensures that property ownership is consistent with broader estate planning objectives. Whether through trusts, LLCs, or titling changes, we help clients preserve wealth and avoid unnecessary litigation.
Co-Ownership Is Not One-Size-Fits-All
Tenants in common ownership offers flexibility—but that flexibility can quickly turn into a liability if the arrangement isn’t carefully managed. Without clear agreements and proactive legal planning, co-owners may find themselves entangled in disputes, partition lawsuits, or financial hardship.
Whether you’re considering entering a TIC, already co-own property, or are facing a dispute with another owner, Peterson Law, LLP is here to help you understand your rights, mitigate your risks, and protect your investment. Reach out today for guidance tailored to your specific situation.
