What Co-Buyers Need to Know Before They Close
Tenancy in common is a form of property ownership where two or more people each hold a separate, transferable share of a property. Co-owners can hold different percentages, leave their share to heirs, and sell or transfer their interest without the other’s permission. It’s the most common title structure for co-buyers who aren’t married to each other.
When you buy a home with another person, one of the first legal decisions you make is how you’ll hold title. Most people don’t think about it. They sign what their escrow officer puts in front of them and move on.
That’s a mistake.
How you hold title determines what happens to your share if you die. What happens if one of you wants to sell. Whether you can leave your portion to whoever you choose. For co-buyers, this decision matters more than almost anything else in the transaction.
Tenancy in common is what most co-buyers use. Here’s what it actually means, how it differs from the alternative, and what you need to have in place before you close.
What Is Tenancy in Common?
Tenancy in common (TIC) is a form of co-ownership where two or more people each hold a distinct, individual share of a property. Those shares don’t have to be equal. One person can own 60% while the other owns 40%. Three people can split it however their deal dictates.
Each co-owner’s share is their own property. They can sell it, give it away, or leave it to their heirs without needing the other co-owner’s permission to transfer their interest. That flexibility is what makes TIC the default structure for co-buyers who aren’t married.
There’s no right of survivorship in a tenancy in common. That’s a key difference from joint tenancy. If one co-owner dies, their share doesn’t automatically pass to the surviving co-owner. It goes where the deceased person directed it in their will or trust. If they had nothing in writing, state intestacy laws decide for them.
This matters. And most people don’t think about it until it’s too late.
Tenancy in Common vs. Joint Tenancy: What’s the Difference?
These are the two main ways unmarried co-buyers hold title. They work very differently.
Joint tenancy includes a right of survivorship. When one owner dies, their share automatically passes to the surviving co-owner. No probate. No will required. This structure can work well for long-term partners who want the home to transfer simply and quickly if something happens to one of them.
But joint tenancy is rigid. All co-owners must hold equal shares. If three people buy together, they each own one-third, full stop. You can’t adjust it to reflect who put in more money or who’s carrying more of the mortgage payment.
Tenancy in common is flexible. You can hold unequal shares that match your actual financial contributions. You can leave your portion to your kids, a sibling, or anyone else you name in your estate plan. And one co-owner can sell their share or borrow against it without the others automatically being pulled into the deal.
For most co-buyers, tenancy in common is the better fit. The Consumer Financial Protection Bureau notes that understanding your rights and responsibilities as a co-owner starts with understanding how title is held. That’s the foundation everything else builds on.
How Ownership Percentages Work in a TIC
You can split ownership any way you want in a tenancy in common. Equal or unequal. It just needs to be documented clearly before you close.
Most co-buying friends go 50/50, especially when both people are putting in equal amounts for the down payment. But that’s not always the right call. Maybe one person is contributing more upfront. Maybe one has a higher income and is taking on a larger share of the monthly mortgage. In those situations, an unequal split is more honest about what the deal actually looks like.
Your ownership percentage matters when the property sells. If you own 60% and the home sells for $600,000, you’re entitled to $360,000 of the sale proceeds before subtracting your share of the mortgage payoff and closing costs. If you own 40%, you get $240,000. The split at closing mirrors the split on the title.
It also affects your taxes. Each co-owner can typically deduct their proportional share of mortgage interest and property taxes on their individual return. Talk to a tax professional before you close, because the exact treatment depends on how your mortgage is structured and how your ownership is documented.
The short version: what you put in should match what’s on paper. If it doesn’t, you’re setting up a future argument.
What Happens When One Co-Owner Wants to Sell?
This is the question people should ask before they buy, not after everything gets complicated.
In a tenancy in common, each co-owner can sell or transfer their share independently. That sounds like freedom. It can also create real problems if you haven’t planned for it.
Say your co-owner wants out. They could theoretically sell their share to a stranger. Now you own a home with someone you never agreed to partner with. Most co-buyers didn’t sign up for that.
Or one of you wants to sell the whole property and the other doesn’t. Without a written agreement covering this scenario, you’re looking at a potential legal dispute. In the worst case, either party can petition a court for a partition sale, which forces the property onto the market, often below value, to resolve the stalemate.
None of this has to happen. The legal structure of your ownership is just the starting point. The co-ownership agreement is what actually protects you when life changes.
Build your co-ownership agreement before you make an offer. Pairgap’s Real Estate Prenup Builder covers exit rights, buyout terms, financial responsibilities, and what happens when one person wants out. Start your real estate prenup now.
What Co-Buyers Often Get Wrong About Tenancy in Common
A few misunderstandings come up over and over again.
Thinking TIC is enough protection on its own. It’s not. Tenancy in common tells you how the ownership is structured. It doesn’t say what happens when one person stops paying their share of the mortgage. It doesn’t define what a buyout looks like or at what price. It doesn’t cover who handles repairs. That’s what a co-ownership agreement is for.
Not documenting unequal contributions. If one person puts in more for the down payment and holds a larger ownership percentage, that has to be clear on the title and in a signed agreement. A verbal understanding won’t hold up in a dispute. Put it in writing before you close.
Not knowing where their share goes when they die. TIC has no right of survivorship. Without a will or a trust, your share could end up in probate or pass to a family member you never intended. Co-buyers should treat estate planning as part of the purchase, not something to deal with later.
Confusing property rights with financial responsibilities. Owning 50% of a property doesn’t automatically mean you’re responsible for 50% of repairs or maintenance. That arrangement only holds up if it’s in writing. A lot of co-ownership disputes trace back to exactly this disagreement.
What to Have in Place Before You Close
Tenancy in common is the right title structure for most co-buyers. But it’s the beginning of your setup, not the end of it.
Before closing, you and your co-buyer should have a written co-ownership agreement that covers:
- Each person’s ownership percentage and what it reflects financially
- How mortgage payments, property taxes, and maintenance costs are split
- What happens if one person can’t cover their share of the payments
- How decisions about the property are made, and what requires mutual agreement
- Whether the other co-owner gets a right of first refusal if one person wants to sell their share
- How a buyout is priced and structured if one person wants to exit
- What triggers a full sale, and how that process works
According to the National Association of Realtors, co-buying has become a mainstream homeownership strategy, with platforms now helping buyers formalize these arrangements before they close. Having a documented agreement isn’t just smart. It’s what separates a co-buy that works from one that falls apart in year three when circumstances change.
CoBuy’s 2026 National Report found that 96% of co-buyers say they need help with their co-ownership agreement. Every year since 2021, that number has topped the list. Most people know they need it. Fewer actually build one before the deal closes.
Ready to Set Your Co-Ownership Up Right?
Tenancy in common gives you the flexibility to own property with someone else on terms that reflect your actual deal. But the title structure alone won’t protect you when one person loses a job, gets a new partner, or simply decides they want out.
The co-ownership agreement does that work. And the right time to build it is before you make an offer, not after things get complicated.
Download the Pairgap app to see how co-buying works and how to protect yourself every step of the way. Get the Pairgap app now.
