TIC
See Tenants in Common.
Frequently Asked Questions about Tenants in Common (TIC)
Why might investors choose a TIC structure?
TIC allows multiple parties to pool resources and acquire property they may not be able to afford individually. For example, four family members at Sterling Family Investments used TIC to acquire a $36M multifamily asset by contributing varied capital amounts.
What are the financial risks of a TIC structure?
All co-owners typically share joint liability for the property’s mortgage, meaning any one of them could be held liable for the full debt if others default. This increases financial exposure for all TIC participants.
Can TIC ownership shares be unequal?
Yes. In the Sterling Family example, shares were distributed based on financial contribution: 40%, 30%, 20%, and 10%. TIC is flexible in this regard, unlike joint tenancy, which requires equal shares.
How can co-owners manage TIC-related risks?
Through a detailed TIC agreement. The Sterling family used one to outline responsibilities, default protocols, and ownership terms, ensuring clear expectations and legal protection for all parties.
Is TIC ownership recognized for 1031 exchanges?
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