A Comprehensive Guide to Tenancy in Common Georgia
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What Is Tenancy in Common in Real Estate?
There are many advantages to tenancy in common in Georgia, but there are a few disadvantages to keep in mind as well. Faulkner Law Offices can explain. Call now!
Author: Stan Faulkner, Founder, Perigon Legal Services, LLC
Mr. Faulkner is an experienced counselor and litigator with 15 years of experience, having held bar licenses in four states (Mo, Il, Ct and Ga). Stan Faulkner uses this experience and focuses his skills in the pursuit of assisting individuals in probate (trust and estate) matters, guardianships and conservatorships, estate planning, business disputes and contract disputes. Published on January 23, 2023.
While buying a property with someone else, there may be multiple ways in which it can be titled. Tenancy in common might be a good choice if two or more persons who are related or unrelated are buying property for investment or other purposes.
Tenancy in common is a kind of co-ownership where each person owns a fractional interest in the property. This type of ownership is commonly found in condominiums but can also exist in single-family homes and multi-unit apartment buildings.
Since exact laws vary, speaking with a skilled real estate attorney can help you understand Georgia property laws. They can help you determine whether tenancy in common is a good titling option for you.
How Does a Tenancy in Common Work?
In order to create a tenancy in common, more than one person has to be involved, and they should have an undivided interest in the whole property. They can then partition their interest into specified percentages or fractions, depending on what makes sense for them.
The co-owners may have unequal shares in the property. However, unless specific clauses of their agreement state otherwise, the person with a more significant share is not allowed to have preferential rights as to possession of the property.
When creating this type of property ownership, it is often wise to consult a reputable legal authority for advice.
What Are the Legal Rights of Co-Owners in a Tenancy in Common?
Although understanding the United States property law basics is helpful, the laws pertaining to property ownership are slightly different in every state. Therefore, knowing the market’s particular laws when buying and selling properties in the state can make your transactions more straightforward and successful.
Per GA. Code 44-6-120, Tenancy in Common, the owners in a tenancy in common arrangement are considered to be co-owners of a property. Even though the shares may not be equal, all of the co-owners are entitled to full use of the property.
Unlike a joint tenancy, co-owners in a tenancy in common are not required to assume property possession simultaneously. They share property ownership and can sell those shares to other people. There is no right of survivorship, and the ownership rights of a particular share would pass to the heirs of the co-owner upon their death.
Is Tenancy in Common a Good Thing?
Georgia recognizes tenancy in common as a type of co-ownership that allows multiple owners to set graduating percentages of ownership. For example, if one owner wants to sell their share of the property, it will be sold as a percentage (or fraction) of the whole and not just as a single unit like you would find with other types of ownership like joint tenancy or tenancy by the entirety.
Tenancy in common is a popular form of ownership for
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Condominiums
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Townhouses
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Other types of dwellings
In this type of ownership, each owner has a share of the property and an undivided interest in the whole.
Tenancy in common is a type of co-ownership with several advantages and disadvantages.
The advantages include that it allows people to decide what they want to do with their share and provides a great way to protect one’s assets from future lawsuits or creditors. Unless agreed otherwise, there is no need for the agreement to be signed by all the parties when a part of the interest is being sold. Whereas, in the case of joint ownership, the sale of the property cannot be fragmented.
Are There Any Disadvantages of Tenancy in Common?
The main disadvantage of tenancy in common is that any tenant could transfer their share to any other person without the consent of the other tenants. That means that one of the tenants can decide to sell a share to someone the other tenants dislike, and they have no legal recourse to stop the sale.
There can also be potential disagreements with other co-owners regarding the use of the property and disputes over how much each person should contribute towards costs such as taxes and maintenance.
Moreover, in a tenancy in common, the right of survivorship doesn’t apply when the owner dies. In a joint tenant situation with the right of survivorship, the property goes to the surviving spouse/co-owner. That is not true in the case of tenancy in common. Since the property owners can bequeath their share to whoever they wish, the subsequent heir may choose to sell their share.
Tenancy in Common Agreement
This is why, when purchasing property, it is important that a closing attorney protect the owner’s interest by drafting a thorough tenancy in common agreement. There, the attorney can determine who will be responsible for things like the following:
- Mortgage
- Taxes
- Georgia Executor Fees
- Utilities
- Maintenance cost
A written agreement can include a provision ensuring that the other owners can either get the opportunity to buy first, a right of first refusal, or interview and choose potential buyers together.
Can Tenancy in Common Be Dissolved?
In a tenancy in common, all the co-owners have an equal interest and privileges with regard to the possession of the property, which means that they can dissolve the tenancy in common anytime by either selling their share or transferring it to another person.
A skilled attorney with experience in the legal area of Georgia estate law can provide assistance and information.
Does Georgia Have Tenancy by the Entirety?
This is why, when purchasing property, it is important that a closing attorney protect the owner’s interest by drafting a thorough tenancy in common agreement. There, the attorney can determine who will be responsible for things like the following:
A tenancy by the entirety is a legal form of ownership. It creates a right of survivorship and is available to married couples only. The surviving spouse automatically inherits the deceased tenant’s property share if one of the joint tenants dies.
Georgia does not recognize tenancy by the entirety. Georgia has tenants in common, which, as explained above, refers to two or more people owning real estate as co-owners with rights to possession and enjoyment of the property.
How Can an Attorney Help Someone With Issues Related to Tenancy in Common in Georgia?
A lawyer can help someone with tenancy in common issues in Georgia by providing legal advice and representation. Tenancy in common agreements are generally more flexible than joint tenancy agreements.
Contact a legal professional, such as those found at the Faulkner Law Offices, for helpful resources or to schedule an initial consultation. Call now!
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