How to buy out a tenant in common?
Asked by: Jewell Dare | Last update: February 19, 2026Score: 4.4/5 (72 votes)
To buy out a tenant in common (TIC), you must first agree on a fair price (often based on an appraisal), secure financing (like a cash-out refinance or HELOC), and then legally transfer the shares by drafting and recording a new deed and potentially refinancing the mortgage to remove the exiting owner's liability. This voluntary buyout requires cooperation, but if unsuccessful, the other party can force a sale through a court-ordered partition action.
How to buy out tenants in common?
If one tenant wants to buy out the other, the property must be sold, and proceeds distributed equally. The ownership portion passes to the individual's estate at death in a tenancy in common.
What is the downside of tenants in common?
Tenancy in Common (TIC) disadvantages include the lack of right of survivorship (meaning a deceased owner's share goes to their estate, potentially with strangers), joint liability for debts/taxes, risk of co-owners selling shares to anyone, potential disagreements over management, and the ability of one owner to force a sale through a partition action. These issues can lead to unwanted co-owners, financial strain, and costly legal battles.
How is ownership divided in a tic?
Here are a few of the benefits of a TIC, as outlined by Los Angeles Magazine: “Each tenant has their own loan, and shares of the property might vary (one person might hold 25 percent while another holds 50 percent), but the entire property is owned by all tenants, and property taxes are split.
What happens when one partner wants to sell and the other doesn't?
When one partner wants to sell a co-owned property and the other doesn't, communication is key, but if negotiations fail, the selling partner can file a partition lawsuit, leading to a court-ordered sale and division of proceeds, though buyout options or mediation might offer less costly alternatives to resolve the deadlock and allow both parties to move on.
Understanding 'Tenants in Common' | Home Owning Advice
Can a partner refuse to be bought out?
You can only sell if you both agree or you get an order to sell from the court. You cannot ignore a court order; otherwise, you'll be held in contempt of court and could go to jail. You could keep the property and buy your partner out.
What happens if one sibling wants to sell and the other doesn't?
If one sibling wants to sell an inherited property and another doesn't, solutions involve negotiation (buyout, co-ownership agreement) or legal action like a partition lawsuit to force a sale, with mediation often recommended to avoid costly court battles and preserve family relationships, though a court can ultimately order the property sold if agreement fails.
Is tenants in common a good idea?
Tenancy in Common (TIC) is a good idea for flexible, non-equal ownership, allowing shared property investment, varied shares (e.g., 70/30), and leaving your share to heirs, making it great for investors or blended families. However, it's risky if you lack trust, as each owner can force a sale and is liable for all debts (taxes, mortgage), potentially bringing new owners in against your will unless a strong TIC agreement (with legal review) is in place to define responsibilities and dispute resolution.
What are common TIC agreement pitfalls?
Tenant in Common (TIC) agreements often face challenges such as disagreements over property management and decision-making, financial disputes related to unequal contributions or payment responsibilities, and differing investment goals among co-owners.
What is the best way to leave property to your children?
The best way to transfer property to children depends on your goals, but generally, using a Revocable Living Trust or a Transfer-on-Death Deed (TODD) (where available) are superior to gifting directly because they avoid probate, allow you to retain control, and often provide a crucial "step-up in basis" for capital gains tax purposes upon your death, minimizing taxes for your children. Gifting property now can trigger high capital gains taxes for your children later, while trusts offer control and tax advantages, but have upfront costs.
Which must always be true of tenants in common?
Tenants in Common in California Have the Right to Possess the Entire Property. California's leading real estate law treatise, Miller & Starr, explains that “[e]ach tenant in common has an equal right of possession and, in absence of an agreement to the contrary, one cotenant cannot exclude another from the property.”
How do tenants in common affect inheritance?
As tenants in common, there is no rule of survivorship. Each owner can specify who will inherit their share of the property through a will or other means.
How do you calculate the cost of buying someone out of a house?
Subtract the Outstanding Mortgage: Deduct the remaining mortgage balance from the property's market value to find the total equity. Calculate Each Party's Share: If the property is jointly owned, the equity is typically split based on the ownership agreement.
Can you sell your share in a tenant in common?
In a tenancy in common arrangement, you have the freedom to sell your share independently of the other owner(s).
How hard is it to buy someone out of a house?
If the other person agrees to a buyout, you can purchase their share of the equity in your home (typically 50%). You'll also need to remove their name from any shared home debts by refinancing it in your name alone and have the other person file a quitclaim deed to take their name off the home's title.
What are the risks of tenants in common?
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.
What is the 3-3-3 rule in real estate?
The "3-3-3 Rule" in real estate typically refers to a financial guideline for home buyers, suggesting monthly housing costs stay under 30% of gross income, saving 30% for a down payment/buffer, and the home price shouldn't exceed 3 times annual income, preventing overspending and building financial security for unexpected costs, notes Chase Bank, CMG Financial, and MIDFLORIDA Credit Union. Another interpretation, Mountains West Ranches https://www.mwranches.com/blog/3-3-3-rule-a-smart-guide-for-real-estate-buyers, is for buyers to have three months of savings, three months of mortgage reserves, and compare three properties, while agents use a marketing version: call 3, write 3 notes, share 3 resources.
Why are condos not selling right now?
Condos aren't selling well due to a combination of soaring costs (HOA fees, insurance, special assessments), higher mortgage rates, new safety regulations (like those in Florida), a shift in buyer preferences away from dense urban areas, and a slowdown in the rental market, creating an oversupply and a difficult market for buyers despite lower list prices.
Is it easy to dissolve tenants in common?
Yes, you can dissolve a tenancy in common a few ways. Selling the property and splitting the proceeds according to ownership shares. Buying a co-owner's shares and distributing them to the remaining owners. Filing a partition action in court.
How does tenants in common affect taxes?
The property remains a single unit in the eyes of the law; tenancy in common is merely an agreement among the owners about how they own that single property. Typically, real estate taxes will be assessed on the property, and all owners listed on the deed are legally responsible for the full amount of the tax.
What is 50 50 tenants in common?
If you hold the property as tenants in common, this means that you each own a specific share in the property. It is your decision how you wish to split the shares, whether this is 50/50 or 80/20.
How do you calculate buying a sibling out of a house?
Most properties are inherited evenly, so unless otherwise stated, you and your sibling likely have 50/50 ownership of the home. If one sibling wants to buy out the other, this means they would need to finance half of the home's value.
Is it better to inherit a house or buy for $1?
Inheriting a home provides a “step-up” in cost basis for capital gains tax purposes, meaning you're taxed only on appreciation after the date of inheritance. By contrast, buying a house for $1 means your cost basis is the original owner's purchase price — potentially leading to higher taxes if you sell in the future.
Why is moving out the biggest mistake in a divorce?
Moving out during a divorce is often called a mistake because it can harm your financial standing (paying two households), weaken your position in child custody (appearing less involved), and complicate asset division by creating an "abandonment" perception, making courts favor the spouse who stayed, though it's not always a mistake, especially in cases of domestic violence where safety is paramount. Staying in the home, even in separate rooms, preserves the status quo, keeps you present for kids, and maintains your connection to the property until formal agreements are made.