- In non-TIC transactions, multiple owners use an LLC or other business entity to acquire title. Under a tenants in common structure, the seller deeds an undivided interest in the real estate directly to each buyer. If ownership will not be equal, the owners can specify each party's percentage interest.
- Tenants in common deals expand the number of properties available to real estate investors. By sharing ownership with others, the TIC buyer can invest in a larger property than she could buy on her own. Investors can also use TICs to diversify their investments among multiple deals.
- Buyers of tenants in common real estate need an agreement with all of the other buyers to detail their respective rights and obligations. The agreement should address the key issues associated with property ownership, such as performing and paying for maintenance, taxes, insurance, leasing, and property sales.
- If structured in compliance with IRS rules, TICs can allow owners to utilize Section 1031 of the Internal Revenue Code for tax-deferred exchanges. Great care and professional advice is recommended if the TIC owners want to qualify under Section 1031.
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