Are you looking to purchase a property with someone else? If so, you may want to consider creating a tenants in common (TIC) agreement to outline your rights and responsibilities as co-owners. A TIC agreement can help prevent disputes and clearly define each person`s role in the property.
Here are some simple tenants in common agreement clauses that you should include:
1. Ownership Percentage
In a TIC agreement, each owner has a percentage of ownership in the property. This percentage can be based on the amount of money each person contributed to the purchase or determined by agreement. The agreement must clearly indicate the percentage of ownership for each owner.
2. Use of the Property
A TIC agreement should define how the property will be used. Will it be a rental property, or will one or more of the owners live in the property? If it is a rental property, who will manage it and what will the responsibilities be? If one or more of the owners will live in the property, how will expenses be shared?
3. Maintenance and Repairs
The agreement should define who is responsible for maintenance and repairs of the property. Will each owner be responsible for maintaining and repairing their portion of the property, or will the responsibility be divided equally among the owners? You should also include a dispute resolution process in case of disagreements.
4. Property Taxes and Insurance
Taxes and insurance are important expenses for any property owner. In a TIC agreement, you should decide how these expenses will be paid. Will they be divided equally among the owners, or will each owner be responsible for paying their own share?
5. Sale or Transfer of Ownership
In the event that one or more owners want to sell or transfer their ownership interest in the property, a TIC agreement should outline the process. Will the other owners have the right of first refusal to purchase the ownership interest, or will the property be sold on the open market? You should also include a process for determining the value of the ownership interest.
Creating a tenants in common agreement can help avoid disputes and provide clarity to each owner`s role and responsibility. Make sure to consult with a legal professional to ensure your TIC agreement is properly executed.