What is Tenancy-In-Common Ownership in Washington Real Estate? Tenancy-In-Common is one way for two or more persons to hold ownership together in Washington Real Estate. Each co-tenant owns an undivided interest in the entire property. This means that specific areas of the family cabin are not owned by one co-tenant or another but are shared as a whole collectively. There may be multiple co-tenants with the same or different ownership interests over time. Every co-tenant has the right to possess, use and enjoy the entire property. As a result, each co-tenant can do more or less what they want to do with their own interest, including sell, transfer and even encumber it without the consent of the other co-tenants. It is recommended that the co-tenants create a written co-tenancy agreement which specifies the rights and duties of each co-tenant including the payment of property taxes, utilities and maintenance as well as a right of first refusal in the event of a sale, transfer, death or bankruptcy. It is best to record the agreement or at least notice of the agreement with the County Auditor. The interest of each co-tenant passes onto their estate as there is no right of survivorship as in the case of a Joint Tenancy.
Sometimes one of the co-tenants fails to pay for his or her fair share of the property taxes, utilities and maintenance. Or perhaps the co-tenants disagree about the future use of the property. In the event that the co-tenants are unable to resolve their disputes and amicably agree, then each co-tenant has a statutory right to partition the property in Superior Court. A judge may order a partition in kind by physically dividing the property between all of the co-tenants, or alternatively, order a partition by sale. While the partition in kind is favored by the Court the fundamental question is whether the partition in kind would somehow prejudice the owners.
If for example a partition into separate lots would not comply with the current zoning and subdivision laws and codes, then the co-tenants would not be able to obtain building, septic and other development permits. Any such division would be illegal as partitions are not exempt from subdivision requirements in Washington. Clearly, the co-tenants would be prejudiced. To avoid the prejudice the Court may order a partition by sale.
Another example involves the fair market value of the property. Would the entire property have a fair market value greater or less than all of the partitioned lots individually? Realizing the fair market values may not add up there may be prejudice when the entire property has a greater fair market value than the partitioned lots individually. In this case the Court has the power to offset any differences in the valuation by a monetary award or equitably if possible. If the prejudice can not be reconciled by the Court equitably, then a partition by sale may be ordered.
It is not uncommon for the Court to appoint a Referee or a Special Master to assist with the feasibility of a subdivision, or potential sale.
The above is information is by no way exhaustive. And the above is not intended to be legal advice but is general information provided as a courtesy.
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