Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 2

In a Tenants in Common (TIC) agreement, how is ownership characterized?

1. All owners must have equal shares

2. Ownership is solely based on cash contribution

3. Ownership can be equal or unequal among owners

4. All properties must be jointly owned

The correct answer is: Ownership can be equal or unequal among owners

In a Tenants in Common (TIC) agreement, ownership is indeed characterized by the ability for ownership stakes to be equal or unequal among the owners. This means that each owner can hold a different percentage of ownership in the property based on their investment, cash contribution, or mutually agreed terms. This flexibility allows individuals to invest in property collectively while still reflecting their individual levels of investment. It’s important to recognize that this arrangement contrasts with other forms of ownership, such as joint tenancy, where all parties must hold equal shares. In a TIC, one owner could own a larger share, while another might own a smaller one, providing a versatile structure for property investment. Furthermore, there’s no requirement that all properties within a TIC must be jointly owned, giving owners the independence to manage and control their shares as they see fit. This makes TIC an attractive option for groups looking to invest in real estate together without being bound by strict ownership regulations.