Ownership in common is a legal concept that defines the manner in which two or more people (or entities) share ownership of an asset, property or business. This concept is sometimes referred to as joint ownership or co-ownership, as the owners – referred to as co-owners or tenant in common – have shared interests and rights in the subject asset.
There are two forms of common ownership: joint tenancy and tenancy in common. The main difference between the two formats is that in a joint tenancy the co-owners own equal shares of the property, while in a tenancy in common the co-owners own unequal shares.
In both forms of commonly owned assets, the co-owners each possess the right to use the entire asset (or property) as if they owned the entire asset in full. At the same time, each co-owner owns only his or her portion of the asset, and the other co-owners do not have the right to sell, lease or exclude the asset without the others’ consent. When one of the co-owners passes away, their portion of the asset is distributed to the other owners, or to their beneficiaries if stated in a will or trust agreement.
Ownership in common is widely used in business partnerships where two or more individuals decide to share a business or start a company together. It is also used in cases where a couple buys a home together and both are named on the title, but neither owns the property in full. Commonly owned assets can also take the form of cars, jewellery or real estate.
Examples of Ownership in Common
Two brothers investing in a rental property. The title of the property is held by both brothers in common ownership, and they possess the right to use the entire property as if they owned it in full.
A business partnership. A partnership between two (or more) individuals would see the company owned in common. This could be a tavern or a construction business.
Two individuals buying a car. The two people would own the car in common, owning their portion of the car and possess the right to use the car as if they owned the car in full.
Conclusion
Ownership in common is a legal concept that defines how two or more people (or entities) can share ownership of an asset, property or business. Ownership in common is widely used in business partnerships and in cases where two individuals purchase a home, car or other asset together. Each co-owner has the right to use the entire asset as if they owned the asset in full.