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Tenancy Common Agreement

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Tenancy in Common Agreement (Married Couple)

This Tenancy in Common Agreement (“Agreement”), effective as of (“Effective Date”), is between:

1. (full name) having an address at (address); and

2. (full name) having an address at (address).

The above mentioned parties are a married couple and are referred to in this Agreement as the “Owners.” The Owners acquired the property described on Exhibit A, attached to this Agreement and incorporated herein by this reference (“Property”). The Owners desire to provide for the proper and orderly ownership, operation, and management of the Property, and to designate the Owners' respective ownership interests.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth below, the Owners hereby agree as follows:

1. Term. This Agreement shall be effective as of the Effective Date and shall continue for a period of forty (40) years unless sooner terminated by the consolidation of the Property’s ownership in a single Owner or upon the written agreement of all the Owners.

2. Ownership.

2.1 Tenants in Common. The Owners shall hold title to the Property as tenants in common. The Owners intend to utilize the Property as their individual principal residences.

2.2 Ownership and use of the Property is Governed by this Agreement. This Agreement establishes and imposes on the Property limitations, easements, covenants, conditions, and restrictions as equitable servitudes pursuant to a general plan to provide for the proper and orderly ownership, operation, and management of the Property and of the Owners' respective ownership interests therein. Such equitable servitudes shall run with the land and shall be binding upon the Owners and their successors and assigns, and all parties having or acquiring any right, title, or interest in the Property.

2.3 Each Owner's fractional undivided interest (each the respective Owner's “Interest”) in the Property is as follows:

Owner Interest

1. %

2. %

Each Owner's Interest shall remain as set forth above regardless of any improvements or additions made to the Property including an Owner's Private Living Area (as defined below). The respective Owners are at times referred to as “Owner 1” and “Owner 2” in the Exhibits to this Agreement.

2.4 Separate Property (applicable only if Owners are husband and wife).

(a) Each Owner shall own their Interest in the Property as their separate property and not as community property.

(b) Each Owner's Interest in the Property shall remain the same regardless of whether personal property or community property funds are used to make mortgage payments even if one Owner benefits over the other Owner because of the source of funds used to make such payments.

(c) Repairs, maintenance, improvements, remodeling, and additions (“Improvements”) to the Property shall have no affect on each Owner’s Interest in the Property regardless whether separate property or community property funds are used to make such Improvements.

(d) Each Owner shall share in the appreciation or depreciation of the Property in proportion to their Interest.

3. LIVING AREAS

3.1 Private Living Area. Exhibit A shall describe the private living area(s) for each Owner. Each Owner shall have the exclusive right to use and enjoy their respective Private Living Areas. An Owner shall not enter the Private Living Area of another Owner without such Owner's permission except as provided in this Agreement.

3.2 Common Area. Any area not designated as a Private Living Area is the Common Area.

3.3 Occupancy Area. For purposes of this Agreement, an Owner's Private Living Area and their share of the Common Area is their “Occupancy Area.”

4. Selling or Leasing an Owner's Interest

4.1 Right to Sell. Each Owner shall be entitled to sell their interest in the Property upon compliance with the requirements of this Agreement including the terms in Section 12 below.

4.2 Right to Lease. Each Owner shall be entitled to lease their Occupancy Area and to all the income derived from such lease provided all of the non-leasing Owners shall approve a prospective tenant upon their review of and satisfaction with such tenant’s standard form rental application, credit report, tax returns, and other information as the non-leasing Owners may reasonably request from the prospective tenant or leasing Owner.

The leasing Owner shall comply with all applicable laws governing residential tenant evictions. All expenses, including reasonable attorneys’ fees, arising from evicting a leasing Owner's tenant shall be borne solely by the leasing Owner.

The leasing Owner shall remain primarily responsible for the payment of all Assessments, and other financial obligations under the Agreement.

Nothing in this Agreement shall be construed to prohibit an Owner from sharing their Occupancy Area with a non-owner roommate.

5. MAINTENANCE

5.1 Maintenance and Improvements of Private Living Area. Each Owner shall maintain and repair their Private Living Area at their sole expense including painting, cleaning, and repair of all interior walls, floors, ceilings, fixtures, and appliances and maintain all utility lines, plumbing, pipes, and conduits that serve their Private Living Area exclusively.

5.2 Limited Right of Entry. An Owner or their agents, may enter the Private Living Area of another Owner whenever such entry is necessary to perform any maintenance repairs or construction for which the Owners as a group are responsible.

5.3 Common Area Maintenance and Improvements. The Owners shall share the cost in keeping and maintaining the common Area in good condition and repair as described in this Agreement.

6. GOVERNANCE

6.1 Management. The Owners shall not form a business entity or partnership for the purpose of operating or managing the Property. However, the Owners may hire a manager upon the unanimous written consent of all the Owners.

6.2 Voting Rights. Each Owner shall have one vote on issues affecting Property and the Owners' Interest regardless of percentage ownership.

6.3 Formal Meetings. There shall be no requirement for formal meetings to vote on Matters except the Owners shall meet annually to determine Assessments as described below.

6.4 Community Rules. The Owners may from time to time, subject to this Agreement, adopt and amend written rules of general application to the Property (“Community Rules”).

7. Books and Accounts

7.1 Bank Accounts. All sums received or collected by the Owners from Assessments shall be promptly deposited in one or more insured accounts opened in the names of all the Owners.

7.2 Payments. Withdrawals from any such account in excess of Four Hundred Dollars ($400.00) shall require the written consent of all the Owners.

7.3 Books of Account. At each annual meeting, the Owners shall designate one Owner among them to supervise the monthly collection of all Assessments.

8. ASSESSMENTS

8.1 Equally Shared Expenses. Each Owner shall equally share expenses related to maintaining the Common Area, minor maintenance and repairs, and commonly shared utilities.

8.2 Proportionately Shared Expenses. Each Owner shall contribute proportionally to expenses that relate to their proportionate Interest in the Property.

8.3 Assessments. The Owners shall levy and collect assessments to cover foreseeable Property expenses.

8.4 Initial Assessments. Within 30 days following the execution of this Agreement, the Owners shall create a pro forma operating budget.

8.5 Subsequent Assessments. At least thirty (30) days prior to the beginning of each fiscal year, the Owners shall estimate the total Assessments for the upcoming year and create a budget.

8.6 Exhibit C. Initial and Subsequent Assessments shall be set forth on Exhibit C.

8.7 Special Assessments. Any time the Assessment for any fiscal year is insufficient due to extraordinary expenses not contemplated in the budget, the Owners shall levy and collect a special assessment.

8.8 Due Date and Default. Each Owner’s Assessment share shall be due on the date specified in Exhibit C.

9. MORTGAGE

9.1 Mortgage. Each Owner shall pay their share of any payments due and that become due on all indebtedness secured by a deed of trust to the entire Property.

9.2 Exhibit D. Details on the Mortgage and each Owner’s responsibility relating to the Mortgage is set forth on Exhibit D of this Agreement.

9.3 Due Date and Default. Each Owner’s share of the Mortgage shall be due on the date specified in Exhibit D.

10. INSURANCE

10.1 Scope of Insurance Coverage. The Owners shall purchase, obtain and maintain the following types of insurance:

(a) Fire and Casualty Insurance. A blanket policy or policies of fire and casualty insurance for the full replacement value of the Property and all improvements thereon.

(b) Earthquake Insurance. A blanket policy for earthquake insurance for the Property and insurable improvements in the Property to the extent available at commercially reasonable rates.

10.2 Coverage Not Available. If any required insurance policy is not available, then the Owners shall obtain a substitute policy or endorsement as may be available.

10.3 Annual Adjustment. The Owners shall annually review all policies of insurance on the Property and make adjustments if necessary.

11. REFINANCING

11.1 Refinancing. The Owners agree that no debt secured by a lien against the entire Property shall be refinanced unless unanimously approved by all the Owners, except as provided in this Section 11.

11.2 Refinancing Expenses. Refinancing expenses shall be allocated to Owners in proportion to their then-existing debt shares.

11.3 Assumable Loans. In connection with the refinancing of any loan secured by the entire Property, the Owners shall reasonably attempt to secure a loan that is assumable.

12. SALE OF OWNERSHIP INTEREST TO A THIRD PARTY.

12.1 Limitation on Transferees. No Owner shall sell their Interest, whole or in part, to any entity that may not legally hold property as a tenant in common.

12.2 Right of First Refusal. Each Owner grants each of the other Owners the right of first refusal with respect to any proposed sale or transfer of any portion of an Owner's Interest.

12.3 Owner Approval Prior to Sale to a non-Owner. Selling-Owner shall not sell their Interest in the Property without prior approval by all the Remaining-Owners of the prospective buyer.

13. SALE OR EXCHANGE OF ENTIRE PROPERTY. Except as expressly provided in this Agreement, the entire Property may be sold only upon the unanimous consent of all the Owners.

14. EFFECT OF TRANSFER. Upon the sale or other transfer of a Selling-Owner's Interest, the transferee (“New-Owner”) shall become a tenant-in-common with the Remaining-Owners.

15. ENCUMBRANCE OF INTERESTS. Each Owner covenants and agrees that they shall not encumber, hypothecate, mortgage, pledge, assign or otherwise alienate for security purposes their Interest without first obtaining the prior unanimous written consent of all the other Owners.

16. DEFAULTS AND REMEDIES

16.1 Defaults. The following events shall be deemed a default if not cured within seven (7) days of written notice from a non-defaulting Owner.

16.2 Remedies. Any Owner or Owners in compliance with the Agreement shall have the remedies described in this Section 16.2 against a Defaulting Owner.

17. RIGHT TO PURCHASE AS CONDITION PRECEDENT TO PARTITION. Each Owner shall retain their right as a tenant-in-common to unilaterally seek and obtain a partition and sale of the Property, subject to satisfaction or waiver by the other Owners of the conditions precedent.

18. PROCEEDS FROM SALE OF PROPERTY

18.1 Interest. An Owner that sells their Interest as provided in this Agreement shall be entitled to all proceeds realized from such sale less applicable liens, encumbrances, and expenses.

18.2 Entire Property. Upon the sale of the entire Property, the balance of proceeds, if any, shall be divided among the Owners in proportion to their respective Interests.

19. ATTORNEY FEES AND COSTS. If any party institutes any legal action or arbitration to enforce or interpret this Agreement, the prevailing party shall be entitled to reasonable attorney fees.

20. GOVERNING LAW. This Agreement shall be subject to, governed by, and construed in accordance with the laws of the State of California.

21. AMENDMENT. This Agreement may be amended only by the written agreement of all Owners.

22. INDEMNITY. Each Owner shall indemnify and hold harmless each of the other Owners from any expense and liability resulting from negligence or misconduct on their part.

23. DISPUTE RESOLUTION. Except as provided in Section 16, any controversy, dispute, or claim arising out of this Agreement shall be resolved by mediation and binding arbitration.

NOTICE: BY INITIALING IN THE SPACE BELOW, YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION” PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW.

Initials:

Initials:

24. NOTICES. Notices and other communications required or permitted by this Agreement must be made in writing and delivered personally, by registered mail, facsimile, or by e-mail.

25. SEVERABILITY. If any part or provision of this Agreement is determined to be invalid or unenforceable, the remaining portions shall continue in full force and effect.

26. NO WAIVER. The waiver by an Owner of any covenant contained in this Agreement shall not be deemed a continuing waiver.

27. BINDING. This Agreement shall inure to the benefit of, and shall be binding upon, each of the Owners, their heirs, assigns and successors in interest.

28. SEPARATE COUNSEL. The Owners are advised to consult with their own separate legal, tax, and financial counsel before signing this Agreement.

Each Owner has executed this Agreement to be effective as of the Effective Date.

OWNERS:

Print Name:

Sign:

Date:

Print Name:

Sign:

Date:

EXHIBIT A

to the Tenancy in Common Agreement dated

PROPERTY DESCRIPTION AND PRIVATE LIVING AREAS

Capitalized terms in this Exhibit shall have the same meaning assigned to those terms in the Agreement.

EXHIBIT B

to the Tenancy in Common Agreement dated

COMMUNITY RULES

Capitalized terms in this Exhibit shall have the same meaning assigned to those terms in the Agreement.

The Property shall be used exclusively for residential purposes in conformity with the Agreement and the requirements imposed by applicable zoning or other applicable laws.

The total number of Owners shall not exceed and the total number of tenants shall not exceed .

No illegal activities shall be carried out or conducted on the Property.

No noxious or offensive activities shall be carried out or conducted on the Property which is or could become an unreasonable annoyance or nuisance to other Owners.

EXHIBIT C

to the Tenancy in Common Agreement dated

Calculation of Assessments

Capitalized terms in this Exhibit shall have the same meaning assigned to those terms in the Agreement.

Estimated Monthly Equally Shared Expenses (“ESE”)

Estimated Monthly Proportionately Shared Expenses (“PSE”)

Total Estimated ESE:

Total Estimated PSE:

Monthly Assessments are due on or before:

EXHIBIT C (continued)

to the Tenancy in Common Agreement dated

Assessment Payment Record

Owner 1 Amount of Monthly Assessment: $

Payment # Due Date Date Paid Late Fee Date Late Fee Collected
1
2
3
4
5
6
7
8
9
10
11
12

Owner 2 Amount of Monthly Assessment: $

Payment # Due Date Date Paid Late Fee Date Late Fee Collected
1
2
3
4
5
6
7
8
9
10
11
12

EXHIBIT D

to the Tenancy in Common Agreement dated

MORTGAGE

Capitalized terms in this Exhibit shall have the same meaning assigned to those terms in the Agreement.

Total Purchase Price:

Total Down Payment:

Loan Amount:

Minimum Payment:

Due Date:

Payment Record

Owner 1 Minimum Monthly Mortgage Payment: $

Payment # Due Date Date Paid Amount Paid Amount in Excess of Min Late Fee Date Late Fee Collected
1
2
3
4
5
6
7
8
9
10
11
12

Owner 2 Minimum Monthly Mortgage Payment: $

Payment # Due Date Date Paid Amount Paid Amount in Excess of Min Late Fee Date Late Fee Collected
1
2
3
4
5
6
7
8
9
10
11
12
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What a Tenancy Common Agreement Is and When It Applies

A Tenancy Common Agreement is a written contract among co-owners of real property who hold undivided fractional interests. It documents each co-owner's ownership percentage, capital contributions, rights to possession, expense sharing, responsibility for taxes and liens, and procedures for sale, transfer, or buyout. The agreement clarifies management authority, dispute resolution, and exit mechanics to reduce title disputes and facilitate recording at the county recorder's office. Parties commonly execute this document when acquiring property together, converting joint ownership, or formalizing shared investment terms.

Why a Written Agreement Matters for Co-Owners

A clear Tenancy Common Agreement reduces ambiguity about contributions, expenses, and transfer rights; it preserves marketability of each interest and helps avoid litigation. When combined with a recorded deed and properly executed signatures, the agreement supports clear title and enforces expectations among co-owners.

Why a Written Agreement Matters for Co-Owners

Who Typically Prepares and Signs This Agreement

This agreement is used by individuals, investors, and entities entering co-ownership of real property where ownership shares may differ.

  • Individual investors pooling funds to buy rental property; they split income, expenses, and management duties by percentage shares.
  • Family members holding inherited property who want defined rights for occupancy, maintenance, and future transfers.
  • Business partners or LLCs owning property where separate tenancy interests require internal rules to avoid disputes.

Legal counsel often drafts or reviews the agreement to ensure it interacts correctly with the deed, mortgage covenants, and state recording requirements.

Essential Elements to Include in a Professional Agreement

A robust Tenancy Common Agreement addresses ownership shares, use and possession rules, financial responsibilities, transfer mechanics, dispute resolution, and administration details.

Ownership Shares

Specify each party's percentage interest, how percentages are calculated, and how future capital contributions affect shares to prevent ambiguity on distribution and sale proceeds.

Possession & Use

Define occupancy rights, rental policies, restrictions on exclusive use, and protocols for short-term rentals or third-party leases to manage property use consistently.

Contributions & Expenses

Document initial capital contributions, ongoing expense splits (taxes, insurance, maintenance), payment schedules, and remedies for delinquency to protect cash flow and liability allocation.

Transfer Rules

Include right-of-first-refusal, buyout formulas, permitted transferees, and consents required to avoid involuntary co-ownership changes that can cloud title.

Management Authority

Outline who can bind the property for repairs, hire managers, or sign leases and whether approvals or thresholds are required for major decisions.

Dispute Resolution

Provide mediation and arbitration provisions, governing law selection, and procedures for partition actions to reduce costly courtroom disputes.

Step-by-Step: Preparing and Executing the Agreement

Follow these sequential steps to create, sign, and record a Tenancy Common Agreement with minimal risk of defects.

  • 01
    Gather Records: Collect deed, title report, IDs, and mortgage details before drafting.
  • 02
    Draft Agreement: Use clear clauses for shares, transfers, and expenses; consider lawyer review.
  • 03
    Sign and Notarize: All parties sign before a notary; follow state rules for witnesses if required.
  • 04
    Record Documents: Record the deed and, if advisable, the agreement or memorandum with the county recorder.

Setting Up an Online Workflow for Completion and Signatures

Configure a repeatable online flow to collect signatures, evidence of consent, and proof of identity while capturing an audit trail.

Field Configuration
Template Create a reusable agreement template with fixed clauses and fillable fields.
Signer Order Decide sequential or parallel signing to match negotiation needs.
Authentication Set email plus SMS code or ID verification for higher assurance.
Completion Notice Configure automatic delivery of signed PDF and audit certificate to all parties.

Where to Send and File the Final Agreement

After signatures, distribute copies to all parties and record as appropriate; maintain a certified copy for title continuity.

  • County Recorder: Record deed; consider recording a memorandum of agreement.
  • Lender: Notify mortgagee if ownership change affects loan covenants.
  • Co-Owners: Provide each co-owner a signed certified copy.
  • Tax Authorities: Retain copies for tax reporting and basis documentation.

Digital Signing and File Formats to Support

Use platforms that create tamper-evident signed PDFs, capture audit trails, and support identity verification for each signer.

  • File Formats: PDF and DOCX accepted; final signed copy should be PDF.
  • Integrations: Support for CRM and storage like Salesforce, NetSuite, Box.
  • Authentication: Email, SMS code, and ID verification options supported.

Ensure the chosen workflow supports exporting an audit certificate, long-term storage (PDF/A), and optional notarization or RON features as permitted by state law.

Timing Considerations and Typical Timeframes

Key dates help protect interests and ensure enforceability; record deeds promptly and meet tax-reporting timelines when applicable.

Effective Date Entry:

Set as MM/DD/YYYY at signing to fix rights and obligations.

Deed Recording:

Record at county recorder as soon as administratively possible to protect title.

Mortgage Notification:

Notify lender immediately if required by loan documents to avoid default.

Tax Documentation:

Retain records for IRS reporting; consult tax advisor for timing.

Notary/RON Session:

Schedule notary or RON prior to execution if the state requires it.

Common Mistakes to Avoid

  • Using informal or ambiguous language that creates interpretive disputes later.
  • Failing to match owner names precisely to deed or entity formation records.
  • Neglecting to set clear transfer mechanics and buyout formulas.
  • Skipping notarization or recording, which can cloud title and reduce enforceability.

Key Risks and Consequences of Errors

Clouded Title: Delayed or lost sale proceeds
Tax Exposure: Incorrect basis reporting
Mortgage Default: Lender remedy risk
Litigation: Partition or breach claims
Recording Rejection: Clerical refusal to accept
Invalid Signature: Enforceability challenges

eSignature Vendor Comparison for Executing This Agreement

Compare baseline pricing and key capabilities relevant to real estate agreements; signNow is listed first to align with the comparison format.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Illustrative Scenarios: How Parties Use This Agreement

Two short, practical examples show typical reasons to adopt a Tenancy Common Agreement.

Small Investor Collective

A group of four investors buys a rental property to split income and expenses.

  • They document percentage ownership and buyout formulas.
  • The written agreement reduced disputes by clarifying rental income distribution and established an agreed sale process when one investor wanted to exit.

Family Co-Ownership

Siblings inherit a vacation home and want clear usage rules.

  • They set rotation and maintenance shares.
  • The agreement prevented friction by recording occupancy schedules, maintenance obligations, and a valuation method for voluntary transfers.

Information Commonly Required in the Agreement

Legal Description: Full parcel legal description
Owner Identities: Full legal names and entity types
Ownership Split: Percentages or fractional interests
Contribution Details: Initial capital and obligations
Signatures: Dated signatures and notarization
Governing Law: Selected state for disputes

Frequently Asked Questions About Execution and Validity

Answers to common questions about signing, recording, and enforcing a Tenancy Common Agreement in the United States.


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