Tenants in Common Agreement Template

This Tenants in Common Agreement (the "Agreement") is entered into on   (the "Effective Date") by and between

WHEREAS the Tenants wish to acquire an undivided interest in and to the real property located at   (the "Property"), a detailed description of which is reflected in Annex A attached hereto, and wish to enter into the Tenants in Common Agreement to provide adequate and orderly management and operation of the Property during the period of joint ownership of the Property by the Co-Tenants;

WHEREAS each Co-Tenant desires to hold a specific percentage or fraction of the undivided interest in the Property, as more particularly described in Annex B attached hereto;

WHEREAS the Co-Tenants acknowledge that this Agreement governs their respective rights and obligations with respect to the ownership, use, and potential transfer of their interests in the Property;

WHEREAS the Co-Tenants acknowledge that there is no right of survivorship, understanding that in the event of the alienation of any Co-Tenant's interest, it shall be transferred at the discretion of the relevant Co-Tenant or in accordance with applicable law;

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein, and upon other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties have agreed as follows:

INDIVIDUAL SHARES OF OWNERSHIP. The Co-Tenants agree that their undivided interests in the Property shall be allocated as follows:

The Tenant 1:  %.

The Tenant 2:  %.

Total ownership of the Property by the Co-Tenants is equal to 100%.

In case of any changes in the ownership structure, including but not limited to the addition or deletion of the Co-Tenants, the Co-Tenants agree to immediately adjust the percentage ownership interests accordingly. Any changes in ownership percentages must be documented in writing and acknowledged by all Co-Tenants, and applicable changes should be reflected in Annex B.

NATURE OF THE RELATIONSHIP BETWEEN THE CO-TENANTS

• Tenants relationship or no partnership. The Co-Tenants shall hold their respective undivided tenancy in common interests in the Property (the "Interests") as tenants-in-common. The Co-Tenants do not intend by this Agreement to create a partnership or joint venture among themselves but merely to set forth the terms and conditions upon which each Co-Tenant shall hold their respective Interests. In addition, the Co-Tenants do not intend to create a partnership or joint venture with the manager as defined below. Therefore, each Party hereby elects to be excluded from the provisions of Subchapter K of Chapter 1 of the Internal Revenue Code of 1986, as amended (also referred to as the "Code"), with respect to the tenancy in common ownership of the Property. The exclusion elected by the Co-Tenants hereunder shall commence with the execution of this Agreement.
• Reporting as direct owners and not a partnership. Each Co-Tenant covenants and agrees to report on their respective federal and state income tax returns all items of income, deductions, and credits resulting from their Interests. Such reporting shall be consistent with the exclusion of the Co-Tenants from Subchapter K of Chapter 1 of the Code, commencing with the first taxable year following the execution of this Agreement. Furthermore, each Co-Tenant commits not to notify the commissioner of internal revenue (also referred to as the "Commissioner") of the desire that Subchapter K of Chapter 1 of the Code apply to the Co-Tenants.

• No agency. No Co-Tenant is authorized to act as agent for, to act on behalf of, or to do any act that will bind any other tenant or incur any obligations with respect to the Property.

INCOME AND LIABILITIES. Except as otherwise provided herein and in the Management Agreement, each Party shall be entitled to all benefits and obligations of ownership of the Property. Accordingly, the Co-Tenants shall receive all ownership benefits of the Property, on a gross basis, including income, revenue, and proceeds from the sale, refinance, or condemnation of the Property, in proportion to their respective Interests. The Co-Tenant shall bear and shall be liable for all ownership expenses of the Property on a gross basis, including all operating costs and expenses of sale, refinancing, or condemnation proportionate to their Interests. Exceptions are amounts as may be reasonably determined by the Co-Tenants or by the manager, to the extent that the manager has the authority to make such a determination under the Management Agreement, to be retained for reserves or improvements following the Management Agreement or the applicable budget for the Property.

Co-Tenants' obligations. The Co-Tenants agree to perform such acts as may be reasonably necessary to carry out the terms and conditions of this Agreement, including, without limitation:

• Documents. Executing documents related to the acquisition, financing, sale, or refinancing of the Property approved by the Co-Tenants in accordance with this  Agreement and signing additional documents as may be required under this Agreement or may be reasonably necessary to implement the Co-tenant's intention concerning the Property, the Management Agreement or any loans encumbering the Property.
• Additional funds. Each Co-Tenant will be responsible for a pro rata share based on the respective Interests of future cash needed for any purpose related to the ownership, operation, and maintenance of the Property as determined by the Co-Tenants, including under any budget applicable to the Co-Tenants, or by the manager (and approved by the Co-Tenants) according to the Management Agreement or as required by any loan secured by the Property. 

TRANSFER OF INTEREST. Each Co-Tenant acknowledges the transferability of their ownership interest in the Property as outlined in this section. The Co-Tenant may transfer, sell, or assign the Co-Tenant's interest, in whole or in part, to a third party (the "Transferee"), subject to the terms and conditions of this Agreement.

Before making any transfer of ownership Interest, the transferring Co-Tenant shall notify the other Co-Tenant in writing of the details of the intended transfer, including the identity of the Transferee and the percentage or fraction of the ownership interest to be transferred. Unless the other Co-Tenant exercises a right of first refusal to acquire the transferor's interest on the same terms and conditions as those proposed by the Transferee, the transfer shall be subject to the unanimous consent of all other Co-Tenant.

Upon the Effective Date of the transfer, the Transferee shall become the Co-Tenant and shall be bound by all the terms and conditions of this Agreement.

TERM AND TERMINATION OF THE AGREEMENT. The Agreement shall be effective as of the Effective Date and shall remain valid until terminated under the provisions outlined below or by mutual written agreement of the Parties.

Either Party may terminate this Agreement without cause upon providing   days prior written notice. This Agreement may be terminated immediately for cause if either Party fails to perform under the terms of this Agreement. In addition, either Party may terminate this Agreement immediately upon written notice to the other Party if the other Party becomes insolvent or files for bankruptcy.

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The Agreement may be terminated by operation of law, court order, or other circumstances recognized by applicable legal provisions. 

NOTICE. Any notice, request, demand, or other communication required under this  Agreement shall be sufficiently given if delivered personally or by certified mail, return receipt requested, to the address set forth in the opening paragraph or to such other address as one Party may have furnished to the other Party in writing, or to emails set forth below:

If to the Tenant 1:  .

If to the Tenant 2:  .

GOVERNING LAW AND DISPUTE RESOLUTION. This Agreement shall be governed by and interpreted in accordance with the laws of the State of  .

In case of any dispute, controversy, or claim resulting from or related to this Agreement, including its interpretation, performance, breach, termination, or validity, the Parties agree to initially seek amicable resolution through negotiations and mediation. If negotiations and mediation fail to result in a settlement, any outstanding dispute shall be finally resolved by arbitration following the legislation provisions. The arbitrator's decision shall be binding and enforceable in a court of competent jurisdiction. The Parties acknowledge their understanding of this section and agree to abide by its terms.

SEVERABILITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

ASSIGNMENT. Neither Party may assign or transfer this Agreement without obtaining prior written consent of the non-assigning Party, which approval shall not be unreasonably withheld.

ENTIRE AGREEMENT. This Agreement constitutes the entire understanding between the Parties and supersedes any prior oral or written agreements.

WAIVER. The failure of any Party to enforce a particular provision of this Agreement shall not constitute a waiver of their right to enforce that provision in the future.

ANNEXES. Any annexes, appendices, schedules, and exhibits to this Agreement are considered its integral parts. In case of any inconsistencies between the provisions of the main body of this Agreement and its Annexes, the provisions of the main body of this Agreement shall prevail.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

ANNEX A

to the Tenants in Common Agreement dated  

Description of the Property

 .

ANNEX B

to the Tenants in Common Agreement dated  

Interest division

 .