Tenants in Common refers to a form of property ownership where two or more individuals hold shares in a property. Unlike joint tenancy, where all owners have equal rights, tenants in common can hold unequal ownership percentages. So, calculating these percentages is essential for determining each person's share in the property. Read on and follow the steps to learn how to calculate tenants in common percentages.
Steps to Calculate Tenants in Common Percentages
Before that, you must understand the total value of the property. This could be the purchase price or the current market value, depending on what is being calculated. Tenants in common can hold varying ownership stakes based on how much each person contributed to the purchase of the property.
Let’s understand the calculation with an example. If Person A paid Rs40 lakh and Person B paid Rs60 lakh towards a property worth Rs1 crore, the percentages are based on these contributions.
Divide each owner’s contribution by the total property value and multiply by 100 to get the percentage:
Person A's share: (Rs40 lakh ÷ Rs1 crore) × 100 = 40%
Person B's share: (Rs60 lakh ÷ Rs1 crore) × 100 = 60%
Sometimes, the ownership may not directly reflect financial contributions but be influenced by legal agreements or family arrangements. In such cases, percentages are based on the agreed-upon values between the parties.
Each tenant in common can transfer or sell their share independently. The percentage of ownership determines their share of profits, rent, and liabilities, as well as inheritance. I hope you found the answer helpful.
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How to Calculate Tenants in Common Percentages?
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2024-09-24T20:27:09+00:00 2024-09-24T20:27:11+00:00Comment
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