Tenant in common

Furthermore, under the loan documents, each tenant in common should be treated separately in terms of representations, covenants and other guaranties, as appropriate.

In order to deal with the bankruptcy risk inherent in a transaction with multiple borrowers, rating agency guidelines provide that (i) each borrower/tenant should be a bankruptcy remote special purpose entity, and (ii) non-consolidation opinions should be provided for each tenant in common. However some investors may hold interests in entities, which may not have sufficient flexibility to convert into an SPE.

One thing a lender can do is obtain a recourse carveback guaranty from a creditworthy guarantor and make certain that such guaranty covers any bankruptcy filing, in addition to covering other steps which may be taken by a tenant in common to prevent enforcement of the loan documents.

A TIC is an estate in real property under which each tenant in common has an individual possessory right in the entire property.

* Each co-owner must hold title to the property, directly or through a disregarded entity, as a tenant in common under local law.

The tenant in common who wants the cash has a couple of options.

Another option is that the partner or tenant in common who wants cash can have his interest purchased by the other partners or tenants in common prior to the like-kind property exchange.