Tenancy in Common Explained: Lessons from a High-Profile Property Dispute

A recent, high-profile real estate sale in Arizona underscores a critical lesson for co-owners: without a formal agreement, a shared property investment can lead to complex legal and financial disputes. The resolution of a $1.5 million land sale involving the Brown family, known for the TV show "Sister Wives," highlights the inherent risks of tenancy in common, a common form of property ownership. This case demonstrates why clear, legally binding documentation is essential for any multi-party real estate transaction.

What is Tenancy in Common?

Tenancy in common is a form of property ownership where two or more individuals hold title to a single property. Each owner, known as a tenant in common, holds a separate and distinct share of the property, which can be unequal. These shares can be sold or transferred independently, and upon an owner's death, their share passes to their heirs, not automatically to the other owners. In the Arizona case, the owners held unequal percentages, with some owning 50% and others 25%, which is a typical structure for this arrangement. The primary risk, as seen here, is that disagreements between owners can complicate decisions about selling or dividing the property.

What Caused the Dispute Over the Land?

The dispute originated from the dissolution of the owners' personal relationships, which changed the original intent for the property. Initially purchased for $820,000 in 2018, the land was meant to be subdivided for four homes. When this plan fell apart, the financial interests of the parties were no longer aligned. Some owners sought a return on their investment, while others resisted an equal distribution of sale proceeds, citing unequal initial contributions. This highlights a common pitfall: vesting, the way owners' names are listed on the title, must reflect an agreed-upon financial arrangement. Without a separate contract, like a partnership agreement, the title alone may not protect each party's investment expectations.

How Was the Property Finally Sold?

The property, consisting of four parcels of varying sizes, was sold individually. According to property records, the sales in April 2025 broke down as follows:

The total sales price of $1.5 million resulted in a profit of approximately $680,000 over the 2018 purchase price. The sale was facilitated by transferring interests between the parties before listing, a process that often requires legal and title insurance assistance to ensure clean title for the new buyers.

What Can Co-owners Learn from This Situation?

This situation offers clear guidance for anyone considering a joint real estate purchase. Based on our experience assessment, the predictability of a successful partnership depends on formal planning.

• Create a Co-ownership Agreement: Before purchasing, draft a legal agreement that outlines each party's financial contribution, ownership percentage, and procedures for handling a buyout or sale. This document can prevent disputes if relationships or financial situations change.
• Understand Vesting Options: Consult with a real estate professional to choose the right vesting for your situation, whether it's tenancy in common, joint tenancy, or another entity like an LLC. Each has different implications for control and inheritance.
• Document Everything: All financial transactions, including one owner buying out another, should be formalized with a deed and recorded with the county assessor. Informal agreements, like one owner transferring a share for $10, can create legal ambiguities.

The core lesson is that a handshake deal is insufficient for a major asset like real estate. Formalizing the arrangement with legal documentation is the best way to protect your investment and avoid a lengthy, costly dispute.