Mortgage Loan Originator (MLO) Licensing Practice Test

Tenants in common is a form of property co-ownership where each owner holds an individual, undivided interest in the property. One of the key features of this arrangement is that if one of the owners passes away, their share of the property does not go to the other co-owners, as would be the case with joint tenancy. Instead, the deceased owner's share automatically goes to their heirs or beneficiaries, as specified by their will or through intestate succession laws if there is no will. This transfer occurs regardless of the intentions or arrangements between the living co-owners.

The ability for property to pass to an heir in a tenants in common arrangement underlines its distinction from joint tenancy, which includes the right of survivorship. In joint tenancy, when one owner dies, their interest is automatically transferred to the surviving co-owner(s), leaving no share to pass through inheritance. Thus, the statement that tenants in common permits the property to pass to an heir is accurate and aligns with established property law principles.