Every shared home lives inside a legal container, and the container decides almost everything that matters later: how you finance, how you exit, what happens when a co-owner dies, divorces, or simply stops paying. Buyers spend weeks comparing kitchens and minutes comparing structures. This guide reverses the ratio.
Tenancy in common: names on the deed
In a tenancy in common, or TIC, every co-owner holds an undivided fractional interest in the property and appears on the deed itself. There is no company in the middle. Ownership percentages can be unequal, shares pass through each owner’s estate, and each owner can generally sell or mortgage their interest. The structure is simple and ancient, and its simplicity is also its hazard. By default, any tenant in common can file a partition action asking a court to force the sale of the whole property. Unmanaged, a TIC is a house with an ejection seat under every chair.
The fix is a written TIC agreement in which the owners waive or restrict partition, define usage rights, assign costs, set decision rules, and create an orderly buyout process. With a strong agreement, a TIC is a perfectly good home for a small group, and it has one practical advantage: because each owner is on title, individual owners can sometimes obtain their own financing secured by their own interest, and each owner separately claims their share of property tax and mortgage interest deductions.
The LLC: a company owns the house
In the LLC model, a limited liability company holds title, and the co-owners hold membership interests in the company. This is the structure the major platforms use, typically one property-specific LLC per home. The operating agreement becomes the constitution: usage, fees, governance, transfer restrictions, buyouts, all of it lives in one document. Liability is contained, membership interests transfer without touching the deed, and adding or removing an owner is a paperwork exercise rather than a title event.
The tradeoffs are financing and taxes. Conventional residential lenders generally will not lend to an LLC owned by a group of unrelated members, which is why platform shares are often bought with cash or platform-arranged financing, and why self-assembled LLC groups usually pool the down payment and pursue business-purpose lending, such as a DSCR loan underwritten on the property’s rental income rather than any member’s personal tax returns. Tax treatment also runs through the entity, so the group needs bookkeeping discipline and, usually, a partnership return. None of this is disqualifying. It simply means the LLC rewards groups that intend to operate like the small enterprise they have created.
Timeshares, residence clubs, and the rest of the zoo
The vocabulary beyond one-off fractionals is famously inconsistent, but the shapes are recognizable. A timeshare divides a resort unit among dozens of owners with a week or two each, priced as prepaid vacationing rather than as an asset. A private residence club is a luxury fractional across a portfolio of residences, often hotel-branded, with heavy services and dues to match. Destination clubs sell access rather than equity. And a condo hotel is something else entirely: whole ownership of a single hotel room. If the pitch emphasizes points, exchange networks, and lifestyle, you are in the usage business. If it emphasizes deeds, appraisals, and resale, you are in the real estate business. Know which building you are standing in.
Signals that point to each
Choose a TIC when the group is small, the state’s TIC practice is well developed, owners want individual title and individual tax treatment, and everyone will sign a serious agreement before closing. Choose an LLC when the group values clean transfers and liability protection, expects rental income, plans to finance through business-purpose lending, or simply wants the structure the platforms have already normalized. Choose a platform share when you want the container built, furnished, and managed by professionals and are willing to pay for it. And choose a timeshare only when you have honestly concluded you are buying vacations, not property.
Whatever the container, the document inside it decides your experience. That document is the subject of our guide to buying with friends and family, and the reason we are assembling a starter kit of real co-ownership agreements for readers of this library.
This guide is educational and is not legal or tax advice. Entity choice has state-specific legal and tax consequences. Engage an attorney and CPA experienced in shared vacation property before choosing a structure.