Financing the sale of a tenant in common (TIC) share in real estate.

Vendor Bonds can be used to finance the sale/purchase of a tenant in common share in real estate. 

Issue a Vendor Bond

What is a tenancy in common? Tenancy in common is a form of real estate ownership. It is distinct from the usual joint tenancy ownership that is commonly used in husband & wife situations. Joint tenancy property ownership carries a ‘right of survivorship’ where if one party dies the other automatically inherits the deceased interest in the property. Whereas tenancy in common ownership gives each co-owner of the property a separate and distinct share that can be willed (bequeathed), sold and mortgaged separately.

How is a tenancy in common created?: A tenancy in common is created when a property (or part of a property) is sold and is then owned by two or more persons in equal or unequal shares. Each co-owner’s interest is registered on title. For buyers the ticX platform means a purchaser no longer needs to buy the whole property. Shared ownership makes every property ‘affordable’.

Issuing a series of Bonds for small scale property development projects

Bonds can be used as a source of debt funding for small-scale property development. A Bond issuer may call the Bonds, Development Bonds; Property Bonds; Vendor Bonds or any other name that best suits the purpose of the Bond issue.

Issuing a series (or set) of Bonds can provide a way for incorporated property developers to raise debt funding.

Investors receive regular interest payments until the end of the bond term and receive their initial investment back at the end as well. Or, if convertible bonds, interest can be cumulative with principal and interest being converted to bricks & mortar at projects end.

Convertible Bonds: These are Bonds that are convertible into bricks & mortar at the discretion of the investors. Since the Bonds act as a debt instrument prior to conversion to equity, they can include an interest rate. However instead of paying out cash the Issuer will pay the investor(s) in real estate bricks & mortar, when the debt is converted.

The advantage of issuing convertible bonds is that, if the bonds are converted, the company’s debt vanishes. However, in exchange for the benefit of reduced interest and principal repayment, the value of the bond issuer’s equity in the property is reduced due to the watering down or dilution expected when bondholders convert their bonds into bricks & mortar.

Like any typical bond, convertible bonds have an issue size ($ amount), issue date, maturity date, face value and a coupon (interest) rate.

Issue a series of Bonds

For Home Owners, Builders, Renovators & Entrepreneurs

The advent of the Tenant in Common Exchange (ticX) means you can now:

  • Design, build or renovate (subject to Council approval) to create a dual-occupancy, multi-family or micro-apartment property that may not need to be strata titled to be sold to separate owners. (Subject to your local Council’s regulations)
  • Re-design the existing large 4- or 5-bedroom family home into two or more separate micro apartment living spaces to be sold to separate owners (or rented).

Home seekers can now buy an affordable ticX share in a property and occupy that space which reflects their share of ownership. Buyers of a fractional share are the legal owners of the asset and their interest is separately registered on title as a co-owner.

We believe many empty nesters would rather stay in their family home with all its memories but would like to downsize to occupy a smaller space. Renovating larger homes into dual occupancy can provide affordable housing for millennials and others as well as providing empty-nesters with much needed funding in retirement.

Selling tenant in common (TIC) ownership share in your ‘main residence’ (your home) would generally be exempt from capital gains tax (CGT).

Vendor financing a TIC share

Vendor finance provides an alternative way in which you can start owning and paying off a share in a property even if you have poor credit or employment history or you’re unable to qualify for a traditional loan from a bank.

The purchaser and vendor arrange the finance terms privately rather than through the banks, and the purchaser pays off the purchase price of the TIC share in the property via instalments to the vendor.

While these agreements are normally established over a 20-year term, the intention is to pay out the contract as soon as the purchaser is in a position to refinance the debt through a conventional bank home loan.

For any questions, or to sell an ownership share in your property, contact your local ticX Member Agent. See: