Can an owner effectively protect him/herself from the financial risks of having tenant in common co-owners?
A popular way for apartment building owners to shield themselves from the financial risks of co-ownership is to carry all-inclusive “wraparound” financing for each tenancy in common buyer (discussed above). With this arrangement, the original owner continues to make all of the payments on any bank loan secured by the entire building, and the tenancy in common co-owners make payments to the original owner. If a tenancy in common co-owner does not make his/her payment, the original owner can foreclose using standard non-judicial foreclosure procedures (no court involvement). Non-judicial foreclosure is generally less risky than evicting a tenant in a rent-controlled city. Moreover, homeowner non-payments are extremely rare when compared with tenant non-payments, probably because a non-paying owner has a huge amount to lose. The newly available individual tenancy in common loans provide an even lower-risk financing option. With this arrangement, each tenancy in common buyer gets his/her o
