Before you can appreciate the benefits of tenants-in-common for 1031 exchange properties, it is essential for you to understand what a tenants-in-common or TIC property actually is.  TIC is basically the alternative to having the sole ownership of a real estate property so you will be able to have an investment at a fractional ownership of the said property.  The concept behind TIC is that it will enable the average investor to participate in the investment on an institutional real estate with minimum investments.
Each of the co-owners of a tenant-in-common property will enjoy the same rights to the property as if he were the sole owner.  In addition, these investors will each have the deed to the property so there is security and stability in acquiring a property.  You will be able to experience the convenience of having a stable income from your investment and appreciation of the real estate property without worrying about its management.  So how does the TIC exchange real estate property fit into this concept?
When an investor wants to complete a 1031 exchange to take advantage of its benefits but he wants to avoid all the burdensome management that comes with acquiring another property, the TIC 1031 may be the solution for him.  The TIC 1031 exchange will enable the investor to have a commercial property with professional management along with several other investors.  Tenant-in-common in this case is akin to having a holding title to a real estate property with undivided interest.  And if the TIC exchange real estate property is properly structured to fit the requirements of the 1031 provision, you can expect to derive its tax-deferred benefits to these kinds of transactions.  But there are several aspects in the TIC structures that you need to be aware of.  Some of these include the following:
The Special purpose entity or SPE
One of the things you will notice in the tenant-in-common structure is that there are no individual investors that will be listed as the owner of a property.  This is because of the Special purpose entity that they had to form in order own the property; the investors can do this through forming a limited liability company to get the TIC interest.  There are several advantages investors can expect from the SPE, including liability protection for each of the investors.
Tenant-in-common agreement
This agreement is just the agreement that is formed among all the individual investors in a real estate property.  All the rights and duties of each of these owners will be covered in this agreement and they have to strictly follow the things they had agreed on.
The master lease
The master lesser will act as the landlord of the property.   He will be the one to manage this property and he will be the one to pay the individual tenants-in-common their share of the holdings annually.  Usually though, the “rent” will already have been fixed in the agreement but it is possible that this income will increase annually.