Undivided Interest Law and Legal Definition

An undivided interest is defined as an identical fractional or percentage interest or share in each right, benefit, and obligation with respect to the subject matter of a contract. In real property law, an undivided interest refers to the interest in property owned by tenants whereby each tenant has an equal right to enjoy the entire property. For example, tenants in common own an undivided interest in the property, so if there are two tenants in common in an apartment, each owns a one-half interest in the apartment. In finance law, an undivided interest is a complete or partial ownership of all parts of a whole. For example, an undivided interest in a pool of loans means the ownership or rights to a certain percent of each and every loan in the pool.