Thinking about stretching your budget in San Francisco and keep hearing the term TIC? You are not alone. Tenancy in Common can open doors to neighborhoods and buildings that might otherwise be out of reach, but it comes with its own rules, financing quirks, and resale considerations. In this guide, you will learn what a TIC is, how it differs from a condo, how financing really works in San Francisco, and exactly what to review before you write an offer. Let’s dive in.
TIC basics in San Francisco
A Tenancy in Common is a form of co-ownership where two or more people hold undivided fractional interests in a single property. You own a share of the whole building rather than a separately titled unit. In San Francisco, that fractional interest is often paired with a written occupancy or right-to-use agreement that gives you exclusive use of one specific unit.
Many San Francisco TICs date back to the mid-20th century, with a large wave created in the 1970s through the 1990s as an alternative to condominium conversion. You will see TICs in 2 to 4 unit buildings and in mid-size buildings of 5 to 12 units across the city. Each co-owner holds a deeded share of the entire property plus a contractual right to occupy a particular unit.
TIC vs. condo differences
TICs and condos can look similar day to day, but the legal structure is very different. Understanding that difference helps you plan for financing, approvals, and future resale.
Title and ownership
- TIC: You receive a deed to an undivided fractional interest in the whole property. The deed does not convey a separate unit in fee simple.
- Condo: You hold fee-simple title to a defined unit plus an undivided interest in common areas through a homeowners association.
Governance and documents
- TIC: The arrangement is governed by private contracts among the owners. These include the TIC or sharing agreement, occupancy or license agreement, and rules for budgets, repairs, refinancing, and sales.
- Condo: The community is governed by recorded CC&Rs and bylaws under a formal HOA structure with statutory protections and elected directors.
Decision-making power
- TIC: Many major actions can require unanimous or supermajority approval under the TIC agreement. Refinancing, selling, or approving major repairs can stall if owners disagree.
- Condo: HOAs typically operate under statutory frameworks that allow more decisions by majority vote through a board.
Financing and resale
- TIC: Lenders view TICs as nonstandard. Financing options are more limited and require specialized underwriting. Resales can take longer and may involve more buyer education.
- Condo: Loans are more widely available and the resale market is clearer to most buyers and lenders.
Taxes and assessments
Both structures trigger property taxes, but reassessment rules after a transfer depend on local policies and the mechanics of the transfer. You should consult the San Francisco Assessor-Recorder and a tax advisor to understand how a specific deal will be treated.
Financing a TIC in SF
TICs often offer a lower entry price than a comparable condo in the same area. That said, financing realities can offset some of the savings. Plan for fewer lender options, a more detailed underwriting process, and potentially higher down payment requirements.
Not all mortgage lenders make TIC loans. You will want a lender or mortgage broker with direct TIC experience in San Francisco. Lenders will underwrite you as a borrower and also review the TIC documentation, insurance, and rules that govern how the co-ownership operates.
Down payment minimums for TIC loans are generally higher than standard condo loans. Exact percentages vary by lender, borrower profile, and the strength of the TIC documents. Interest rates may be modestly higher or require different products such as portfolio loans, and agency eligibility can depend on current guidelines.
Some risks are unique to TICs from a lender’s point of view. Because the property is a single legal asset, lenders review cross-default exposure, unit-specific foreclosure mechanics, and any provisions that require other owners to consent to a refinance or sale. These details can affect approval time and terms.
Public program financing such as FHA or VA has limited eligibility and specific requirements for TICs. Rules change, so you should confirm current program guidance with a TIC-experienced lender early in your search.
To save time, take these steps before you tour:
- Get prequalified with a lender that regularly funds TIC loans in San Francisco.
- Ask for a document checklist so you know what the bank will review.
- Discuss likely down payment ranges and rate scenarios so your budget is realistic.
Pros and cons
Understanding the trade-offs will help you decide if a TIC fits your goals and timeline.
Pros
- Lower purchase prices relative to comparable condos in many neighborhoods.
- You hold a deeded ownership interest in real property, not just a license to occupy.
- Access to building types and locations that may be unattainable as condos.
Cons
- Financing can be more complex, with fewer lender choices and likely higher down payment requirements.
- Governance can be challenging since major decisions may require multiple owners’ consent.
- Resales can take longer and may trade at a liquidity discount.
- Shared responsibility for maintenance and insurance. Earthquake coverage and reserves matter.
- Fewer statutory protections than a condo HOA, since TICs rely on private contracts.
Buyer due diligence checklist
Reviewing the right documents up front protects you from surprises later. Build these items into your offer contingencies and timeline.
- Recorded deeds and a current vesting that shows each owner’s fractional interest.
- Full TIC documents: tenancy-in-common agreement, occupancy or right-to-use agreement, bylaws or house rules, budget, reserve study if any, and rules for alterations, subletting, refinancing, and sale.
- Minutes or records of owner meetings, recent budgets, and financial statements. Confirm the existence and level of reserve funds and any planned capital projects.
- Insurance policies: building and general liability coverage, plus earthquake. Confirm who pays for what and the coverage limits.
- Preliminary title report and title insurance that address TIC specifics, including any easements, liens, or encumbrances.
- Lender eligibility: written prequalification from a lender that will finance the property under the current TIC documents.
- Legal review by a San Francisco real estate attorney with TIC experience. Ask them to flag unanimity requirements, refinance or sale restrictions, and buy-sell provisions.
- City compliance: review planning and building permits for past work, zoning compliance, and any open violations or litigation history.
- Exit mechanics: understand buyout options, transfer rules, and how the TIC handles an owner default or death.
Red flags to watch
- No financial statements or zero reserve funds.
- Unclear occupancy agreements or poorly drafted co-ownership documents.
- Lenders require multiple owners to sign a single loan or refuse to lend under current terms.
- Reliance on short-term rental income that may not be stable or allowed by local rules.
- Pending litigation involving the building or any owners.
Local context and resources
TIC inventory in San Francisco is relatively limited and varies by neighborhood and building type. Pricing often undercuts similar condos, but exact values depend on the building’s condition, location, and how strong and clear the TIC documentation is.
Local rules can affect condo conversion and rental regulations. While many TICs predate modern conversion laws, you should confirm compliance with the San Francisco Planning Department and the Department of Building Inspection. For tax and reassessment questions, consult the San Francisco Assessor-Recorder.
Assemble a local team that sees TICs regularly:
- San Francisco real estate attorney with TIC experience.
- Lender or mortgage broker who underwrites TIC loans in California.
- Title company experienced with TIC closings and title insurance for co-ownership.
- Insurance broker familiar with building and earthquake coverage for multi-owner properties.
- A local realtor who understands TIC pricing, documentation quality, and resale patterns.
Next steps for buyers
If a TIC seems like the right pathway, map out your move from prequalification to closing.
- Before you bid: secure prequalification with a TIC-experienced lender so you can write a confident offer.
- During contract: make full TIC documents, budgets, insurance certificates, and meeting records part of your disclosure review. Build in time for attorney review.
- Inspection and title: order thorough inspections, verify permits for past work, and review the preliminary title report. Confirm that lender and buyer title insurance address TIC specifics.
- Closing and after: confirm that insurance and reserve funding are set. If your loan has conditions tied to TIC documents, verify they are completed before funding.
When you want a clear-eyed assessment of a specific building or set of TIC documents, reach out. With local transaction experience and a design-and-permitting perspective, you can get a practical read on risk, value, and fit for your lifestyle or investment plan. Connect with Ryan Richard to request a tailored consultation and start your search with confidence.
FAQs
Are TICs legal and common in San Francisco?
- Yes. TICs are a recognized form of ownership in California and are an established part of the San Francisco housing market, especially in older multi-unit buildings.
Are TICs cheaper than condos in San Francisco?
- Often on purchase price, yes, but financing limits, higher down payments, and resale liquidity can offset some of the savings.
Can I get a mortgage for a TIC purchase?
- Yes, but you need a lender that makes TIC loans. Expect more documentation, potentially higher down payments, and fewer lender options.
What happens if another TIC owner defaults?
- The TIC agreement should spell out remedies such as assessments or forced sale mechanisms. A default by one owner can create complications for others, so you must review the documents closely.
Can a San Francisco TIC become condos later?
- Sometimes, but conversion requires legal, planning, and local approvals. It is not automatic and can be complex and costly.
