What Is a TIC in San Francisco? How Ownership Works

Heard people talk about TICs in San Francisco and wondered if they’re just condos by another name? You’re not alone. TICs can offer a lower entry price into great neighborhoods, but they come with unique rules, financing, and risks that you should understand before moving forward. In this guide, you’ll learn what a TIC is, how ownership and financing work, what to watch for in San Francisco, and the smart steps to take if you plan to buy or sell. Let’s dive in.

TIC basics

A Tenancy in Common (TIC) is shared ownership of one property by two or more people. You own a percentage interest in the entire building, not a separate legal condo unit. Your deed shows your fractional share, and your rights and responsibilities are defined by a private contract called the TIC agreement.

In San Francisco, TICs are common in older multi-unit buildings, especially classic flats. If you buy a TIC, you buy a percentage of the whole property and agree to cooperate with co-owners under the terms of the TIC agreement.

How ownership works

Your deed reflects an undivided percentage interest in the property, not a specific unit. Exclusive use of a particular apartment is set by the TIC agreement, which outlines who lives where and how common areas are shared.

The TIC agreement functions like an HOA rulebook. It usually covers budgets and monthly assessments, maintenance duties, voting rules, transfer and leasing restrictions, dispute resolution, insurance obligations, and any plans for condominium conversion.

Governance and decisions

Most agreements set voting thresholds for major actions. Routine decisions may pass by a simple majority, while big items like capital improvements, refinancing, or condo conversion often require supermajority or unanimous approval.

Day-to-day, a TIC group manages a budget, collects assessments, funds reserves, and handles maintenance. Because TICs are contract based rather than governed by condo statutes, enforcement depends on what the agreement says and how well co-owners cooperate.

Financing a TIC

Financing exists for TICs, but the pool of lenders is smaller and the terms are often more conservative than for condos. Many buyers see higher down payment requirements, tighter debt-to-income guidelines, and stronger reserve expectations.

Two financing setups are common:

Individual mortgages. Each co-owner gets a separate loan secured by their fractional interest. The lender underwrites you and the property details that affect your share.
Master or blanket mortgage. One loan covers the entire building. This creates shared risk. If any borrower tied to the master loan defaults, the whole property can be at risk of foreclosure.

Government-backed programs like FHA or VA may have stricter criteria for TICs. Eligibility depends on project structure and current program rules, which can change. Confirm the latest requirements with a lender experienced in San Francisco TICs.

Master loan red flags

If a master loan exists, understand the lender’s transfer approval process, the default consequences, and whether the seller will pay off or refinance the master loan at closing. Some sellers may offer carryback or special financing, which you should review closely.

Insurance basics

Most TICs carry a master building policy for hazard and liability. As an owner, you’ll usually add an individual policy similar to an HO-6 to cover your personal property, interior improvements, loss of use, and loss assessments.

Review coverage amounts, named insureds, deductibles, and any coinsurance clauses or exclusions. You want to avoid surprise assessments for gaps in coverage if a claim arises.

Local rules to know

San Francisco’s TIC market is well established, especially in older buildings. While TICs represent a smaller share of the overall market than condos, they continue to appeal to buyers seeking a lower entry price point with access to central neighborhoods.

Condominium conversion

Converting a TIC to condos can improve marketability and financing options. Conversion is a legal subdivision process with city review, recorded plans, and potential tenant protections and relocation requirements when tenants are involved. Most TIC agreements require high owner-approval thresholds to pursue conversion. For sellers, conversion can increase value and expand the buyer pool. For buyers, a credible path to near-term conversion can be attractive, but you should verify the likelihood and terms in writing.

Rent control and tenants

If a unit is tenant-occupied, San Francisco rent control and eviction protections may apply depending on the building’s age and the tenancy. Buyers inherit existing tenant rights and obligations, including rent levels if protected. Confirm the status of any occupants and how their rights affect your plans for occupancy or conversion.

Disclosures and title

Sellers must disclose the TIC structure and provide the TIC agreement, budgets and financials, insurance policies, master loan documents, and any notices or litigation. Review the title report for liens, judgments, or a master mortgage. Some fractional transfers can trigger property tax reassessment, so plan to consult the Assessor or a tax advisor on your specific situation.

Risks to consider

Every ownership type carries trade-offs. With TICs, the most common risks include:

Shared loan exposure. A master mortgage can put all owners at risk if any borrower defaults.
Liquidity and financing limits. Some buyers avoid TICs due to financing complexity, which can affect resale.
Owner disputes. Repairs, budgets, rentals, or sale decisions can cause conflict without a strong agreement and clear processes.
Conversion uncertainty. If condo conversion matters to you, confirm the path, timing, and approval requirements.
Special assessments. Low reserves or unforeseen repairs may result in large assessments.

Who a TIC may fit

A TIC can be a smart fit if you want a lower entry price than a comparable condo and you are comfortable with shared governance. It also suits buyers who value classic buildings and are willing to participate in group decision-making.

If you need the widest lender options, very simple governance, or you want maximum resale liquidity, a condo or single-family home may be a better fit.

Smart due diligence checklist

Before you write an offer or remove contingencies, request and review:

The recorded deed form for your fractional interest.
The full TIC agreement and all amendments.
Budget, financial statements, any reserve study, and assessment history.
Master or blanket loan details and payoff or refinance plans, if any.
Master insurance policy and recommended individual coverage.
Minutes of recent TIC meetings, plus any pending litigation, code violations, or city notices.
Full inspection reports: general, pest, plumbing, electrical, roof, and structural.
Title report and any liens or encumbrances.
Rent roll and tenant leases if any unit is occupied.
Prior or planned condo conversion steps and timelines.
Consultations with a TIC-savvy real estate attorney, a lender experienced with TICs, and a title company.

How to buy a TIC in SF

Clarify goals. Decide if you prioritize price, conversion potential, or long-term hold.
Get pre-approved with a TIC lender. Ask about individual vs master loan structures, down payment, and reserves.
Review the TIC agreement early. Confirm occupancy rights, transfer rules, voting thresholds, leasing limits, and dispute processes.
Underwrite the building. Study budgets, reserves, and likely capital needs within 3 to 5 years.
Inspect thoroughly. Older buildings can hide expensive surprises in systems and structure.
Plan exit strategy. Understand resale dynamics for TICs in your price range and neighborhood.

Selling a TIC: tips

Educate buyers. Provide a clean, complete disclosure package that explains the TIC structure in plain language.
Address financing barriers. If a master loan exists, consider paying it off or arranging a path to split financing to widen your buyer pool.
Showcase governance strength. Highlight a well-drafted TIC agreement, adequate reserves, and a track record of smooth operations.
Clarify conversion story. If conversion is possible, lay out the concrete steps, timelines, and approvals required.

Your next step

A TIC can be a smart path into San Francisco homeownership when you understand the structure, confirm financing, and do disciplined due diligence. Whether you are buying or selling, clarity on the agreement, loan setup, reserves, and tenant status will help you move forward with confidence.

Have questions or want a clear plan for your situation? Connect with Unknown Company and Get More with RealWise on your TIC purchase or sale.

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