What Is A TIC In San Francisco?

Heard friends talk about buying a TIC and wondered if it’s your path into San Francisco homeownership? You’re not alone. TICs can open doors at lower price points, but they come with unique rules, financing, and governance that you need to understand before you write an offer. In this guide, you’ll learn what a TIC is, how it compares to condos and co‑ops, the financing and title basics, key risks, and the exact documents to request so you can move forward with clarity. Let’s dive in.

TIC basics in San Francisco

A tenancy‑in‑common, or TIC, is a way for two or more people to own a property together. You own a fractional, undivided interest in the entire building or parcel, not a separate parcel for your unit. In practice, you and the other owners sign agreements that give each person the exclusive right to live in a specific unit.

In San Francisco, many TICs are in older multi‑unit Victorian or Edwardian buildings that were never converted to condos. The structure can be an affordable entry point compared with nearby condominiums, but the legal and financial setup matters as much as the floor plan.

TIC vs condo vs co‑op

Understanding how a TIC differs from other ownership types helps you compare options with confidence.

• Condominium: You own your unit as a separate parcel plus a shared interest in common areas. Each unit can be financed and sold on its own in the typical way.
• Co‑op: A corporation owns the building. You own shares in the corporation and hold a proprietary lease for your unit. Co‑ops are governed by corporate bylaws and often board approvals.
• TIC: You own a percentage interest in the whole property. Your right to occupy a particular unit comes from the TIC agreement and related documents, not from separate title to the unit.

How occupancy rights work

Your exclusive right to live in your unit is created by contract. The occupancy agreement or proprietary lease describes your unit, access, and policies like subletting. Because title is fractional, the quality of the paperwork defines your day‑to‑day rights.

If any unit is tenant‑occupied, San Francisco’s rent and eviction rules apply. Confirm that building practices and documents align with local ordinances. For tenant‑occupied properties, plan to consult an attorney or the San Francisco Rent Board before moving ahead.

Governance and the key documents

TICs function a lot like small HOAs. Read every document and make sure what you’re buying matches what you think you’re buying.

• TIC Agreement: The core governing document. It allocates ownership percentages, voting rules, maintenance obligations, assessments, sale procedures, transfer restrictions, default remedies, and any condo conversion provisions.
• Occupancy Agreement or Proprietary Lease: Grants your exclusive right to a specific unit and sets policies for access and use.
• Recorded Memorandum or Declaration: Puts the world on notice that a TIC exists. Full agreements may or may not be recorded.
• Budgets, Reserves, and Minutes: Show how the building is managed, whether reserves exist, and whether disputes are recurring.
• Insurance Policies: Confirm master building coverage and what you must carry personally.
• Title Report or Commitment: Surfaces liens, easements, and how the TIC is recorded.

Pay close attention to voting. Many TICs allocate votes by ownership percentage and require supermajorities for big decisions like selling the building or converting to condos. Also review any right of first refusal, consent rules, or pre‑emption procedures that could affect your ability to sell later.

Financing a TIC

TIC loans work differently from standard condo or single‑family loans. Availability can vary by lender and market cycle, so contact a lender experienced with San Francisco TICs early.

What to expect:

• Stricter requirements: Many lenders require larger down payments, higher credit scores, documentation of the TIC agreement, and review of building financials.
• Occupancy limits: Some lenders set minimum owner‑occupancy levels and limit how many units in the building they will finance separately.
• Loan structure: You may receive a fractional interest mortgage secured by your ownership percentage. Lenders often require protections in the TIC agreement, such as cross‑default language and remedies for delinquencies.

Action item: Get pre‑approved by a lender who underwrites TICs and ask for written guidance on any required provisions. Share that guidance with your agent and attorney before you make an offer.

Title, insurance, and taxes

Because TIC owners share an undivided title, underwriters look closely at the documents.

• Title insurance: Often available when the TIC paperwork is properly structured and recorded. Expect exceptions or endorsements tailored to the building and agreements. Always request an owner’s title policy commitment and review the exceptions.
• Building and personal insurance: Many TICs carry a master property policy. You may also need personal coverage for contents, liability, and loss of use. Clarify who covers earthquake risk, how deductibles are allocated, and whether any unit rentals require loss‑of‑rental coverage.
• Property taxes: Your tax burden is tied to assessed value and your ownership share. Transfers of interests can trigger reassessment under California law depending on the facts. Speak with a tax professional or the San Francisco County Assessor about Prop 13 and reassessment risk before you close.

Condo conversion in San Francisco

Some TIC groups eventually convert to condominiums. Conversion can increase flexibility and resale potential, but it is not guaranteed. In San Francisco, conversion requires legal, planning, and code steps and can be time‑consuming and costly. Tenant‑occupied units trigger additional rules and protections.

If conversion potential matters to you, find out:

• Whether the TIC agreement discusses conversion and required voting thresholds.
• Whether the building’s physical systems and code status support a future conversion plan.
• How tenant occupancy, if any, would affect timelines and feasibility.

Consult experienced legal and planning professionals before relying on conversion in your financial assumptions.

Who a TIC tends to fit

A TIC can be a smart move if you:

• Want a lower entry price in a central SF neighborhood compared with nearby condos.
• Are comfortable with shared decision‑making and building governance.
• Plan to occupy the unit and hold for a longer term to offset potential resale complexity.

Investors should proceed with caution. Financing and resale of TIC interests can be more challenging than condos, and tenant protections can affect rental strategies.

Benefits and tradeoffs to weigh

Common benefits:

• Often lower purchase prices than comparable condos in the area.
• Access to classic SF buildings that have not been converted to condos.
• A potential path to condo conversion if the group agrees, though outcomes vary.

Common tradeoffs:

• Financing friction: Fewer lenders, larger down payments, and stricter underwriting can slow deals.
• Resale complexity: Consent rules, rights of first refusal, and a smaller buyer pool familiar with TICs can affect time on market and pricing.
• Co‑owner risk: A delinquent or litigious co‑owner can impact the building and your investment. Remedies exist but can be complex.
• Governance deadlocks: Supermajority requirements can stall repairs or conversion plans.
• Title and insurance gaps: Poorly drafted or unrecorded documents can limit insurability and create risk.

Red flags to watch

Spot these issues early to save time and stress:

• Vague or unrecorded TIC agreement with unclear occupancy or default provisions.
• Thin reserves, inconsistent budgets, or frequent special assessments.
• Patterns of disputes in meeting minutes or evidence of litigation and liens.
• Restrictive transfer rules or complicated right‑of‑first‑refusal procedures.
• Lapsed or inadequate master insurance or unclear deductible policies.
• Significant deferred maintenance or needed seismic, plumbing, or electrical upgrades without a plan.

Buyer checklist before you write an offer

Request and review these items with your agent and attorney:

• Full title report and preliminary title insurance commitment.
• Complete TIC agreement and all occupancy or proprietary lease documents for your unit.
• Operating budget, recent financials, and any reserve study, plus minutes for the last 2 to 3 years.
• Master insurance certificates and requirements for individual coverage.
• Records of liens, code violations, permits, and any pending litigation.
• Seller disclosures, pest and inspection reports, and any structural or seismic evaluations.
• Evidence of prior right‑of‑first‑refusal notices and a current roster of owners and ownership percentages.
• Pre‑approval from a lender experienced with San Francisco TICs that lists any TIC‑specific conditions.
• Legal review by an attorney who regularly handles SF TICs.

Practical next steps

1. Talk to a TIC‑savvy lender early. Get pre‑approved and obtain written guidance on required TIC provisions.
2. Secure the full TIC agreement and occupancy documents before making an offer. Do not rely on summaries.
3. Order a full title commitment and review exceptions with counsel and a title company that knows TICs.
4. Schedule detailed inspections and review San Francisco Department of Building Inspection records for permits and retrofit needs.
5. Analyze building financials and meeting minutes for delinquencies, upcoming projects, or disputes.
6. Consult a real estate attorney and a tax professional about reassessment, exit strategies, and any conversion goals.
7. If conversion upside matters, get a feasibility read from a local condo conversion specialist.

Work with a local advocate

A well‑structured TIC can be a smart path to owning in San Francisco, especially when you balance the entry price with the added complexity. With the right team, you can evaluate documents, align financing, and negotiate protections that support your long‑term plan. If you are considering a TIC or comparing it to a condo, connect with a local expert who will guide you step by step and coordinate the right lenders, attorneys, and inspectors.

If you’re ready to explore TIC options or want a clear plan for due diligence, reach out to Aviva Kamler for tailored guidance rooted in deep San Francisco experience.

FAQs

What does “TIC” mean in San Francisco real estate?

• A TIC is fractional ownership of an entire property with a contract that gives you exclusive rights to occupy a specific unit.

How is a TIC different from a condo when buying?

• A condo gives you separate title to your unit, while a TIC gives you a percentage of the whole property and contractual rights to a unit.

Can you get a mortgage for a TIC in San Francisco?

• Yes, but you need a lender experienced with TICs, and requirements are often stricter with larger down payments and extra document reviews.

What documents should you review before a TIC offer?

• The full TIC agreement, occupancy agreement, title commitment, building budgets and reserves, minutes, insurance policies, disclosures, and inspection reports.

Can a TIC convert to condos in San Francisco?

• It can be possible, but conversion requires legal, planning, and code steps and can be expensive and time‑consuming, especially with tenant‑occupied units.