What Is A TIC In San Francisco?

Eyeing a charming Mission Dolores flat and seeing “TIC” in the listing? You are not alone. Many first-time urban buyers have questions about how tenancy in common works in San Francisco and how it compares to a condo. In this guide, you will learn what a TIC is, how it functions in Mission Dolores, what to expect with financing and monthly costs, how resale works, and the due diligence steps that help you buy with confidence. Let’s dive in.

What a TIC means in SF

A tenancy in common, or TIC, is a way for two or more people to co-own the same property. Each buyer owns an undivided fractional interest in the whole building, such as 25 percent of a four-unit property. You typically live in a specific unit under a private TIC agreement, even though your deed reflects shared ownership of the entire property.

With a condo, you hold separate title to a specific unit plus a share of the common elements recorded on a condominium plan. With a TIC, you hold a percentage of the whole property. Your rights to occupy a unit and your obligations are defined by the TIC agreement rather than a condo declaration.

How TICs differ from condos

• Title: Condo owners have separate unit deeds. TIC owners hold undivided fractional interests in the entire parcel.
• Governance: Condos rely on recorded CC&Rs and an HOA. TICs rely on a private agreement among co-owners that functions like an HOA by contract.
• Financing and resale: TIC loans follow different rules. Options can be more limited than for condos, which can affect liquidity and timing when you sell.

Where TICs show up in Mission Dolores

San Francisco’s TIC market grew as a way to sell units in older multi-unit buildings without a condo conversion. Mission Dolores has many buildings that fit this pattern, including small 2 to 4 unit properties, multi-story flats, and converted single-family homes. These buildings often share entries, stairs, roofs, and utilities, and many were built before modern condo development.

Why buyers choose TICs here:

• Price and access: TICs have historically offered a more attainable path to own in high-demand areas with limited condo supply.
• Control and community: A strong TIC agreement can offer clear rules and direct input on building decisions.
• Character and preservation: TICs often keep the original character of older buildings.

Financing a TIC

Financing a TIC is different from financing a condo. Lenders review ownership structure, documents, and building finances in detail. Expect a more specialized process and start your financing plan early.

Common TIC loan structures:

• Individual TIC loans that secure only your fractional interest. This is the more common product today.
• Blanket or master mortgages that cover the whole building with all owners as co-borrowers. This can create cross-liability risk among owners.

What to expect with underwriting:

• Higher down payments and stronger cash reserves are common compared with condo loans.
• Lenders often require owner-occupancy and will review the TIC agreement for rights and remedies.
• Lenders assess the TIC’s budget, reserves, and any delinquencies.
• Rates and fees can be higher than standard condo loans depending on the lender and structure.

Government-backed loans like FHA, VA, and USDA are usually not a fit for most TICs unless the property is a recorded condominium or the program expressly allows the structure. Confirm eligibility very early.

Insurance, taxes, and monthly costs

Most TICs carry a master insurance policy that covers the structure and common areas. You will also need your own policy to cover personal property, interior improvements, and loss of use. Your lender will specify minimums for hazard and liability coverage.

Understand cross-liability. If a TIC uses a blanket mortgage, owners can be jointly liable if someone defaults. Many buyers prefer individual TIC loans to reduce this risk, but you should verify what is in place.

Property taxes are assessed on the whole parcel. Your share is allocated by the TIC agreement. Monthly costs usually include your mortgage, your share of common expenses like maintenance and insurance, your unit’s utilities as allocated, and reserve contributions. Because many buildings are older, healthy reserves matter. Underfunded reserves can lead to special assessments.

Buying and resale in Mission Dolores

TICs have often sold at a discount to comparable condos due to financing hurdles and perceived liquidity. In neighborhoods with limited condo inventory, demand can still be strong. Resale speed hinges on the clarity of the TIC documents, building condition, lender familiarity, and whether any blanket loans or unusual encumbrances exist.

If you plan to sell in the future, review the TIC agreement for transfer rules. Some agreements include rights of first refusal or approvals for new buyers, which can add time to the process.

Converting a TIC to a condo

Conversion is possible but it requires legal work, municipal compliance, and coordination among all owners. Expect items like drafting a condominium plan, meeting code and habitability standards, and recording the map and declaration. Costs can include legal, architectural, and potential utility separation. Conversion can broaden financing options and marketability, but it is not fast or inexpensive. San Francisco has specific rules and steps, so plan on consulting a local attorney and the relevant city departments.

Due diligence checklist

Before you make an offer or remove contingencies, gather and review:

• TIC agreement and amendments: voting rules, assessments, transfer, default remedies.
• Title report and deeds: look for blanket mortgages, liens, easements, and permit history.
• Financials: operating budget, year-to-date statements, any reserve study, and special assessments.
• Insurance declarations: master policy limits, deductibles, and covered perils.
• Meeting minutes and disclosures: any litigation, code violations, or major projects.
• Inspections: general home inspection, pest inspection, and in SF, attention to seismic or soft-story issues if applicable.
• Vendor contracts: management, maintenance, pest control, and other recurring services.
• Mortgage status: confirm if any loans encumber the whole property and that owners are current.

Recommended contingencies:

• Financing contingency that specifies an experienced TIC lender.
• Attorney review of all TIC documents and title matters.
• Disclosures about any condo conversion plans or options.
• Insurance and reserves review contingency.

Red flags to avoid

• No professionally drafted TIC agreement or vague rules around voting, assessments, or remedies.
• Thin reserves or frequent special assessments.
• Existing blanket mortgages that complicate individual financing or resale.
• Ongoing litigation, open code violations, or unresolved permits.
• Sellers who resist normal inspections, financial disclosure, or lender review.

Pros and cons at a glance

Pros:

• Entry point to own in Mission Dolores at price points that can be more attainable than condos.
• Often smaller associations with potentially lower common charges than large condo HOAs.
• Governance that can be tailored by owners through the TIC agreement.

Cons:

• Financing is more complex and may require higher down payments and reserves.
• Resale can be less liquid than condos and may take longer.
• Co-owner interdependence, especially with blanket loans or unclear agreements.
• Potential future costs for building maintenance or conversion.

Smart next steps in Mission Dolores

• Get prequalified early with a lender that has documented experience with TIC loans in San Francisco.
• Hire a real estate attorney who regularly reviews TIC agreements, title issues, and conversions in SF.
• Order thorough inspections, including pest and any applicable seismic assessments.
• Request the full TIC package early in escrow and take time to review it.
• Budget for upfront costs like a larger down payment, reserves, and insurance.

If you want a clear, step-by-step plan to compare a Mission Dolores TIC to a condo, reach out. You will get local guidance grounded in neighborhood insight and a process that keeps you informed from search to closing. Let’s talk through your goals and timeline with Janeen Anderson.

FAQs

Can you use FHA or VA for a TIC in San Francisco?

• Generally no, since these programs are designed for traditional condos or single-family structures unless the program specifically allows TICs or the property is a recorded condominium.

Do TIC owners have to live in their unit?

• It depends on the TIC agreement, since some require owner-occupancy while others allow rentals, and lenders may prefer owner-occupied buildings.

Are TICs taxed differently than condos in San Francisco?

• No, property taxes are assessed on the parcel and each owner’s share is allocated by the TIC agreement rather than a separate tax category.

Can one TIC owner force a sale of the entire building?

• Your remedies depend on the TIC agreement; legal partition is a last-resort option that is costly and disruptive, so review buyout and sale provisions closely.

Will converting a TIC to a condo improve resale options?

• Often yes, conversion can broaden financing options and buyer demand, but it requires unanimous cooperation, city compliance, and meaningful expense and time.