Introduction to TICs: What Are Tenancy in Common Units?

Tenancy in Common (TIC) units have become an increasingly popular option for homebuyers, especially in high-demand urban markets like San Francisco. But what exactly is a TIC, and how does it differ from more familiar forms of ownership like condominiums or single-family homes? This section introduces the concept of TICs—how they work, why they exist, and the unique opportunities and challenges they present for buyers and owners.

At its core, a TIC is a form of ownership where two or more people share legal title to an entire property. Unlike condos, where each owner holds a deed to a particular unit, TIC owners each own a percentage undivided interest in the whole property. Typically, a TIC agreement designates the specific unit (such as an apartment or a portion of a house) that each co-owner can occupy exclusively, along with shared rights and responsibilities for common areas like hallways, garages, and gardens.

TICs are especially prevalent in cities where property prices are high. They offer a more accessible and affordable route into homeownership, with units often priced 10-20% below comparable condos. This pricing advantage arises because TIC ownership has historically been viewed as riskier or more complex than traditional forms of ownership. However, with evolving lending options and legal protections, TICs have evolved into a mainstream option for many buyers. For example, only until recently have 30-year fixed loan options been availble to TIC buyers.

The legal foundation of a TIC is the Tenancy in Common Agreement. This agreement functions similarly to a condo Homeowner Association (HOA) document, spelling out each owner’s rights, responsibilities, and restrictions. For example, the agreement may cover rules for common area use, allocation of expenses, restrictions on renting, and conflict resolution procedures. As with any legal contract, it is vital to read and fully understand the TIC agreement before buying in. SF Attorney Andy Sirkin and his team draw up the majority of the TIC agreements in San Francisco. Should you have questions about a TIC agreement, his firm can be hired to review the document with you before you submit an offer.

Homebuyers in major urban areas often encounter TICs alongside condos in property listings. Both types of properties may have similar physical layouts—multi-unit buildings, shared entrances, and common facilities—but the nuances of ownership, governance, and resale can differ dramatically.

Understanding what a TIC is—and what it is not—is the first step to making an informed decision. Whether you are a first-time buyer, an investor, or looking to convert a TIC into a condo in the future, this guide will help demystify TIC ownership and provide a framework for evaluating whether it’s the right fit for your needs.

How TIC Units Work: The Basics

Let’s take a closer look at the key aspects of TIC arrangements. In a TIC, ownership is divided “by percentage,” meaning each owner is entitled to a certain fraction of the property (not a particular physical space, legally). In practice, however, the TIC agreement designates specific units for exclusive use by each owner. For example, in a three-unit Victorian building, you might own a 33% interest in the property, with the agreement specifying that you have exclusive rights to the second-floor flat, as well as a parking space and a storage area. A TIC agreement may include professionally-drawn unit and common area maps that show square footage and labels to help buyers understand property layout, features, and measurements. For example, such maps might show that Unit 435 measures 660 square feet and is connected to parking space P-435 in the shared garage.

How is property tax handled? Unlike condos, where each unit is taxed and billed separately, a TIC building receives a single property tax bill. Owners then split this bill according to the percentages set out in the agreement—often based on unit size or market value. Similarly, costs to maintain the building (such as exterior repairs, utilities for shared areas, or landscaping) are also shared proportionally. It is important in your buyer due diligence process to ask the seller is the property tax for the TIC project is calculated on the sale price of each unit.

How are decisions made? Typically, major decisions—like taking out a new loan or undertaking significant building repairs—require consensus among all TIC owners. Day-to-day matters may be delegated to a group or rotating chair. Good communication, clear agreements, and mutual respect are essential for a well-functioning TIC. You can ask the seller, in writing, to comment on these qualitative aspects of the shared ownership in the project, from their perspective.

Why choose a TIC? For many, TICs offer the ability to access desirable neighborhoods or larger spaces at a lower entry price. Others see TICs as an “in-between” step toward full condo ownership, especially in cities like San Francisco, where rules allow certain TICs to later convert to condos.

Next, we’ll compare TICs with condos to highlight the core differences and similarities—an important distinction for any homebuyer to understand.

TICs vs. Condos: Key Differences and Similarities

If you’ve ever shopped for a home in a city like San Francisco, you’ve likely noticed that listings for TICs and condos appear side by side. At first glance, both may seem similar: multi-unit buildings, shared walls, and common spaces. However, the legal, financial, and practical implications of owning a TIC versus a condo are significant—and understanding these contrasts will shape your entire buying experience.

Ownership Structure

Condominium (Condo): Each owner has a deed to a specific unit plus an undivided interest in common areas. You legally own your unit, recorded with the county as a separate parcel. You receive your own property tax bill and can independently mortgage, sell, or refinance your unit.
Tenancy in Common (TIC): All owners hold a percentage interest in the entire property. Each person’s share may correspond to an exclusive-use area (your “unit”), but legally, ownership is not tied to any physical portion. There is one property tax bill for the whole, shared expenses, and joint liability regarding major decisions.

Day-to-Day Living

Both TICs and condos share responsibilities for common areas, like entryways, garages, or backyards.
Each typically has a written agreement setting out rules: maintenance obligations, pet restrictions, guest rules, and rental policies. Whether you are considering a condo or a TIC, it is important to review the written community rules and guidelines, as well as budget, meeting minutes, and common area expenses to make sure living in the project would be a good fit for you in terms of budget, livability, governance, and investment.
Dispute resolution mechanisms are built into both structures, although the process may differ. It’s always a good idea to ask a seller how agreement is generated and disagreements are handled.

Financing

Condos: Buyers have decades of access to traditional individual mortgages. Numerous lenders offer loans backed by Fannie Mae or Freddie Mac, with standard rates and terms. It’s important to know that conventional condo (and single-family home) loans often are sold on the secondary market, which is an income stream for many lenders.
TICs: Historically, buyers could only obtain “group” loans (a single mortgage shared among all TIC owners), increasing risk if one owner defaulted. These shared loans largely are relics of the past. Now, individual TIC loans—where each owner is responsible only for their portion—are now available from several local banks, lessening this risk. We have great TIC lender options to share with you, and this is one of the first steps of the purchase process if you are using a loan.

Resale and Market Value

Condos often command higher resale prices due to mainstream acceptance and easier lending.
TICs tend to sell for 10-20% below comparable condos. However, if a TIC is successfully converted to a condo, its resale value typically increases significantly.

Rules and Restrictions

Condos are governed by a Homeowners Association (HOA) and must follow state and local condo law.
TICs instead rely on their own Tenancy in Common Agreement, which can vary widely. This makes it critical to review each agreement carefully, as rules about rentals, pets, alterations, and voting procedures may differ substantially from property to property.

In Summary: The choice between a TIC and a condo is not just about price, but about shared risk, financial structure, legal complexity, and personal preference. Both can offer excellent opportunities, but they meet different needs and risk tolerances.

Comparing TIC vs. Condo: A Table of Key Features

Feature	Condo	TIC
Legal title	Individual unit deed	Percentage of undivided interest in whole property
Tax bill	Billed per unit	One bill for all, split by legal TIC agreement
Financing	Widely available, individual loans	Mostly local lenders, individual loans
Decision-making	HOA-vote, usually by majority	Must be spelled out in TIC agreement
Resale value	Higher, easy to finance	Usually lower, conversion may increase value. Only 2-unit TIC projects may be able to be converted in SF.
Rental restrictions	Set by HOA, state law	Set by TIC agreement

For buyers, the most important advice is to thoroughly review the TIC agreement—or condo declarations—before purchase, and to work with professionals who can clarify your rights and responsibilities.

Why Consider a TIC? Pros, Cons, and Entry Point Pricing

For many people searching for homes in expensive cities like San Francisco, Tenancy in Common (TIC) units are an attractive alternative to condos and single-family homes. But why exactly should a buyer consider a TIC—and what are the trade-offs involved?

Pros of TIC Ownership

More Affordable Entry Point

TICs often sell for 10-20% less than comparable condos. This “discount” allows buyers to access larger or better-located homes for the same price, or simply lower their monthly housing costs.

Especially for first-time buyers or those with moderate budgets, TICs open the door to neighborhoods and housing that might otherwise be out of reach.

Potential for Value Growth through Condo Conversion

While current laws in San Francisco restrict many TIC conversions (a point we’ll cover in detail later), some two-unit TICs still have a path to becoming condos.
After conversion, units may attract higher resale prices, and lenders view them as less risky—potentially lowering your interest rates and opening up the pool of future buyers.

Unique Character and Selection

TIC buildings tend to be classic architectural gems—Victorians, Edwardians, or midcentury buildings split into flats—rather than modern large complexes.

This means more options in certain city neighborhoods and often more character than newer condo developments.

Shared Maintenance and Expenses

Costs for landscaping, roof repairs, or building updates are shared among owners, typically making them more manageable than if you owned the whole building.

Cons of TIC Ownership

Financing May Be More Complex

Fewer lenders offer TIC loans, and they often require larger down payments (usually 20% or more) and more financial reserves saved up.
Individual TIC mortgages have become more available—but rates and terms can still be more stringent than those for condos.

Group Decisions Can Be Challenging

Significant repairs, property improvements, or issues like refinancing require group consent.
Interpersonal dynamics among owners matter—a poorly crafted agreement or mismatched expectations can lead to headaches.

Legal and Tax Issues May Be More Complex

You are buying a share in a property, not a specific unit, so legalities of title, inheritance, and sale can be more intricate.
Property tax is billed to the building as a whole—requiring careful accounting to avoid disputes. It may make sense for a TIC project to hire a professional management company to handle accounting and maintenance.

Liquidity and Resale

Selling a TIC unit can be more challenging, typically requiring the buyer to secure specialized financing and accept group ownership dynamics.
Market acceptance is broader for condos, which typically translates to higher resale value.

Entry Point Pricing Example

In San Francisco, TIC units have historically provided an entry ramp for those priced out of the condo market. For instance, if comparable two-bedroom condos are listed at around $1,100,000, TIC units in similar locations might sell for $900,000 to $1,000,000—a meaningful difference for most buyers.

A quick comparison of recent sales prices in neighborhoods popular for TICs, like the Mission, Noe Valley, or Hayes Valley, can highlight the savings. However, factor in higher down payments and possible higher loan rates to get the real long-term affordability picture.

When Does a TIC Make Sense?

TICs are ideal for buyers willing to balance a more complex form of ownership with the upsides of lower price and unique property options. If you are comfortable with a collaborative decision-making environment, value location and space, and are willing to do a bit more due diligence, a TIC may be your ideal opportunity.

“TICs offer unique opportunities in high-demand markets, giving buyers access to neighborhoods—and homes—that would otherwise be out of reach. Just be sure to weigh the risks and rewards before committing.”

Jeremy Davidson, Compass

The TIC Agreement: Structure, Rights, and Responsibilities

The foundation of any successful Tenancy in Common (TIC) arrangement is the TIC Agreement. A well-written legal TIC document should govern every aspect of ownership and living in the property, setting out what each member can—and cannot—do, and creating rules for decision-making, maintenance, and even conflict resolution. Understanding the structure of a TIC Agreement is critical for anyone considering buying into a TIC.

Key Elements of a TIC Agreement

Allocation of Ownership and Occupancy

The agreement explicitly states each party’s ownership percentage in the property (for example, one-third of a three-unit building).
It assigns “exclusive use” areas to each owner—this is what allows you to occupy a specific flat, room, garage, or garden area.

Sharing and Use of Common Areas

Guidelines for shared spaces like entryways, laundry rooms, and outdoor areas.
Rules for cleaning, use, and maintenance help prevent misunderstandings.

Financial Responsibilities

Detailed allocations for mortgage payments (if there is a group loan), property taxes, insurance, utilities, and repair costs.
Often, expenses are split by ownership percentages, but alternative methods may apply, particularly if spaces differ greatly in size or desirability. Sometimes water expenses may be calculated on the number of occupants in a unit, for example.

Decision-Making Procedures

Describes how group decisions are made: by unanimous vote, majority, or perhaps supermajority depending on the issue’s significance.
Sets out procedures for regular meetings and voting protocols, including handling absences or tie votes. Pro tip: Get involved in the decision making to make meaningful impacts on your ownership and day-to-day life in the project.

Conflict Resolution

Outlines steps for mediating disputes—often requiring negotiation before litigation or even specifying binding arbitration.
A well-crafted agreement ensures that disagreements do not derail the functioning of the group.

Restrictions and Policies

Policies on rentals (e.g., whether short-term or long-term leasing is allowed, and if so, how many units may be rented out at once).
Pet ownership rules—size, breed restrictions, number allowed.
Policies on renovations, upgrades, and maintenance responsibilities for exclusive-use areas.
Procedures for selling a TIC share, including potential “right of first refusal” by other co-owners.

The Importance of Reading—and Understanding—the Agreement

No two TIC agreements are exactly alike. Each is tailored to the building, its history, and its occupants. It is imperative to read every line, ask questions, and, where possible, consult a qualified real estate attorney or broker with TIC experience.

Tips for Reviewing a TIC Agreement

Look for clarity on how disputes are handled—ambiguity here is a recipe for future trouble.
Double-check the policies on leasing or selling units, which will affect your flexibility to move or rent out the property in the future.
Review repair and maintenance obligations for both shared and exclusive areas.
Ask how amendments are passed—an agreement that is too rigid (or too flexible) can cause issues as needs change.

Pro Tip: Think of the TIC Agreement as your operating manual for co-ownership. A clear, fair, and detailed document is the single best insurance policy you can have for long-term success.

Summary:

A strong TIC Agreement can support happy, cooperative living, can yield smooth financial and maintenance operations, and can reduce surprise conflicts among owners. It’s not just paperwork—it’s your roadmap to a successful co-owned home.

Financing a TIC: Loan Types, Challenges, and Recent Changes

One of the defining characteristics of TIC ownership is its financing structure—which has historically been both a barrier and a significant risk factor. Fortunately, the landscape for TIC loans is changing quickly, giving buyers more options and fewer hurdles. Still, TIC financing remains different from traditional condo or single-family home loans.

Types of TIC Loans

Group (Blanket) Loans

Originally, all TIC buyers had to share a single group mortgage. Everyone was “on the hook” for the total loan, meaning that if one owner defaulted or ran into financial trouble, the entire group had to step in—or risk foreclosure on the entire property.
While these loans are still available, they are less common in new TICs due to their risks.

Fractional (Individual) TIC Loans

A major development in the TIC market: buyers can now obtain their own individual loan for their specific share.
If you default, only your share is at risk—not the entire building or your neighbors.
Several San Francisco-based lenders and credit unions offer these products under strict guidelines.
Down payments are usually higher (typically 20% or more), rates may be slightly above conventional conforming loans, and options for adjustable vs. fixed rates may be more limited.

Recent Changes and Progress

In the past, individual TIC loans were rare and hard to qualify for. Today, several reputable lenders offer these products, making TIC ownership much more appealing and secure.
Some lenders are open to refinancing older group/blanket loans into individual/fractional loans for existing TICs—an option worth investigating if you’re already an owner.

Financing Challenges: What to Watch Out For

Fewer lenders specialize in TICs, so shopping around is key. Not all banks will even consider this property type.
Non-conforming loan status means rates and fees can vary widely.
If future condo conversion is your goal, check with your lender for rules on refinancing and requalifying after conversion.
Be aware that if the TIC has fewer than three units (such as a traditional two-flat in San Francisco), your financing prospects—and conversion potential—may be better.

Best Practices for TIC Borrowers

Work with a mortgage broker knowledgeable in local lenders’ specific TIC products.
Know your down payment requirements and budget for higher rates and fees.
Factor the cost of insurance, taxes, and shared expenses into your affordability calculations.
Discuss “exit” scenarios (sale, refinancing, or conversion) with your broker and your co-owners in advance.

Don’t Forget that Times Have Changed: Individualized TIC loans have changed the game—they lower risk and make TIC ownership accessible to far more buyers.

Choose a Strong San Francisco-Based TIC Lender

If you’re not pursuing a cash purchase, financing is the gateway to TIC ownership. Take your time to compare options and understand your commitments—and always consult with a professional who specializes in TIC transactions.

Legal and Tax Considerations: When to Consult an Attorney or CPA

Just like any real estate investment, purchasing a TIC comes with legal and tax considerations that can impact your finances, rights, and peace of mind. Because the legal framework for TICs differs from that of condos or single-family homes, it’s especially critical to consult with experienced professionals before you sign any documents or transfer funds.

When and Why to Consult an Attorney

Agreement Review

Every TIC Agreement is unique. An attorney can clarify ambiguous terms, highlight hidden restrictions, and ensure fair conflict resolution procedures are in place.
This professional oversight prevents misunderstandings and can save you significant legal trouble down the road.

Title and Vesting Issues

TICs are sold as percentages of the whole property—not as legally discrete units. This can create confusion over your rights, especially concerning resale, inheritance, or partner separation.
An attorney can explain your vesting options (how title is held) and how to plan for life events such as marriage, divorce, or death. Escrow/Title professionals also can help you decipher and understand your ownership options with respect to your marital and business entity status.

Condo Conversion

If your long-term plan is to convert the TIC to condos, legal guidance is vital. The process involves city applications, strict timelines, compliance with division-of-title legalities, and attention to local moratoriums.
In San Francisco and other cities, rules change frequently, and an attorney keeps you up to date.

When and Why to Consult a CPA

Tax Allocation

While a TIC may seem similar to a condo day-to-day, property tax is billed to the whole building. A CPA can help document how taxes should be properly divided among co-owners—protecting you if someone fails to pay their share.
Complicated situations, such as unit improvements or changes in share allocation, can affect your tax liability.

Tax Deductions and Credits

Mortgage interest, property taxes, and some improvement expenses may be deductible—but you must have proper documentation that reflects your specific percentage ownership.
A CPA can help you avoid audit risks and ensure all possible deductions are claimed correctly.

Capital Gains and Resale

If you later sell your TIC share, how capital gains are calculated may differ from other real estate transactions. Expert tax advice ensures you comply fully and maximize after-tax proceeds.

Risks of Skipping Professional Advice

Misinterpretation of TIC agreements and title issues can lead to expensive legal disputes or difficulties selling your share.
Tax filing errors can result in penalties, audits, or missed financial opportunities.
Local requirements (e.g., city ordinances or impending changes to conversion schedules) are constantly evolving.

Real Estate Attorney

In summary, while buying a TIC isn’t inherently riskier than a condo, it is more complex. Consider investing in legal and tax advice to safeguard your investment and your future.

Condo Conversion: Process, Opportunities, and Current Moratoriums in San Francisco

One of the most attractive aspects of TIC ownership is the possibility of “condo conversion.” Many buyers purchase TIC units with an eye toward eventually turning their shares into individually deeded condominiums, which often boosts property value, simplifies resale, and increases financing options. In a city like San Francisco, however, the path to conversion is complex and ever-changing.

What Is Condo Conversion?

Condo conversion refers to the legal process of dividing a multi-unit property—often structured as a TIC—into independently deeded condominium units.
After conversion, each owner holds title to their own condo plus a share of common areas. Financing options improve, resale liquidity increases, and individual property tax bills are issued.

The Conversion Process: General Steps

Confirm Eligibility

Not every TIC can convert. Local ordinances often restrict conversion based on building size, tenancy history, or rent-control status.

Hire Professionals

Attorneys, surveyors, and often architects are required to navigate legal filings, city inspections, and modification of title records.

Complete Government Applications

Submit detailed condominium plans, engineering surveys, and conversion paperwork to city or county officials.

Upgrade and Update

Conversion usually requires bringing the property up to code, sometimes including major plumbing, electrical, or accessibility improvements.

City Inspection and Fees

Local government will inspect the property, potentially requiring additional upgrades, and collect conversion, application, and processing fees.

Finalize Deeds and Titles

Upon final approval, the property’s title is legally subdivided into separate condos.

Current Moratoriums and Opportunities in San Francisco

Since 2013, San Francisco has imposed a moratorium on most condo conversions in buildings with three or more units until at least 2025 or 2026. This was implemented to preserve affordable rental housing amidst citywide displacement concerns.
As of now, only two-unit buildings—where each unit has been occupied by a separate owner—are generally eligible for condo conversion via a streamlined application process.
The city requires extensive documentation, independent inspections, and upgrades, as well as payment of substantial application and survey fees.

The Upside of Conversion:

Higher Property Value: Condos typically sell for more than TICs.
Greater Loan Access: Traditional loans (including FHA and conventional) are available to condo owners.
Smoother Resale: Multiple buyers and real estate agents are more familiar with condo transactions.

The Challenges:

Uncertain Timelines: Local ordinances can change, extending or shortening the waiting period.
High Upfront Costs: Professional fees, required repairs, and city charges can total tens of thousands of dollars.
Potential for Delay: If all TIC owners aren’t on board—or can’t finance the necessary upgrades—conversion may stall indefinitely.

Remember: Condo conversion remains the holy grail for many TIC owners, but patience and preparation are essential—especially in San Francisco.

Summary:

If you’re considering buying a TIC with the hope of eventual condo conversion, know the current city laws, build a cushion in your budget for unexpected costs, and consult an attorney experienced in local conversion regulations.

Living in a TIC: Community Rules, Decision-Making, and Common Area Management

TIC living can offer a strong sense of community, shared stewardship, and access to larger or better-located homes. However, this form of ownership also comes with unique governance and management responsibilities, making collective decision-making a daily reality.

Community and Rules

The rules for living in a TIC are spelled out in the initial TIC Agreement (see earlier section), but they can evolve over time through group consensus and formal amendments.
Common “house rules” may cover:
- Use of common areas (backyard, laundry, shared storage).
- Noise levels and quiet hours.
- Pet ownership restrictions (number, type, or size).
- Procedures for guest stays or short-term rentals.
- Cleaning/maintenance routines for shared spaces.

Decision-Making Frameworks

Unlike condo HOAs, where majority vote may be standard, TICs vary—some require unanimous consent for big decisions, others use proportional voting (based on ownership share), or a mix of both.
Major expenditures (roof replacement, capital improvements) typically require more agreement than routine matters (landscaping, minor repairs).

Best Practices for Making Decisions

Regular Meetings: Schedule consistent group meetings (monthly or quarterly) for discussion and voting.
Clear Voting Processes: Agree on when and how votes will occur, and the threshold needed for approval.
Written Minutes: Document outcomes and distribute to all owners—especially important for major repairs or decisions.
Conflict Resolution: Have a clear “escalation” plan, e.g., informal discussion, then mediation, then arbitration if needed.

Common Area Management

Shared upkeep is often the most contentious part of TIC living if expectations are not agreed upon early.
Decide in advance who handles scheduling repairs, paying bills, and overseeing contractors. Many successful TICs rotate these duties annually or hire a professional property manager (splitting the cost).
Maintain a reserve fund for major repairs, collected monthly together with regular dues.

The happiest TICs are built on transparency, compromise, and clear lines of communication. Regular meetings and agreed-upon house rules are your first line of defense against misunderstandings.

Summary:

Living in a TIC demands both independence and collaboration. If you prize community and consensus, and are prepared to openly discuss your needs and expectations, a TIC can become a rewarding home for many years.

Life Events and TIC Ownership: Marriage, Divorce, Inheritance, and Title Issues

Owning a TIC share involves not only group decision-making and communal living but also preparing for life’s major milestones and challenges. Because TIC ownership is structured as a fraction of an entire property—not a legally subdivided unit—these events can add complexity to transfer, inheritance, or division of your share.

Marriage and Domestic Partnerships

If you marry or enter a domestic partnership after buying a TIC share, your spouse’s legal rights to your share will depend on how title is held—separately or jointly. California is a community property state, so special rules may apply.
Amendments to the TIC Agreement may be needed to reflect a new co-owner, especially if both partners intend to share occupancy or voting rights.

Divorce or Separation

In the event of divorce, your TIC interest is typically subject to property division like any other asset. However, partitioning a share of a home co-owned with individuals outside your marriage can be complicated.
TIC Agreements often have right of first refusal language, requiring that separated partners offer their share to the existing owners before selling to outsiders.

Inheritance and Estate Planning

Upon death, your TIC interest is a real estate asset that passes to heirs according to your will or, if none exists, California law. Unlike condos, which are clearly defined units, a TIC share includes both exclusive- and common-area rights.
Preparing a will or living trust that specifically addresses your TIC share is critical to simplify probate, avoid disputes among your co-owners, and ensure the intended transfer.

Transferring Title

Any change in legal ownership—even within your family—must be documented with the county and recorded with your mortgage lender and insurance provider.
Some TIC Agreements restrict or require approval for any title transfer, ensuring that all co-owners are comfortable with any new owner who might move in.

Best Practices for Planning Ahead

Consult Professionals: Review your title and TIC Agreement with a real estate attorney when major life events occur.
Update the TIC Agreement: Proactively amend ownership, voting, and occupancy provisions as your circumstances change.
Plan for Illness or Disability: Have powers of attorney in place for financial and legal decisions related to your home.

A little planning now prevents a lot of heartache later. Make sure your TIC interests are protected, whatever life brings.

Summary:

Life doesn’t stop for property agreements. As a TIC owner, taking time to safeguard your interests during major life events is not just wise—it’s essential.

Tips for Prospective Buyers: Due Diligence, Reading Agreements, and Next Steps

Buying into a Tenancy in Common property represents a unique opportunity—but also carries a special set of obligations and risks. The best way to protect yourself is with thorough research, knowledgeable advisors, and a cautious, deliberate approach.

1. Start with Due Diligence

Research the building’s history. Was it recently converted to a TIC? Who are your potential co-owners?
Request and review disclosures on building systems, recent repairs, and any outstanding city violations.
Ask to see minutes from past owner meetings to get a sense of group dynamics and any ongoing disputes.

2. Read the TIC Agreement—Twice!

Don’t just skim. Read every word of the agreement, noting key rules on repairs, meetings, voting, selling, renting, and restrictions on alterations.
Make a written list of questions and seek clarification from your agent or an attorney before you commit.
Ask about any recent or planned amendments, and whether any disputes have occurred among owners.

3. Evaluate Financing and Affordability

Confirm that you qualify for available TIC loans—understand down payment, terms, and future refinancing options.
Calculate all monthly costs: mortgage, TIC dues, repairs, property taxes, and reserves for major projects.
If conversion to condos is your goal, consider the timeline, likelihood of city approval, and potential costs involved.

4. Consider the Long-Term

Life events like marriage, divorce, or inheritance can complicate ownership—make sure your TIC share is protected for the future (see previous section).
Assess the group’s stability: Do the other owners seem cooperative, communicative, and financially stable? Your ability to sell in the future may depend on their cooperation.

5. Work with Trusted Professionals

Choose a real estate agent who has successfully closed TIC sales in your area.
Hire an attorney to review (and possibly negotiate) the TIC Agreement.
Meet with a CPA to clarify property tax allocation and tax treatment of your share.

Next Steps After You Buy

Attend all owner meetings and keep communication lines open.
Contribute to the building’s reserve fund for repairs.
Keep your own records of agreements, expenses, and correspondence.
Stay engaged and proactive—you are not just buying a home, but becoming part of a shared community.

Knowledge is your best ally when buying a TIC. Take time to ask questions, understand your obligations, and make sure this unique path to homeownership fits your goals.

Living Together, Succeeding Together: The Future of TIC Homeownership

As the real estate market evolves—especially in competitive, high-cost cities—the Tenancy in Common model is gaining new relevance. With fractional financing now mainstream and more buyers seeking creative ways to own property, the future for TICs is bright.

Why TICs Matter Now

Urban affordability challenges make shared ownership solutions attractive.
Modern TIC Agreements and better lending options remove much of the risk that once accompanied group loans.
For buyers who value location, historic charm, and a sense of community, TICs offer a unique and rewarding path to homeownership.

A Final Word of Encouragement

Co-ownership is not always effortless—but with the right preparation, partners, and agreement, it can be a deeply fulfilling experience. You don’t just buy a home; you invest in community, collaboration, and mutual support.

In a city that can feel overwhelming, being part of a TIC means you’re never alone in facing the joys and the challenges of homeownership.

Jeremy Davidson & Mike Yohay

Compass

DRE 02085874 | 02080767

415.717.4103 | 510.717.2380

Main Content

Introduction to TICs: What Are Tenancy in Common Units?

Introduction to TICs: What Are Tenancy in Common Units?