Trying to decide between a TIC and a condo in San Francisco? You’re not alone. These two forms of ownership feel similar at first glance, but they work very differently when it comes to title, financing, rules, and resale. This guide breaks down what each option really means in practice, what to expect when you buy, and how to approach due diligence in San Francisco. Let’s dive in.
TIC vs. condo at a glance
A condominium gives you a separately deeded unit and a share of the common areas, all managed by a homeowners association under recorded CC&Rs and state HOA law. A tenancy-in-common gives you an undivided fractional interest in the entire property with exclusive occupancy rights to a particular unit, as spelled out in a private TIC agreement. In San Francisco, TICs are common in older multi-unit buildings that were never converted to condos, while condos are typical in newer developments and formal conversions.
Ownership and title: what you actually own
Condo title basics
- You receive a deed to a specific unit that shows up as its own parcel in county records.
- Your title insurance covers that unit. The HOA manages common areas under recorded documents like CC&Rs and Bylaws.
- Your mortgage and liens attach to your unit.
TIC title basics
- You purchase a percentage interest in the whole property, not a separate unit on title.
- Your right to live in a specific unit comes from the TIC agreement, which grants exclusive occupancy rights.
- Title can be more complex if there are existing recorded liens or a master mortgage. A careful title review is essential.
Liability and mortgages
- Condo owners are typically liable for their own unit’s mortgage and HOA obligations.
- TIC owners may have individual mortgages on their undivided interests, or in some cases a master mortgage on the entire building. If a master mortgage exists, the TIC agreement should spell out who pays what and what happens if someone defaults. You need to confirm this in writing before making an offer.
Financing differences in San Francisco
What lenders typically offer
- Condo loans are widely available from conventional, FHA, VA, and portfolio lenders. The underwriting and appraisal process is standardized.
- TIC loans are offered by fewer lenders, with stricter underwriting. Expect tighter requirements on down payment, reserves, and documentation. A local lender who understands TICs is critical.
Eligibility and program limitations
- Many lenders require owner occupancy for TIC financing.
- FHA or VA approvals are common for condos when a project qualifies, but TIC eligibility is often limited. Always confirm program rules with your lender up front.
Appraisal and valuation
- Appraisers rely on comparable sales. TICs often have a smaller set of comps and can be seen as less liquid, which may affect value and loan-to-value ratios.
- If a master mortgage exists, your lender will address lien priority and any payoff or release requirements before closing.
Practical lender checklist
- Work with a lender or broker experienced with San Francisco TICs.
- Ask about minimum down payment, reserves, and acceptable loan types for TICs.
- Get pre-approval that is conditioned on a review of the TIC agreement and title.
- If a master mortgage is in place, request clear guidance on assumption, release, or payoff.
- Confirm whether all co-owners must sign or guarantee anything related to your loan.
Resale and marketability
Buyer pool and liquidity
- Condos attract a larger buyer pool, including investors and buyers using FHA or VA financing. They tend to be easier to market and finance.
- TICs usually have a smaller buyer pool because of financing complexity and perceived risk. In many markets and cycles, TICs can take longer to sell.
Pricing and comps
- TICs often trade at a discount compared with similar condos, though neighborhood, building quality, and market timing matter.
- Appraisers may use condo comps with adjustments when TIC comps are limited, which can introduce valuation subjectivity.
Typical resale hurdles for TICs
- Limited lender options can narrow your audience of qualified buyers.
- TIC agreements may include rights of first refusal or approval requirements for new buyers, which can add time to a sale.
- Any master mortgage or unresolved title item must be addressed during escrow.
Governance: HOA rules vs. private agreements
Condos and Davis-Stirling
- Condos are governed by state HOA law and recorded CC&Rs. You will receive and review budgets, reserve studies, meeting minutes, and insurance declarations.
- Rules about assessments, meetings, voting, and disclosures follow state statute.
TIC agreements you must review
- The TIC agreement is the core governing document. Review the executed agreement and all amendments.
- Pay close attention to: percentage ownership and expense allocation, occupancy rights, default and foreclosure remedies, voting thresholds, insurance requirements, maintenance duties, and transfer or approval provisions.
- If conversion to condos is contemplated, confirm the process, voting requirements, and how costs or proceeds would be allocated.
San Francisco specifics to watch
Tenant protections and conversions
- San Francisco has strong tenant-protection rules and specific processes for condominium conversion and building permits. If a building is converting or was recently renovated, you should confirm city requirements and status before proceeding.
Taxes and reassessment
- Transfers and unitization can trigger reassessment under California property tax rules. Confirm potential tax impacts with the San Francisco Assessor-Recorder.
Building age and code items
- Many TIC buildings are older. Review permit history and major systems. Seismic upgrades, utilities, and deferred maintenance are common topics during inspections.
Documents and due diligence checklist
Use this list to organize your review and keep your lender and attorney aligned:
- Full, executed TIC agreement and any amendments, side letters, or addenda.
- Evidence of recorded interests, title report(s), and any recorded liens or master mortgage documents.
- Operating budget, history of payments for taxes, insurance, utilities, and any shared obligations.
- Insurance policies for the building and liability coverage.
- Meeting minutes, reserve details, and any delinquency reports.
- Any leases or tenant documents. Confirm whether units are subject to rent control and the terms in place.
- Permit and renovation history, including seismic or major system work.
- For condos, request CC&Rs, Bylaws, Rules, HOA budget, reserve study, financials, recent minutes, litigation disclosures, and insurance declarations.
- Confirm parking, storage, access easements, and any shared utilities or common area maintenance responsibilities.
Which path fits your goals?
Choose a condo if you want
- A larger buyer pool when you resell and a more standardized financing process.
- Statutory HOA governance with consistent rules, disclosures, and budgets.
- The potential to use FHA or VA financing if the project qualifies.
Consider a TIC if you want
- A lower entry price relative to similar condos and you are comfortable with a smaller lender pool.
- A specific neighborhood or building style where TIC inventory is more common.
- A hands-on review of a private agreement that defines your rights and obligations.
How to move forward with confidence
Start with financing. If you are looking at a TIC, connect early with a local lender who regularly closes TIC loans. Next, gather the full set of documents for either structure and have a real estate attorney review the key provisions and the title report. Finally, weigh your resale timeline and future plans, since liquidity and approval requirements can differ.
If you want tailored guidance in San Francisco’s North Waterfront and nearby premium neighborhoods, our boutique Compass team blends long-standing local relationships with elevated listing and buyer support. From pre-listing preparation and Compass Concierge to targeted digital marketing and careful contract review, we help you buy and sell with clarity and confidence. When you are ready to talk through TIC vs. condo for your specific goals, connect with Brad Coy.
FAQs
What is a tenancy-in-common in San Francisco?
- A TIC is co-ownership of the whole property with a fractional interest, plus an exclusive right to occupy a specific unit under a written TIC agreement.
How does condo ownership differ from a TIC in practice?
- A condo gives you a deeded unit and shared common areas under an HOA. A TIC gives you a percentage interest in the whole property with occupancy rights defined by a private agreement.
Can I use FHA or VA financing for a TIC in San Francisco?
- It is often more challenging. Many FHA and VA approvals are project-based for condos, while TICs may not qualify. Confirm with a lender who handles TICs.
Who is responsible if a TIC co-owner misses payments?
- The TIC agreement should define liability, default remedies, and any foreclosure mechanics. In some cases, creditors may have recourse that affects co-owners.
Will buying a TIC affect my resale options in San Francisco?
- TICs typically have a smaller buyer pool and fewer lender options, which can affect market time and pricing compared with condos.
Can a San Francisco TIC convert to condominiums later?
- Often possible, but it requires legal steps, permits, and coordinated owner action. Local conversion rules and tenant protections apply, so confirm feasibility early.
Do TICs have monthly dues like condos?
- TICs may collect monthly payments for taxes, insurance, maintenance, and sometimes mortgage obligations. Condos have HOA dues under state HOA law.
Will a TIC or condo purchase trigger a property tax reassessment in San Francisco?
- Transfers can trigger reassessment under California rules. Verify your specific tax impact with the San Francisco Assessor-Recorder.
