Curious why so many San Francisco listings include “TIC” and whether one could work for you in Lakeshore? You are not alone. TICs can open doors in competitive neighborhoods, but they come with unique rules, financing, and shared-responsibility tradeoffs. In this guide, you’ll learn what a TIC is, how it differs from condos and co‑ops, what to expect with financing, the key risks, and the exact documents to review before you write an offer. Let’s dive in.
What a TIC is
A tenancy‑in‑common, or TIC, is a form of shared ownership where you hold a fractional interest in an entire property, such as 25% of a four‑unit building. You receive a deed for your percentage interest rather than a deed to a specific, separate unit. Your right to live in a particular unit is spelled out in a written TIC agreement that also covers rules, expenses, maintenance, sales, and dispute resolution. In San Francisco, TICs are often found in smaller multi‑unit buildings that were never subdivided into condos.
TICs vs. condos and co‑ops
A condo is a separate legal parcel with its own assessor’s parcel number and an association that manages common areas under recorded CC&Rs. A TIC is not a subdivision; you and your co‑owners share one property and govern it through a private TIC agreement. Compared to co‑ops, which involve owning shares in a corporation with a proprietary lease, TICs give you a direct real property interest recorded on title. These structural differences affect financing, governance, and future resale.
Why Lakeshore buyers consider TICs
San Francisco has long used TICs to allow separate ownership in buildings that were never converted to condos. Availability rises and falls with market cycles and can offer a more affordable path when condo prices are high or inventory is tight. In Lakeshore, where you will see a mix of housing near Lake Merced and the Parkmerced corridor, a TIC may put you closer to your ideal location or budget. Always confirm a property’s zoning and records with city resources before you move ahead on a specific listing.
Local rules that affect TICs
San Francisco has strong tenant protections that can influence occupancy and value in multi‑unit properties. Laws tied to rent control, just‑cause eviction, and the Ellis Act can shape what you may do with a unit that is tenant‑occupied and may impact plans for conversion. Condo conversion in San Francisco is regulated and is not automatic for TIC buildings. If conversion matters to your plan, factor in city permitting and timeline uncertainty early.
Financing a TIC in San Francisco
Financing looks different for TICs than for condos. Many buyers obtain an individual mortgage secured by their percentage interest and tied to the TIC agreement, while some buildings still carry a single master mortgage for the entire property. Not all lenders work with TICs, and loan terms vary based on the building’s documentation, reserves, and owner‑occupancy profile.
- Down payment: Lenders often require a larger down payment, commonly in the 20–30% range, depending on the project and the lender.
- Pricing: Interest rates and fees may be modestly higher than standard residential loans due to limited secondary‑market options.
- Programs: FHA/VA options are limited for TICs. Do not assume eligibility without checking with a lender who knows TICs.
- Insurance: Expect lenders to review the building’s master hazard and liability policies and any required individual coverage.
If the property has a master mortgage, understand its terms. A default under a master loan can affect the entire building, so you need clarity on whether you would assume any obligation or take title subject to that loan.
Risks to understand before you buy
TICs work well when governance is clear and finances are sound. They can be stressful when agreements are outdated or reserves run thin. Keep these risks in view as you evaluate a Lakeshore TIC:
- Shared obligations: Depending on the agreement, you may share responsibility for certain payments like taxes or building expenses. One owner’s delinquency can affect others.
- Foreclosure complications: Master mortgages or a co‑owner’s foreclosure can complicate title and occupancy for everyone.
- Resale and liquidity: TICs often have a smaller buyer pool than condos because financing is more complex, which can affect days on market and pricing.
- Governance and disputes: Weak agreements fuel conflict around assessments, repairs, short‑term rentals, or approval rights for buyers and subleases. Many agreements include right‑of‑first‑refusal or sale approval procedures.
- Partition risk: In some cases, an owner can request a court‑ordered partition that may force a sale of the entire property. Many agreements aim to prevent this with buy‑sell provisions.
- Tax and insurance: Reassessment rules and insurance deductibles can impact your long‑term costs. Confirm how these are allocated.
Due‑diligence checklist for Lakeshore TICs
Use this checklist to review a specific listing before you write an offer. Prioritize clarity on title, financing, reserves, rules, and any tenant or conversion history.
Request these documents
- Recorded deeds for the TIC interests and your percentage allocation.
- The TIC agreement, all amendments, and written house rules.
- Any recorded covenants affecting the property.
- Master mortgage documents, if any, and status of payments.
- Preliminary title report and recent vesting deeds; check for liens or judgments.
- Project financials: current budget, P&L, balance sheet, reserve balance, and assessment history.
- Insurance policies: building hazard/liability declarations and required owner coverage.
- Minutes of owner meetings and notices of pending litigation or special assessments.
- Rental and occupancy history plus current leases, with any documents on rent control status.
- Any condo conversion studies, planning filings, or prior conversion attempts.
Ask the sellers or managing owners
- Is there a master mortgage? If yes, what are the terms and is it current?
- Any recent delinquencies or foreclosures among owners?
- Open code violations or pending permits?
- Reserve fund level and major projects planned over the next 5–10 years?
- Rules for subleasing and short‑term rentals under the TIC agreement?
- Exact process and timeline to sell an interest, including right‑of‑first‑refusal or approval steps?
- Any history or threats of partition actions?
Red flags to investigate
- Low reserves paired with aging systems like roof, plumbing, or seismic needs.
- A master loan in default or with an upcoming balloon payment.
- A vague or outdated TIC agreement without clear dispute or exit rules.
- High investor concentration if your lender requires owner‑occupancy.
- Trouble obtaining building insurance or unusually high premiums/deductibles.
How to decide if a TIC fits your plan
Start by clarifying your timeline, budget, and tolerance for shared governance. If the building’s documentation is strong and reserves are healthy, a TIC can be a practical route into Lakeshore. If you plan to convert to a condo later, factor in San Francisco’s rules and the possibility of delays or obstacles. For financing, speak early with lenders who regularly underwrite TICs so you know your down payment and rate options.
If you want a smoother process, set your strategy up front: review the TIC agreement in detail, confirm the insurance and reserve picture, and understand how buyer approvals and resale mechanics work in that building. Clarity before you write an offer will make negotiation and ownership feel more predictable.
Ready to compare your options and map a plan that fits your goals? For calm, design‑sensitive guidance on buying and owning in the East Bay, connect with Lauren Kilbourne for a conversation about next steps.
FAQs
What does “TIC” mean in San Francisco real estate?
- A tenancy‑in‑common is shared ownership of one property where each owner holds a fractional interest and uses a specific unit under a written TIC agreement.
How is a TIC different from a condo for Lakeshore buyers?
- A condo is a separate legal parcel with an HOA, while a TIC is a shared property governed by a private agreement, which affects financing, governance, and resale.
Can I get a mortgage on a TIC in San Francisco?
- Possibly, but lender options are more limited; down payments often run 20–30% and rates or fees may be higher than for standard condos.
What risks come with buying a TIC in Lakeshore?
- Shared obligations, potential foreclosure complications, smaller buyer pools at resale, and governance disputes if the TIC agreement or reserves are weak.
Can a TIC be converted to a condo in San Francisco?
- Conversion may be possible but is regulated and can be complex; success depends on city rules, building conditions, and any tenant protections in play.
