Trying to choose between a TIC and a condo in San Francisco? You are not alone. Both paths can get you into a great neighborhood, but they work very differently and affect your financing, resale, and day-to-day control. In this guide, you will learn the core differences, what lenders look for, how resale plays out, and a clear checklist to evaluate any building with confidence. Let’s dive in.
Quick definitions
What is a condo?
A condominium gives you fee simple title to your unit plus a shared interest in common areas. An HOA manages building rules, budgets, reserves, and maintenance through CC&Rs and bylaws. Each unit is its own legal parcel, so you can finance, sell, or refinance it independently.
What is a TIC?
A tenancy in common gives you a fractional ownership interest in the whole property and the right to occupy a specific unit under an occupancy agreement. Rules and responsibilities live in a private TIC agreement that can vary a lot by building. Because title is shared, decisions and transfers often require more coordination among owners.
Ownership and governance
Condos follow a standardized legal structure. The HOA enforces CC&Rs, collects assessments, and manages reserves and repairs by board vote and written rules. You have more autonomy to handle your own financing and sale.
TICs are governed by a custom contract set, usually a TIC agreement plus an occupancy agreement. These documents cover expense sharing, maintenance, voting, transfers, and default remedies. Because terms are negotiated, provisions can differ widely, so your rights depend on what is written.
Financing realities in SF
Condo loans are widely available from conventional lenders, and some programs may include government-backed options if the project qualifies. Underwriting focuses on you, the unit, and the HOA’s financial health. Refinancing is usually straightforward.
TIC financing is more specialized. Expect fewer lenders, potentially higher rates, and sometimes larger down payments compared with similar condos. Work with a mortgage broker who has recent San Francisco TIC experience, and verify program availability early.
How TIC loans can be structured
- Some lenders use a blanket loan that involves multiple co-owners, or they require specific title endorsements for the fractional interest.
- Appraisals often rely on TIC comparables, which may be less plentiful than condo comps.
- Refinances and future loan options are possible but can be more limited than standard condo financing.
Resale, value, and risks
TICs often sell at lower purchase prices than comparable condos, which is why they are seen as an entry point in central neighborhoods. The trade-off is a smaller buyer pool and financing friction, which can slow resale. Price-per-square-foot and appreciation vary by building and area.
Shared obligations are another key difference. Depending on the TIC agreement, owners may share responsibility for taxes, insurance, or any blanket loan. If one owner defaults on shared costs, it can affect others, so review default and indemnity provisions closely.
Condo associations collect assessments with clear statutory remedies for delinquencies. TICs rely on contract remedies, which depend on what the agreement allows. Also, ask about prior disputes, legal expenses, and any special assessments in recent years.
Considering condo conversion
Conversion from a TIC to a condo is sometimes possible, but it is not guaranteed. It typically requires legal subdivision, city approvals, and owner consent, plus fees and timelines. Treat conversion as a bonus only when there is documented feasibility and a specific plan.
Insurance considerations
Condo owners typically use a master HOA policy plus an individual HO-6 policy. TICs also use building insurance, but coverage limits, deductibles, and loss allocation should be reviewed in the TIC agreement and policy documents.
San Francisco context
TICs are most common in older multi-unit buildings, especially in neighborhoods like the Mission, Noe Valley, the Castro, Haight-Ashbury, and the Western Addition. Many were set up in past decades due to local conversion rules and tenant protections. These policies can still affect ownership and future plans.
Many TIC buildings are wood-frame structures. Pay attention to seismic retrofit status, soft-story requirements, foundation condition, and permit histories. Because TICs often sit in desirable central areas, you may trade liquidity for location, so compare TIC and condo comps before deciding.
Due diligence checklist
Pre-offer screening
- Confirm the ownership form and request the TIC agreement, occupancy agreement, and any recorded declarations.
- Get preapproved by a lender with recent TIC experience, or confirm standard condo financing if applicable.
- Review seller disclosures, pending assessments, and any planned major repairs.
Document review
- Read the TIC agreement for expense allocation, voting rules, transfer restrictions, right of first refusal, and default remedies.
- Confirm your exclusive right to occupy the specific unit in the occupancy agreement.
- Analyze building financials: reserve fund, operating budget, delinquency rates, and recent assessments.
- Review insurance coverage, deductibles, and any indemnity language.
- Check service contracts and maintenance records for roof, plumbing, electrical, pest control, and seismic work.
- Ask for litigation history involving the TIC entity or owners.
Inspections and permits
- Order a comprehensive home inspection, plus foundation, seismic, moisture, and pest inspections for older buildings.
- Verify permits and any change-of-use or conversion approvals with local departments.
Title, liens, and loans
- Run a title and lien search for building-level obligations such as taxes or contractor liens.
- Determine whether a blanket loan exists and how it affects individual financing.
Financing diligence
- Obtain written confirmation from your lender that the specific TIC interest is financeable.
- If seller financing or a loan assumption is proposed, get lender consent and review terms.
Exit planning
- Review transfer and resale provisions and any obstacles to sale or future conversion.
- Request recent sales history in the building, including time on market and sale prices for TIC interests.
Professional team
- Hire a San Francisco attorney who regularly reviews TIC agreements.
- Work with a mortgage broker, title company, and escrow officers familiar with TIC transactions.
Red flags
- TIC agreement is unclear, outdated, or contradictory.
- High delinquencies or significant recent special assessments.
- Active litigation or consent decrees affecting the TIC.
- Inability to obtain financing or title insurance for the fractional interest.
Decision framework: Is a TIC right for you?
Ask yourself what you value most. If you want standardized financing, simpler resale, and minimal co-owner coordination, a condo often fits better. If your top goal is a lower entry price in a location you love and you are comfortable with contracts and specialized financing, a well-documented TIC can work.
Consider your risk tolerance. Can you handle potential resale delays and shared obligations? Do you have reserves for larger down payments or special assessments? Be sure the total cost, including likely interest rate, fees, and time-to-resell, still makes the TIC advantageous versus a nearby condo.
Next steps
- Start with financing and secure a preapproval specific to a TIC interest.
- Gather all building documents and have a local attorney review them.
- Hire inspectors familiar with older San Francisco buildings and seismic issues.
- Obtain a title commitment and confirm how insurance will be issued for the undivided interest.
- Compare recent building sales to local condo comps to assess price and liquidity.
- If conversion matters to you, request written evidence of feasibility and a defined plan.
Choosing between a TIC and a condo comes down to fit, financing, and comfort with shared ownership. With careful diligence and the right local team, you can move forward with clarity and confidence. If you want a guided, side-by-side evaluation tailored to your goals, reach out to JeanMarie Buckley.
FAQs
What is the main legal difference between a TIC and a condo?
- A condo gives you fee simple title to a specific unit, while a TIC gives you a fractional interest in the whole property plus the right to occupy a particular unit under contract.
How does financing differ for TICs in San Francisco?
- TIC loans are offered by fewer lenders and may require larger down payments and higher rates, so you should confirm loanability with a TIC-experienced lender early.
Are TICs cheaper than condos in San Francisco?
- TICs often sell for lower prices than comparable condos, but the trade-off can include a smaller buyer pool, financing limits, and potentially longer time on market.
What risks do TIC owners share that condo owners may not?
- Depending on the TIC agreement, owners can share responsibility for building-level obligations like taxes, insurance, or any blanket loan, creating exposure if another owner defaults.
Can every TIC convert to a condo in San Francisco?
- No, conversion depends on legal feasibility, city approvals, and owner consent, and it can be costly and lengthy, so do not assume conversion unless there is documented evidence.
What inspections should I prioritize for older SF TIC buildings?
- In addition to a general home inspection, consider foundation, seismic, moisture, and pest inspections, and verify permits and retrofit history for the building.
