TIC vs Condo in San Francisco: Key Differences for Buyers

Thinking about buying in San Francisco and keep seeing both TIC and condo listings? You are not alone. The two look similar from the curb, but the way you own, finance, and resell them can be very different. In this guide, you will learn the key differences, what they mean for your budget and timeline, and how to decide which option fits your goals. Let’s dive in.

TIC vs condo basics

A condominium gives you fee-simple title to a defined unit plus a shared interest in common areas like the roof and hallways. Each unit is its own recorded parcel with its own deed and mortgage.

A Tenancy in Common gives you a fractional interest in the entire property title, paired with exclusive rights to occupy a specific unit through a private TIC Agreement. Your ownership is contractual, not a separate recorded unit.

In San Francisco, TICs are common in older multi-unit buildings, especially in neighborhoods with pre-war flats such as parts of the Mission, Noe Valley, Castro, Haight-Ashbury, and Western Addition. Condos are frequent in newer buildings and completed conversions.

Ownership and governance

Title and possession

• Condo: You hold title to your unit and an undivided share of common elements. Transfers record like any other home sale.
• TIC: You own a percentage of the whole building and receive exclusive use of a specific unit through the TIC documents. A buyer typically takes an assignment of the seller’s percentage interest plus occupancy rights.

Rules and decision-making

• Condo: An HOA with recorded CC&Rs and Bylaws manages budgets, rules, and reserves under established procedures.
• TIC: A private TIC Agreement and house rules govern the building. Decision-making can require higher levels of consent for big items. Some agreements need unanimous approval for alterations or sale.

Transfers and restrictions

• Condo: You can sell your unit independently, following HOA and state rules.
• TIC: Transfer rights often include approval steps or a right of first refusal for co-owners. Expect to follow specific notice and offer procedures spelled out in the agreement.

Financing and insurance

How condo loans work

Condo mortgages are broadly available from many lenders, including conforming programs, jumbo loans, and government-backed options. Lenders will review the project’s eligibility, HOA financial health, reserves, and any litigation.

How TIC loans differ

TIC financing is more limited and can be more restrictive. Many mainstream lenders do not offer TIC loans or set tighter terms. Common features include:

• Larger down payments, often 20 to 30 percent or more.
• Owner-occupancy requirements that limit investor purchases.
• Stricter debt-to-income and reserve standards.
• Full review of the TIC Agreement, occupancy documents, and sometimes co-owner financial standing.

Government-backed programs like FHA and VA are more restrictive for TICs than for condos, and availability can change. If a TIC interests you, engage a lender experienced with TICs early and get written, property-type specific pre-approval.

What lenders scrutinize on TICs

• The complete TIC Agreement and any amendments.
• Evidence that all co-owners are current on obligations.
• Building condition, title continuity, and any litigation.
• Insurance coverage and master policy terms.

Insurance basics

• Condo: The HOA usually carries a master policy for the structure and common areas. You add an HO-6 policy for interiors and personal property.
• TIC: A master policy typically exists but terms vary. Lenders may require specific language and limits. It is common for buyers to carry more extensive individual coverage to avoid gaps.

Resale and marketability

Liquidity and pricing

TICs have a narrower buyer pool due to financing complexity and contractual requirements. As a result, they may be less liquid than condos. In some cases TICs sell at a discount compared to similar condos, though the gap varies by location, building quality, and market cycle. Local comps are essential.

Transfer procedures and timing

Many TIC Agreements include transfer restrictions or rights of first refusal. Built-in approval steps and notice periods can add time to your closing. If any co-owner is delinquent on assessments or mortgages, it can complicate financing for a buyer and slow a sale.

Condo conversion in San Francisco

Converting a TIC to a condo can be possible, but it is complex, time-consuming, and costly. You will face city planning rules, tenant-protection requirements, inspections, the Subdivision Map Act, and new parcel recording. Approval timelines vary and often require cooperation among all owners and, in some cases, lenders. Do not assume any TIC can convert. Feasibility depends on the building condition, tenant mix, financing, and the TIC Agreement’s approval thresholds.

Risks to consider

Partition risk

Because TIC owners co-own the entire property, a co-owner may be able to file a partition action in some circumstances. Good TIC Agreements try to avoid this with buyout and sale mechanisms, but the risk does not disappear. Partition litigation is costly and can force a sale.

Co-owner performance

Your ownership experience depends on all co-owners meeting their obligations. Defaults on assessments or mortgages can create risk and affect financing or sale timelines. Review records of owner compliance and reserves closely.

Due diligence checklist

Use this list to structure your pre-offer review and contingency period:

• Lender pre-approval specific to property type. For TICs, get written confirmation from a TIC-experienced lender. For condos, standard pre-approval is fine.
• Legal documents. For condos, request CC&Rs, Bylaws, rules, meeting minutes, financials, reserve study, budget, and any litigation disclosures. For TICs, obtain the full TIC Agreement and amendments, occupancy agreements, organizational documents, current operating budget, assessment history, reserves, insurance policies, transfer procedures, records of owner compliance, and any notices or litigation.
• Insurance. Confirm master policy coverage, requirements for individual policies, and any lender-required endorsements.
• Title and taxes. Verify how ownership is recorded. Ask the assessor about reassessment risk for transfers or conversions and consult a tax advisor.
• Building condition. Order a complete inspection that covers foundation, roof, systems, and seismic considerations. Ask about seismic retrofits and recent permits.
• Financial health. Watch for low reserves, repeated or large planned assessments, high delinquency rates, or pending litigation.
• Key clauses. In TICs, focus on transfer rights, right of first refusal, buyout formulas, default remedies, and sale rules for the entire building. In condos, check rental rules, owner-occupancy requirements, and assessment triggers.

Which option fits your goals

Choose a condo if you want broadly available financing, a familiar HOA framework, and potentially easier resale. A condo’s structure can simplify underwriting and future buyer demand.

Choose a TIC if you value potential purchase-price savings and are comfortable with added complexity. You will want stronger upfront diligence on the agreement, co-owners’ compliance, and your lender’s requirements. Expect a longer timeline for loan approval.

If you are comparing a TIC and a condo in the same neighborhood, base your decision on your financing options, the building’s governance and reserves, and your timeline for future resale or upgrades. A clear-eyed review of documents and lender feedback will make your choice easier.

Ready to talk through a specific building or compare options block by block? Reach out to schedule a thoughtful consultation with Stephen J Bartlett. You will get calm, data-informed guidance tailored to San Francisco’s unique mix of TICs and condos.

FAQs

What is a TIC in San Francisco real estate?

• A TIC is fractional ownership of an entire multi-unit property paired with exclusive rights to occupy a specific unit through a private TIC Agreement, not a separate recorded condo unit.

How do TIC loans differ from condo loans in SF?

• TIC loans are offered by fewer lenders and often require larger down payments, stricter underwriting, owner-occupancy, and full review of the TIC Agreement and co-owner compliance.

Can a San Francisco TIC convert to condos?

• Possibly, but conversion is complex and costly, requiring city planning approvals, tenant protections, mapping under state law, inspections, and cooperation among owners and lenders.

Are TICs cheaper than condos in San Francisco?

• They can trade at a discount due to a narrower buyer pool and financing challenges, but gaps vary by neighborhood, building quality, and market cycle. Review local comps.

What unique risks do TIC buyers face in SF?

• Contractual transfer restrictions, dependence on co-owners’ financial health, potential partition actions, insurance gaps, and tighter lender requirements compared to condos.

What documents should I review before buying a TIC?

• The full TIC Agreement and amendments, occupancy agreements, budget and reserves, insurance policies, transfer procedures, owner compliance records, and any litigation or code notices.