Tenancy-in-Common vs. Condominium

  • Jack Ryder
  • 02/21/22

The deed of the building will show your percentage ownership of the entire building when you buy the Tenancy-in-Common (TIC). There is no individual deed for your unit, but for the entire building itself. In contrast, condo ownership means that a building has been divided legally into physical parts, one of which you separately own.

I've represented multiple buyers in the purchase of their first TIC, which is in some cases more accessible than a comparable condo. It's important to understand which TICs are eligible for condo conversion in San Francisco. Buyers should not assume they can condo convert. Most buildings with 3 or more units are not currently eligible. 

Some TIC buyers pay cash, but if you're financing like most buyers, it's vital to understand that a conventional pre-approval will not help you with the purchase of a TIC. If you are including TICs in your search, you need a separate pre-approval with a lender who specializes in fractional ownership financing. The two main lenders I have referred multiple buyers to are NCB and Bank of Marin. I can recommend a trusted advisor at each institution if you reach out to me directly.

The San Francisco Purchase Agreement includes a TIC Purchase Addendum, which must be included with any offer. As with any purchase, it's important to review the materials in the disclosure package including: the Transfer Disclosure Statement (TDS), the 3R Report, the Preliminary Title Report, and of course the TIC Agreement. Always do your due diligence. 

The main resource for information on TICs is Andy Sirkin. His law office draws up most of the TIC agreements in San Francisco, and he is regarded as the most experienced.