Tenancy In Common Units Are An Affordable Way To Get A Property in the City, But It’s A Little More Complicated Than Going to the Lender and Just Moving Right In
During your property search you may come across a seemingly incredible steal of a deal for a renovated space in an older Victorian and Edwardian shell. You’re excited. You think you’ve found it. How could someone overlook this deal? Did you miss something? Then you look closer again and you’ll see these words: “tenancy in common,” or, “TIC.” What’s that supposed to mean? TICs may look like a condo, feel like a condo and act like a condo but they are legally distinct and this will impact lending, rental rights and other important rights that go beyond this summary.
- Tenancy-In-Common units — TICs for short — are a hybrid between a single-family house and a condominium that are pretty unique to San Francisco. Legally, you’re buying and undivided interest in a property. In reality, a private contract between other owners of a given property will spell out what percentage of the property you’re buying and what comes with that given interest. Think of this all as “owners in common.”
- Selling properties this way was a response to the Rent Ordinance’s stringent tenant protections, a restrictive building environment that is informed by historical protection requirements as well as neighborhood comment on any permit that expands a building’s foot print. Thus, TIC units came into use through the efforts of a clever attorney, smart lender and realtors.
- Some TIC units may become condo, but not all of them can (or will) which will greatly impact market value.
- Various factors determine if a TIC building can go condo and not many are in your control such as if someone evicted a tenant in the past (like before you even moved to San Francisco, or were born, etc).