Heard people in Hayes Valley talk about buying a TIC and wonder what that actually means? You’re not alone. Tenancy in Common ownership is common in central San Francisco, yet it works differently than condos. If you understand how TICs are structured, financed, and managed, you can make a smart move in a neighborhood you love.

In this guide, you’ll learn the plain-English basics, how TICs compare with condos and co-ops, what to expect with financing and resale, and a practical checklist for due diligence. Let’s dive in.

TIC basics in San Francisco

Simple definition

A Tenancy in Common is shared ownership of a single property where each buyer owns a fractional interest in the entire building rather than a separate, deeded condo unit. You might own 33 percent of the property and have the exclusive right to live in one unit based on a private occupancy agreement. The operating rules live in a TIC agreement that sets who pays what, how decisions are made, and how disputes are handled.

Why TICs are common here

TICs are part of San Francisco’s housing story, especially in pre-war, multi-unit buildings across central neighborhoods like Hayes Valley. They became a way to sell apartments individually when buildings were not set up as condominiums. Because TICs rely on contracts rather than a recorded condo map, you see different legal and market dynamics than with condos.

Documents you will see

Expect to review several key documents:

• Recorded deed showing TIC interests and percent shares
• TIC agreement and any amendments
• Exclusive occupancy agreements for each unit
• Any master loan documents tied to the building
• House rules, current budget, reserve schedule, and insurance policies

TIC vs condo vs co-op

Title and ownership

• TIC: You own a fractional interest in the whole property and the right to occupy one unit by agreement.
• Condo: You own your individual unit with a separate deed, plus shared ownership in common areas through the HOA.
• Co-op: A corporation owns the building and you own shares with a proprietary lease. Co-ops are far less common in San Francisco.

Legal foundation

• TIC: A private contract governs rights, costs, and decision-making.
• Condo: State statutes and recorded documents govern the HOA and unit ownership.
• Co-op: Corporate bylaws and the proprietary lease control occupancy and policies.

Governance and decisions

• TIC: The TIC agreement sets voting rules, and major decisions can require unanimous approval.
• Condo: The HOA operates under CC&Rs and bylaws with set voting thresholds.
• Co-op: A board has broad control and can screen buyers.

Financing availability

• Condo: Conventional, FHA, and VA financing are broadly available, subject to project rules.
• TIC: Financing exists but with a smaller lender pool and different product types.
• Co-op: Financing is possible through share loans but is specialized.

Marketability

• Condos tend to draw the largest buyer pool and often have easier resale.
• TICs have a smaller buyer pool because of financing limits and contract complexity.

Financing a TIC purchase

Financing a TIC is different from financing a condo. Fewer lenders offer TIC loans, and underwriting can be more detailed.

• Availability: A smaller number of lenders offer TIC products, including some local options.
• Down payment and terms: Many lenders ask for larger down payments than condos, commonly 20 to 30 percent or more. Rates can be slightly higher, and you can expect closer review of reserves and documents.
• Timing: Plan for extra time in escrow. Working with a lender who knows TICs is important.

Common loan structures

• Individual fractional mortgage: The lender places a mortgage on your fractional interest. Lenders often require specific lien language and may ask all owners to sign some documents.
• Master mortgage: Less common on new purchases, this is a single loan recorded against the whole property. If it exists, understand how it is serviced and what happens if there is a default.
• Co-borrower or guaranty requirements: Some lenders require all TIC owners to be on certain loan documents or to guarantee obligations.

What this means for you

• You should speak with a TIC-experienced lender early.
• Budget for a larger down payment and more documentation.
• Cash buyers have an advantage in some TIC situations, but financing is achievable with the right team and timeline.

Resale, value, and conversion

TICs can offer value, but they are a different market segment.

• Buyer pool: Smaller than condos because buyers must be comfortable with shared ownership and specialized loans.
• Price behavior: TICs have historically sold for less per square foot or taken longer to sell than similar condos, though results vary by building and market timing.
• Conversion potential: If a property can convert to condos in the future, it may add value. Conversion is not automatic and requires compliance with local and state rules.

Taxes, insurance, and maintenance

Taxes and assessments

Property tax treatment for TICs can be more complex than for condos. Transfers of fractional interests can trigger reassessment events. Clarify whether there is a single tax bill for the building or separate accounting for each owner, and how penalties are handled if someone falls behind.

Insurance and reserves

Most TIC buildings carry a master insurance policy that covers the structure and common elements. As an owner, you should carry your own policy for contents and liability. Review coverage limits, deductibles, and how special assessments for uninsured losses would be shared. Make sure the TIC agreement defines reserve levels and how capital repairs are funded.

Risks you must weigh

TICs require shared decision-making and shared responsibility. Understanding risk up front is essential.

• Shared responsibility: Depending on the setup, some obligations can be joint and several. Know who pays what and when.
• Foreclosure risk: If a master mortgage exists and goes into default, all owners can be affected. Clear language about defaults is critical.
• Disputes: Because governance is contract-based, disagreements about repairs, budgets, or tenants can happen. Many agreements require mediation or arbitration.

Due diligence checklist

Review these items before you write an offer on a TIC in Hayes Valley or any central San Francisco neighborhood:

Documents and contracts

• Recorded deeds showing TIC interests and percent shares
• Complete TIC agreement and any amendments
• Exclusive occupancy agreements for each unit
• Master mortgage or loan documents, if any
• Preliminary title report and any liens
• Master building insurance and suggested individual coverage
• Current budget, recent financials, and reserve schedule
• Minutes of recent owner meetings and any planned capital projects
• Any litigation history or pending disputes
• Rules for subletting, short-term rentals, and occupancy
• Any history of condo conversion efforts or restrictions

Property and permits

• Full home inspection, plus specialists as needed for roof, foundation, systems, and pest
• Permit history and code compliance through local records
• Egress and life-safety features, especially in older buildings

Financing and professionals

• Prequalify early with a lender who understands TICs
• Engage a real estate attorney with TIC experience to review documents
• Use a title and escrow company familiar with TIC transactions
• Consult a CPA or tax advisor about assessments and tax basis

Lifestyle and operations

• Owner-occupancy percentage and any occupancy rules
• Policies for guests, subleasing, and short-term rentals
• Management structure and the time commitment expected from owners

Pros and cons at a glance

Pros

• Often lower price than a comparable condo in the same area
• Access to classic pre-war buildings where condos are rare
• Flexible, contract-based governance among a small group of owners
• Strong community feel in many owner-occupied buildings

Cons

• Fewer lenders and larger down payments are common
• Smaller buyer pool can lengthen resale timelines
• Shared liability if a co-owner defaults on certain obligations
• More complex documents and contract risk than condos
• Insurance and reserve shortfalls can be pitfalls if you do not review them

How TIC ownership is structured

Below are simplified examples of common TIC setups.

Scenario A — Typical TIC with fractional loans

• Title: Owner A 40 percent, Owner B 30 percent, Owner C 30 percent on the deed
• Occupancy: Each owner has exclusive use of one unit by agreement
• Mortgages: Each owner holds a separate mortgage on their fractional interest
• Risk: Lenders may require cross-default clauses or multiple signatures

ASCII visual:

[Property parcel (single tax parcel)] / |
A(40%) B(30%) C(30%) (each holds fractional deed + occupancy agreement) Each may have its own TIC loan (with lender requirements)

Scenario B — Master mortgage on the whole property

• Title: Same fractional owners
• Mortgage: One loan recorded against the entire property, with guaranties or covenants
• Risk: Default on the master loan can affect all owners

ASCII visual:

[Property parcel] — Master Mortgage (Bank) / |
A(%) B(%) C(%) (Owners liable per TIC agreement or guaranty)

Scenario C — Condo conversion potential

• If the building converts to condos, each unit receives its own deed and financing tends to be more standard
• Conversion requires compliance with local and state rules and is not guaranteed

ASCII visual:

[Property parcel (pre-conversion TIC)] => [Condo map recorded] => [Unit A deed, Unit B deed, common elements]

Hayes Valley buyer tips

• Start with your lender. Get input on down payment, rate options, and underwriting timelines for TIC loans before you shop.
• Read the TIC agreement twice. Focus on reserves, repairs, subleasing, dispute resolution, and what happens if someone defaults.
• Check permits and building systems. Many Hayes Valley TICs sit in older buildings. Confirm life-safety, seismic work, and recent upgrades.
• Understand the occupancy history. Owner-occupancy levels can affect financing and values.
• Plan for community. You are joining a small ownership group that will make decisions together.

Work with a local advocate

Buying a TIC in Hayes Valley can open doors to architecture and location you love, at a price that may compare well to a condo. The tradeoff is added complexity in documents, financing, and shared governance. With the right guidance, you can recognize quality buildings, secure financing, and move forward with confidence.

If you are considering a TIC in San Francisco, partner with a team that blends neighborhood insight with disciplined execution. The Missy Wyant Smit Corporation brings a boutique, operations-driven approach to help you navigate strategy, pricing, and negotiation in the city’s core neighborhoods.

FAQs

What is a Tenancy in Common in San Francisco?

• A TIC is shared ownership of one property where you own a fractional interest in the whole building and an exclusive right to occupy one unit by agreement.

How is a TIC different from a condo purchase?

• In a condo, you own a separate deeded unit and share common areas through an HOA; in a TIC, your deed covers a fractional share of the entire property governed by a private contract.

Can I finance a TIC in Hayes Valley like a condo?

• Financing exists, but fewer lenders offer TIC loans, down payments often run 20 to 30 percent or more, and underwriting can take extra time.

What are the biggest risks of buying a TIC?

• Shared liability and governance disputes are key risks, especially if there is a master mortgage or weak reserves.

Do TICs usually cost less than condos?

• TICs have historically sold for less per square foot than comparable condos, but exact results vary by building, condition, and timing.

What documents should I review before making an offer on a TIC?

• Review the TIC agreement, occupancy agreements, insurance, reserves, title and loan documents, meeting minutes, and any permit or litigation history.