Trying to decide between a TIC and a condo in San Francisco? You’re not alone. The two options look similar from the outside, but they work very differently when it comes to ownership, financing, monthly costs, and resale. By the end of this guide, you’ll understand the core differences, what to look for during due diligence, and how to choose the path that fits your goals. Let’s dive in.
Quick definitions: TIC vs condo
What is a TIC?
A Tenancy in Common, or TIC, means you and other buyers own undivided fractional interests in one legal parcel. Your deed shows a percentage of the entire property, and a private TIC agreement spells out your right to exclusively occupy a specific unit. House rules, management addenda, and the TIC agreement govern daily life, expenses, and decision-making.
In San Francisco, many TICs began in older multifamily buildings where owners wanted a way to hold individual interests without creating a formal condominium. Your rights and responsibilities flow from the TIC agreement, not from an HOA’s CC&Rs.
What is a condo?
A condominium gives you fee ownership of a specific, separately deeded unit plus a share of the common areas. The project is defined by a recorded Condominium Plan and CC&Rs, with Bylaws and Rules & Regulations managed by an HOA. Each unit has its own title, which generally makes condos simpler for standard mortgage underwriting and individual resale.
Financing and monthly costs
Financing at a glance
- Condos: You usually have access to standard mortgage products if the project meets lender and insurer rules. Lenders will request project documents, such as a condo questionnaire, and may consider things like reserves, litigation, and owner-occupancy.
- TICs: Financing is more specialized. Fewer lenders offer TIC loans, down payments are often higher, and underwriting reviews the TIC agreement, building structure, and any master mortgage. It’s important to work with a lender experienced in TICs and to confirm, early, that they will underwrite the specific property.
Upfront and monthly payments
- Down payment and closing costs: Condos often allow low down payment options through more common loan programs, depending on project approval. TIC buyers typically need larger down payments and should plan for a smaller set of lender options.
- Monthly costs: Both structures include principal and interest on your loan. For condos, monthly HOA dues fund building insurance for common elements, reserves, and shared services like exterior maintenance. For TICs, the TIC agreement defines each owner’s share of common expenses, and you may see a monthly TIC fee for insurance, shared utilities, reserves, management, and any master mortgage payments.
- Insurance: Condo owners usually carry an HO-6 policy for interior items and improvements, while the HOA maintains a master policy. TIC insurance varies by building. There is often a master policy, but you must confirm what it covers, the deductibles, and what you need to insure individually.
Taxes, title, and prechecks
- Property taxes: In California, Prop 13 generally sets the base-year value at purchase and limits annual increases until a change in ownership triggers reassessment. TICs and condos both follow these rules. For questions on reassessment, conversions, or changes in ownership, consult the San Francisco County Assessor.
- Title and title insurance: Condo title is straightforward because units are separately deeded. TIC title involves fractional ownership in the entire parcel, so underwriting can be more complex. Work with a title company experienced with TICs and get a title commitment early.
- Lender preapproval: Whether you are buying a TIC or a condo, get preapproved with a lender who can underwrite that specific building. For TICs, ask your lender exactly which documents they will need, what down payment they require, and whether any co-owner signatures or approvals are needed.
Resale, buyer pool, and condo conversion
Buyer pool and liquidity
- Condos: Because condos are individually titled and supported by standard mortgage products, they tend to attract a wider buyer pool. This typically helps marketability and can reduce time on market.
- TICs: The buyer pool is smaller. TICs often sell at lower price points than comparable condos, but financing can be more limited and down payment needs can be higher. This affects market liquidity, so plan for a more targeted audience and a potentially longer marketing period when you sell.
Resale logistics and approvals
- Condos: Resales typically involve HOA document review and standard transfer steps. You usually do not need consent from other individual owners, beyond normal association processes.
- TICs: Your TIC agreement may include co-owner approval rights, rights of first refusal, or buyer screening provisions. These steps can add time and coordination to closing. Title and escrow will review the TIC documents, and your lender may require certain clauses or clarifications before issuing final approval.
Condo conversion in San Francisco
Many TIC owners consider conversion to condos to gain separate unit titles and improved financing and resale options. In San Francisco, conversion is a legal and municipal process that requires compliance with local ordinances, applications to the Planning Department, possible tenant protections, and recorded documents such as a Condominium Plan.
You should also plan for potential costs, which can include city fees, legal and engineering work, physical upgrades, and, where applicable, tenant-related obligations. Successful conversion can improve marketability, but timelines and requirements vary. Conversion and changes in title can also trigger tax reassessment; consult the County Assessor and a real estate attorney who handles conversions before you rely on conversion as part of your strategy.
Governance and key risks
How decisions get made
- Condos: An HOA, run by an elected board, manages budgets, reserves, rules, and building decisions under recorded CC&Rs and Bylaws. State law sets standards for governance and fiduciary duties.
- TICs: The TIC agreement is a private contract among owners. Decision-making, voting thresholds, cost-sharing, and dispute resolution live in that document. Some choices may require a majority, supermajority, or unanimous consent. Read it closely.
Common TIC risks to watch
- Co-owner conflict: Because governance is contractual, deadlocks or disputes can be more disruptive if the agreement is unclear.
- Financing constraints: Fewer loan options and higher down payment requirements can reduce your future buyer pool.
- Title and encumbrances: Fractional interests and unusual encumbrances require careful title review. If there is a master mortgage and a co-owner defaults, the consequences can affect the entire building.
- Transfer limits: Rights of first refusal or consent requirements can slow or limit resale options.
Common condo risks to watch
- HOA financial health: Limited reserves or deferred maintenance can lead to special assessments. Review budgets, reserve studies, insurance, litigation disclosures, and meeting minutes.
- Use rules: Rental limits or project deficiencies can affect your plans and financing options. Read the CC&Rs, Rules & Regulations, and any recent HOA communications.
How to choose: a simple framework
- Choose a condo if you want the most straightforward financing, a broad future buyer pool, and clearly defined, separate title to your home.
- Choose a TIC if you prioritize a lower purchase price per unit and are comfortable with specialized financing, contract-based governance, and a smaller future buyer pool.
- Considering conversion: If conversion to condo is part of your plan, evaluate feasibility with an attorney and verify city requirements before you buy. Model the time, cost, and tax implications along with potential upside.
Buyer due diligence checklist
For both TICs and condos
- Review recorded liens, judgments, and any master mortgages affecting the property.
- Confirm current property tax basis and any pending reassessment issues.
- Inspect building condition and review maintenance history.
- Verify insurance coverage and deductibles at both the building and unit levels.
- Ask about any pending litigation that could affect financing or value.
TIC-specific items
- Obtain and have a real estate attorney review the TIC Agreement or Declaration of Trust.
- Confirm lender options and secure a preapproval from a lender who regularly closes TIC loans.
- Understand consent requirements, rights of first refusal, and the process for approving buyers.
- Learn how common expenses are allocated, how reserves work, and how capital calls are handled.
- Clarify mortgage structures: Are there individual fractional loans or a master mortgage? What happens if an owner defaults?
Condo-specific items
- Review the recorded Condominium Plan, CC&Rs, Bylaws, and Rules & Regulations.
- Scrutinize HOA financials, reserve studies, insurance declarations, and meeting minutes.
- Check for rental restrictions, special assessments, or known project issues.
- If you plan on government-backed financing, verify whether the project meets program approval requirements.
Bringing it all together
Both TICs and condos can be smart paths to San Francisco homeownership. Your best choice depends on your financing plan, risk tolerance, and how you value marketability and governance. If you want ease of financing and a wider buyer pool, a condo is usually the simpler route. If you prioritize a lower entry price and you are comfortable with a contract-driven ownership structure, a TIC can be compelling.
When you are ready to compare live options, work with a team that can unpack the documents, coordinate lenders and title, and set up a clean timeline from offer to close. If you want a calm, organized guide through TIC and condo choices, reach out to Apsara Oswal for a focused San Francisco strategy.
FAQs
Which is easier to finance in San Francisco: a TIC or a condo?
- Condos are usually easier because they are individually titled and meet standard lender requirements more often; TIC loans exist but are offered by fewer lenders and often require larger down payments.
Are TICs cheaper than condos in San Francisco?
- TIC shares frequently sell at lower price points compared to similar condos, but you should weigh financing limitations, potential resale challenges, and any conversion costs.
Can I convert a TIC to a condo in San Francisco?
- Yes, conversion is possible but requires a formal legal and municipal process, fees, and time; verify feasibility with the Planning Department and an experienced real estate attorney before counting on it.
Do TIC rules affect rentals or tenants in San Francisco?
- Tenant protections and rent control rules can apply depending on the building and occupancy; consult the San Francisco Rent Board and a local attorney for specifics.
Which professionals should I engage for a TIC or condo purchase?
- Work with a lender experienced in the specific property type, a real estate attorney for TIC agreements or conversion review, a title company familiar with TICs, and a tax advisor for property tax and deduction questions.
