Tenancy in Common in San Francisco: The Complete Buyer's Guide
A tenancy in common (TIC) is a form of co-ownership where multiple buyers hold percentage interests in a single property rather than owning individual units outright. In San Francisco, TICs account for a significant share of the housing market because the city's older multi-unit buildings were never subdivided into condos — and converting them has become increasingly difficult.
This guide covers how TIC ownership works, the differences between TICs and condos, financing options, the risks and advantages, and what to ask before making an offer.
What Is a Tenancy in Common in San Francisco?
A tenancy in common (TIC) is a co-ownership arrangement where multiple buyers hold undivided percentage interests in a single property. You don't own your specific unit. Instead, you own a share of the entire building, and a written TIC Agreement grants you the exclusive right to occupy one particular unit.
Think of it this way: if you buy a 25% TIC interest in a four-unit Victorian, you own one-quarter of the whole building, not the second-floor flat you live in. The TIC Agreement is what says you get to live in that flat and spells out how you and your co-owners make decisions together.
- Undivided interest: Your ownership is a percentage of the whole property, not a deed to your individual unit
- TIC Agreement: The legal document that assigns your unit, sets voting rules, and governs everything from repairs to resale
- Shared responsibility: All owners split property taxes, insurance, and maintenance
Why TICs Are Common in San Francisco
San Francisco's housing stock is old. Many of the city's Victorian and Edwardian multi-unit buildings were built decades before California created condominium laws, so they were never subdivided into individual units with separate deeds.
On top of that, the city has dramatically limited how many buildings can convert to condos. San Francisco's condo conversion lottery has been suspended since 2013, and the Expedited Conversion Program was put on hiatus in 2020 with a projected return that has not materialized as of 2025–2026. TICs emerged as a workaround, letting buyers purchase into multi-unit buildings without waiting years for conversion approval.
TICs sell most frequently in popular neighborhoods where condos are much more expensive: Noe Valley, Mission Dolores, the Mission, the Haight, Lake Street, Nob Hill, and NoPa. For many San Francisco buyers, a TIC is the only realistic path to ownership in these neighborhoods.
TIC vs. Condo Ownership in San Francisco
The core difference is what you actually own. Condo owners hold title to their individual unit plus a share of common areas. TIC owners hold a percentage of the entire building, with their right to occupy a specific unit defined only by the TIC Agreement.
This distinction affects financing, resale, and day-to-day autonomy. A condo gives you a deed to a specific unit that is straightforward for title insurance and resale; buyers and lenders view this as standard ownership. A TIC gives you a fractional interest in the whole property and relies on the TIC Agreement to define your exclusive-use unit and rules — which makes title more complex and requires careful review.
| Factor | TIC | Condo |
|---|---|---|
| What you own | Percentage share of entire building | Your specific unit plus common area share |
| Deed | One deed for whole building (shared) | Separate deed for your unit |
| Financing | Fractional TIC loan (specialized lenders) | Standard mortgage |
| Property tax | Single bill for entire building | Individual tax bill per unit |
| Governance | TIC Agreement | CC&Rs and formal HOA |
How TIC Financing Works
TIC financing is different from a standard mortgage because the property has one deed shared among all owners. You can't get a conventional loan on a TIC the way you would on a condo. Fractional TIC loans are non-conforming, which means they don't fit standard Fannie Mae or Freddie Mac programs and are typically kept on the lender's books — leading to fewer loan choices and more conservative terms than a comparable condo mortgage.
Group Loans (Legacy Structure)
With a group loan, all owners share one mortgage on the entire building. Each owner pays their portion monthly, but if one owner stops paying, the remaining owners are liable for covering the shortfall. A default by one co-owner on a group loan can trigger foreclosure on the entire building. Group loans were the traditional financing method for TICs. In practice, nobody buys a TIC building this way anymore — fractional financing has become the standard.
Fractional Loans (Current Standard)
Fractional loans are individual mortgages secured by your TIC interest rather than the whole building. TIC fractional loans are available from a handful of specialized lenders including NCB, Meriwest, Bank of Marin, Bank of San Francisco, and Redwood and Patelco Credit Unions, with interest rates currently running in the 6–7% range for an 80% loan-to-value.
The advantage is that your loan is separate from your co-owners' loans, so their default doesn't directly threaten your ownership. If one co-owner defaults, the lender's remedy is limited to that owner's fractional interest — the lender can foreclose on the defaulting share without taking the entire building. The tradeoff is higher interest rates and fewer lender options than conventional mortgages.
The good news: 30-year fixed mortgages on TIC loans are now available, which offers more flexibility than the adjustable-rate mortgages that used to be the only option. The rate difference between a TIC and a conventional loan is now roughly a half percentage point.
All-Cash TIC Purchases
Some buyers purchase TICs with cash to sidestep financing complexity entirely. Cash offers are especially attractive to TIC sellers because they eliminate lender delays and appraisal contingencies.
Advantages of Buying a TIC in San Francisco
Lower Purchase Price Than Comparable Condos
TICs in 3+ unit buildings typically sell for about 20% less than comparable condos in the same neighborhood. The discount reflects the financing complexity and smaller buyer pool. In a market where studio condos cost $800K or more, sharing ownership of a larger property through a TIC can put ownership within reach for buyers who would otherwise be priced out.
Entry Into Desirable SF Neighborhoods
TICs are concentrated in some of San Francisco's most sought-after areas: Noe Valley, the Mission, Hayes Valley, Pacific Heights. In these neighborhoods, condo inventory is limited and single-family homes are priced well into the millions. A TIC can be the realistic entry point.
Potential Path to Condo Conversion
Some TIC buildings can eventually convert to condos. Two-unit buildings qualify for a bypass conversion — without entering a lottery — if both units have been owner-occupied by separate individuals for at least one year. Conversion typically increases unit values because condos are easier to finance and sell. That said, buyers aren't currently purchasing TICs in 3+ unit buildings with the goal of condo converting — the lottery suspension has made those efforts unrealistic for most buildings.
Prop 13 Tax Benefits on Older Buildings
Because the entire TIC building is assessed as one parcel under Prop 13, when you buy a TIC interest, only your portion is reassessed to current market value — the rest of the building retains its existing assessed value. This can result in lower property taxes than buying a newly converted condo where every unit is individually reassessed.
Risks and Drawbacks of TIC Ownership
Financing Complexity and Higher Rates
TIC loans are offered by fewer lenders, with stricter underwriting. Expect tighter requirements on down payment, reserves, and documentation. FHA and VA loans are generally not available for TIC interests, which limits your buying power and reduces the future buyer pool when you resell.
TIC Agreement Restrictions
TIC Agreements often include rules that limit what you can do with your unit. Common restrictions include prohibitions on subletting, requirements for co-owner approval before selling, and limits on renovations. A good TIC agreement is essential — it should address everything from how shared financial obligations are allocated, to what happens if someone defaults, to how disputes are resolved. Having a real estate attorney review it before making an offer is worth the cost.
Slower Resale and Smaller Buyer Pool
When you sell a TIC, your buyer pool is limited to people who can obtain TIC financing or pay cash. TIC agreements may also include rights of first refusal or approval requirements for new buyers, which can add time to a sale. This typically means longer time on market and less competitive bidding compared to condos.
Rent Control Exposure
TICs have the most stringent form of San Francisco rent control. Unlike with condos, you generally cannot raise the rent on a TIC unit or remove a tenant unless they choose to leave. If you're buying a TIC with any tenant occupancy, review this carefully with an attorney before making an offer.
How TIC Values Appreciate Compared to Condos
TICs generally appreciate more slowly than condos because of the financing hurdles and smaller resale market. When the market goes down, TICs tend to take a bigger hit than single-family homes or condos. The gap narrows if the building converts to condo status, which unlocks conventional financing and expands the buyer pool significantly.
If you're buying a TIC as a long-term home, slower appreciation may matter less than the upfront savings. If you're planning to sell within a few years, factor in that your equity growth may lag behind comparable condos.
Converting a TIC to a Condo in San Francisco
San Francisco's condo conversion process is complex and has been largely inaccessible since the conversion lottery was suspended in 2013. The Expedited Conversion Program was put on hiatus in 2020, and a projected return in 2024, 2025, or 2026 has not materialized as of this writing.
The main remaining pathway is the two-unit bypass: two-unit buildings where each unit is owner-occupied by a separate individual for at least one year are eligible to apply for conversion without entering a lottery, regardless of the lottery's suspended status. Conversion requires unanimous agreement among all TIC owners and city approval, and the process can take over a year. Don't buy a TIC expecting a quick conversion — especially in buildings with three or more units.
Questions to Ask Before Buying a TIC
What type of loan does the building currently have? Fractional or group loan structure affects how much financial risk you share with co-owners. Most buildings today have fractional loans, but confirm before you proceed.
What restrictions does the TIC Agreement contain? Review rules on subletting, pet ownership, renovations, resale approval, what happens if a member dies or declares bankruptcy, and how disputes are resolved. Some agreements require unanimous consent for major decisions, which can create friction down the road.
How are reserves and shared expenses managed? Healthy TIC buildings maintain reserve funds for repairs and capital expenses. Ask about current reserve balances and how costs are divided among owners.
Is the building eligible for condo conversion? Ask whether the building is a two-unit bypass candidate or whether it would need to wait for the lottery to return. This affects long-term value.
What is the payment history of current owners? A history of conflict or missed shared assessments is a red flag.
Are there any existing tenants in the building? Tenant occupancy significantly affects rent control exposure and any future conversion plans.
How to Make a Competitive Offer on a TIC
Get pre-approved with a TIC-friendly lender first. Standard mortgage pre-approvals don't apply to TICs. Connect early with a local lender who regularly closes TIC loans — TIC lenders have longer underwriting timelines and require TIC-specific documentation.
Review the TIC Agreement before making an offer. Title companies and lenders will closely review the TIC agreement, exclusive occupancy description, and any subdivision-related approvals. Surprises in the agreement — like restrictions on renting or approval requirements on resale — can affect your ability to use or exit the property. Have a real estate attorney review it before you commit.
Understand your true cost of ownership. When you factor in the TIC discount against the slightly higher loan rate, the net difference in monthly cost is often smaller than buyers expect — which is why most TIC buyers end up in a TIC because they fell in love with a specific property, not because they were specifically looking for a TIC.
Ready to Talk Through a TIC Purchase?
TIC transactions involve the same work as condo purchases — disclosure review, offer strategy, negotiation, and closing support — but with additional complexity around the TIC Agreement, financing structure, and building financials. Having an agent who knows what to look for, and when to bring in a specialized attorney, makes a real difference.
If you're looking at a TIC in San Francisco and want to talk through what the ownership structure means for your specific situation, let's talk.
Frequently Asked Questions About TICs in San Francisco
Is a TIC a good investment in San Francisco?
TICs can be a solid entry point for buyers priced out of the condo market, though they appreciate more slowly and have a smaller resale pool. Fractional TIC mortgages have become the preferred option in recent years, making TIC ownership more viable and accessible than it used to be. Suitability depends on your timeline, rental plans, and comfort with co-ownership complexity.
Can you rent out a TIC unit in San Francisco?
Most TIC Agreements restrict or prohibit subletting to maintain owner-occupancy. And if you do rent, TICs are subject to the most stringent form of San Francisco rent control — you generally cannot raise the rent or remove a tenant who chooses to stay. Check the specific agreement and consult an attorney before assuming you can rent your unit.
Do TIC purchases qualify for FHA or VA loans?
FHA and VA financing is generally not available for TIC interests, as these programs typically require individually deeded condominium units. Confirm with your lender upfront.
How much down payment is required for a TIC purchase?
TIC fractional loans are available for up to 80% loan-to-value, meaning a minimum 20% down payment is common, though requirements vary by lender and loan type. Some programs may require more.
What happens if a TIC co-owner stops paying their mortgage share?
With a fractional loan, the defaulting owner's lender can only foreclose on that owner's individual interest — your ownership is protected. Co-owners still share common obligations like property taxes, insurance, reserves, and building maintenance, so a co-owner falling behind on shared assessments can create pressure even with fractional financing.
Caley Zheng is a San Francisco real estate agent specializing in buyer representation across the city's most competitive neighborhoods. She has access to pre-market and off market listings through the Top Agent Network, the Side brokerage network, and a trusted network of agent relationships across San Francisco.
