Wondering if a TIC or a condo is the better fit for your San Francisco home search? You are not alone. The terms can feel similar, but the real differences show up in financing, ownership rights, ongoing costs, and resale. This guide gives you a clear, side-by-side look at what changes for you as a buyer or seller so you can move forward with confidence. Let’s dive in.
What you actually own
A condominium gives you fee simple ownership of an individually deeded unit plus a shared interest in the common areas. Each condo has its own legal description and you usually carry your own mortgage. In California, condos are governed by the Davis‑Stirling Common Interest Development Act, which sets standards for HOA budgets, reserves, disclosures, and owner rights.
A tenancy in common, or TIC, gives you an undivided fractional interest in the entire property. In San Francisco, each TIC co‑owner typically has a deed for a percentage interest paired with an exclusive occupancy agreement that assigns one unit for your use. There is no single statewide statute like Davis‑Stirling for TICs. Most rules come from the recorded TIC agreement, any related documents, and lender requirements.
Bottom line: a condo is a discrete unit with statutory HOA oversight. A TIC is a fractional interest plus a contract that gives you exclusive occupancy of a specific unit.
Financing and appraisal differences
Financing is the biggest divide for most buyers.
- Condos are widely financeable through conventional lenders. FHA and VA loans are often available if the condo project meets program approval standards. Rates and down payments can look similar to single‑family financing when the project qualifies.
- TICs are commonly financed by specialized lenders. Programs can require higher down payments, often 20 to 30 percent or more, higher rates, and more documentation. Lenders review the entire TIC structure, including the occupancy agreement and any cross‑default guarantees.
Appraisals also differ.
- Condo appraisals focus on your individual unit and comparable condo sales. That makes valuation more straightforward and often supports stronger financing options.
- TIC appraisals value a fractional interest plus the rights and limitations of the occupancy agreement. Because the buyer pool and financing are narrower, comparable sales can be limited, which can put downward pressure on appraised values compared to similar condos.
Practical impact: condos usually attract a broader buyer pool. TICs tend to limit buyers to those comfortable with the structure and able to qualify with niche lenders.
Resale and marketability in San Francisco
Condos are generally more liquid. They appeal to first‑time buyers, move‑up buyers, and some investors, with more financing options available. Project approval still matters, but the path is established.
TICs have historically offered a lower purchase price entry point, which can be attractive in high‑cost neighborhoods. That said, TICs can take longer to sell and may face a smaller buyer pool due to financing constraints and perceived complexity. Some TIC owners pursue condominium conversion to improve marketability.
Monthly costs, insurance, and property taxes
Your monthly outlay will look different depending on the structure.
- Condos have HOA dues that fund common area maintenance, insurance for the building structure, and reserves for future repairs. Reserve requirements and disclosures are part of Davis‑Stirling, so you have visibility into the building’s financial health.
- TICs charge monthly dues under the TIC agreement. These cover shared expenses such as building insurance, utilities, and maintenance. Reserve practices vary because they are contractual, not statutory. A single co‑owner’s default can create cash‑flow stress or trigger special assessments, depending on your agreement.
Insurance also changes.
- Condos usually carry an HOA master policy for the structure. You would typically carry an HO‑6 policy for interiors and personal property, and sometimes loss assessment coverage.
- TIC insurance can vary. Some buildings maintain a master policy, while others place more coverage on individual owners. Lenders often require specific endorsements given the shared structure and contractual arrangements among co‑owners.
Property taxes are assessed on your ownership interest in both cases. Condo units and TIC fractional interests are both subject to county assessment under California rules. For TICs, the assessor assigns value to each fractional interest. Conversions, transfers, and exchanges can have technical tax impacts, so it is wise to consult a tax advisor.
Governance and legal risk: what changes for you
Condo governance follows the Davis‑Stirling framework. HOA boards have fiduciary duties, voting and meeting rules, and clear procedures for notices, budget approvals, reserves, and dispute resolution. If an owner defaults on a mortgage, foreclosure typically affects only that unit. HOA liens for unpaid dues can also arise under state law.
TIC governance is contractual. Your TIC agreement defines voting rules, expense allocations, house rules, sale procedures, and remedies for defaults. The consequences of a co‑owner default are often more complex. Some TIC agreements include cross‑collateralization or guarantees that can expose other owners. Even without guarantees, practical issues like shared utilities can make resolutions time‑consuming.
San Francisco tenant protections operate independently of ownership type. The city’s rent ordinance applies based on factors like construction date and use. Converting a building or changing title does not automatically remove tenant protections if the unit remains a rental. For details on rent control eligibility, evictions, and buyouts, consult the San Francisco Rent Board and Planning Department guidance.
Converting a TIC to a condo in San Francisco
Many owners pursue conversion to improve financing and resale. Conversion typically involves preparing a condo declaration and subdivision map, meeting local planning and building codes, restructuring title so each unit has its own legal description, and obtaining new mortgages as needed. Title, survey, potential upgrades, and city filing costs can add up. Your TIC agreement may require unanimous or near‑unanimous consent to proceed, so alignment among co‑owners is key. Local agencies such as the San Francisco Planning Department and the Assessor‑Recorder’s office can outline the procedural steps and requirements.
Buyer checklists
If you are considering a TIC
- Review the full TIC agreement and occupancy agreement, plus recorded deeds for all co‑owners.
- Confirm financing options early with lenders experienced in TICs. Ask about minimum down payment, rates, and required documentation.
- Review budgets, shared expenses, any reserve funds, recent special assessments, and the history of owner defaults.
- Understand rules on renting your unit and any right of first refusal or buyout terms.
- Confirm a title company will insure your fractional interest and identify any endorsements needed.
If you are considering a condo
- Review the HOA budget, reserve study, CC&Rs, bylaws, meeting minutes, insurance certificates, and any pending litigation.
- If you plan to use FHA or VA financing, confirm the project’s eligibility early.
- Ask about rental policies and investor concentration, which can affect financing and insurance.
Seller essentials
Selling a TIC interest
- Disclose the TIC agreement, budgets, insurance, any co‑owner disputes, and known defaults.
- Prepare for longer market times and a narrower buyer pool. Pricing and upfront buyer education matter.
- If your group is open to it, analyze whether condominium conversion could improve your net proceeds relative to its costs and timeline.
Selling a condo
- Provide Davis‑Stirling disclosures promptly and keep HOA documents organized.
- Anticipate buyer questions on reserves, special assessments, and any litigation.
- Coordinate presentation and timing to align with project approval windows for buyers using FHA or VA.
Which path is right for you
Choose a condo if you value wider financing options, a simpler appraisal and title process, and a broader resale market. This structure suits many first‑time buyers and move‑up buyers who want clarity on HOA governance and reserves.
Choose a TIC if you are comfortable with a contractual structure, can meet higher down payment or niche lender requirements, and want an entry point that may offer a lower purchase price in certain neighborhoods. Be sure you are aligned with your co‑owners and confident in the TIC agreement’s protections.
If you are weighing a TIC with an eye toward future conversion, factor in the legal steps, costs, lender re‑underwriting, and the consent needed among all owners.
Ready to compare real options in your price range or talk through financing and resale tradeoffs? With lending and title experience plus access to Compass tools, I can help you evaluate the right path and connect you with TIC‑savvy lenders, attorneys, and title teams. Get in touch with Daniel Flores. Get in touch. Available 24/7.
FAQs
What is the core difference between a TIC and a condo in San Francisco?
- A condo is an individually deeded unit governed by an HOA under the Davis‑Stirling Act, while a TIC is a fractional interest in the whole property paired with a contractual right to occupy a specific unit.
Can you use FHA or VA financing to buy a San Francisco TIC?
- Often no. FHA and VA financing are more commonly available for eligible condo projects, while TICs usually rely on specialized lenders with stricter terms.
How could a co‑owner default impact you in a San Francisco TIC?
- It depends on the TIC agreement, but cross‑default provisions or shared obligations can expose other owners and complicate resolution beyond what you see in condo structures.
Are rent control rules different for TICs versus condos in San Francisco?
- Tenant protections depend on local law and building specifics, not ownership type alone. Changing to a TIC or condo does not automatically remove rent control if the unit remains a rental.
What does it take to convert a San Francisco TIC to a condo?
- You will need legal mapping and declarations, compliance with local codes, title restructuring, possible building upgrades, lender re‑underwriting, and broad co‑owner consent per your agreement.
Which is usually cheaper upfront in San Francisco: a TIC or a condo?
- TICs often have lower purchase prices but can require higher down payments and may carry higher interest rates, while condos tend to have broader financing options that support pricing and liquidity.
