Thinking about buying in San Francisco and seeing both TICs and condos pop up in your search? You are not alone. The differences can be confusing, especially around financing and resale. The good news: once you understand how each works in San Francisco, you can choose with confidence. In this guide, you will learn the key differences, how local rules come into play, what lenders look for, and the practical steps to vet any unit before you make an offer. Let’s dive in.
TIC vs condo basics
What is a TIC?
A tenancy-in-common, or TIC, is co-ownership of an entire property. You own an undivided fractional interest in the whole building and gain the right to occupy a specific unit through a private TIC agreement. There is no separate parcel for your unit. The TIC agreement sets rules for expenses, occupancy, dispute resolution, and sale provisions.
What is a condo?
A condominium is a legal subdivision of a building into separately titled units, each with its own deed and parcel. You also own a fractional interest in the common areas through a homeowners association, or HOA. Condos are governed by recorded documents like CC&Rs and bylaws, and by state law known as the Davis-Stirling Act in California.
Key differences at a glance
- Title: Condo equals a deed to your unit. TIC equals a deed to a fractional share of the building plus an occupancy agreement for your unit.
- Governance: Condo rules flow from recorded CC&Rs and state statute. TIC rules come from a private agreement among co-owners.
- Financing: Condo loans are widely available. TIC loans exist but come from a smaller group of lenders with stricter terms.
- Resale: Condos tend to have a larger buyer pool. TICs can sell at a discount compared to similar condos because of financing and market familiarity.
San Francisco rules that affect you
State framework
In California, condos are regulated as common interest developments under the Davis-Stirling Act. That statute sets required disclosures, governance standards, budget and reserve rules, and buyer protections. TICs are not governed by Davis-Stirling. Your rights and duties are set by the recorded TIC agreement and related documents.
City protections and conversions
San Francisco has local ordinances that affect rental conversions, tenant protections, and condominium conversion procedures. If you are considering a TIC with hopes of converting to condos later, understand that conversion involves city approvals, compliance with planning and building rules, and potential tenant-related requirements. Strong tenant protections and the local Rent Ordinance can affect buildings with rent-controlled tenants. Always check the status of tenants and consult local resources before assuming conversion is possible.
Financing: what to expect
Condo financing
Most conventional lenders finance condos, underwriting the borrower and the unit. Many condo buyers use conventional loans, and some projects may qualify for FHA or VA financing if the project meets those programs’ approval rules. Project eligibility, budget health, and insurance in place can affect your loan options and rate.
TIC financing
TIC loans have historically been harder to secure. Fewer lenders offer them, underwriting can be stricter, and terms may require higher down payments than condos. Some TICs use individual loans secured by an undivided interest with TIC riders, while others have a shared master mortgage for the whole building. Your risk profile depends on how the debt is structured.
Down payments and lender pool
As a general pattern, TIC buyers should be prepared for higher down payment expectations and a smaller lender pool. Condos often allow lower down payments through conventional or government-backed programs, subject to project approval. For TICs especially, it pays to speak with lenders who actively originate TIC loans in San Francisco so you can compare rates, down payment needs, and documentation requirements.
Title, insurance, and monthly costs
Title and documents
Buying a condo means you receive a deed to a specific unit, and title insurance is handled in a standard way. With a TIC, title is more nuanced. You will want to review the recorded TIC declaration, the TIC agreement, occupancy agreements, and any master mortgage documents. Confirm who holds the mortgage, whether there is any cross-default language, and what happens if a co-owner defaults.
Insurance and earthquake
Condo buildings typically carry a master HOA policy for the structure and common areas, while individual owners carry an HO-6 policy for interior improvements, personal property, and liability. TICs often arrange a building policy via the association, and owners carry individual coverage for their unit and liability. Earthquake coverage in the Bay Area is usually a separate purchase for either ownership type. Review what the master policy covers, deductibles, and any earthquake provisions.
Monthly dues and reserves
Condo owners pay HOA dues, which fund operations, insurance, and reserves for future repairs. California law requires specific disclosures on budgets and reserves. TIC owners pay association or maintenance fees that cover shared expenses. Reserve planning in TICs may be less formal, so read the TIC agreement carefully and look for a clear budget, reserve approach, and any recent or planned special assessments.
Property taxes and reassessment
Both condos and TICs are subject to California’s property tax rules, including reassessment when there is a change in ownership. Changing the form of ownership, like converting from TIC to condo, can trigger reassessment events. Review recent tax bills, ask about any pending reassessments, and confirm details with local authorities or your title company.
Resale and marketability
Buyer pool and liquidity
Condos generally draw a wider buyer pool, including more financing options and potential buyers using FHA or VA when a project is approved. TICs attract a more targeted buyer set, often those comfortable with the structure or buyers prioritizing location and price. The smaller pool and financing complexity are the main reasons TICs can be priced below similar condos.
TIC-to-condo conversion
Many TIC owners aim to convert to condos over time to make resale easier and boost marketability. Conversion requires owner consent, legal subdivision work, and municipal approvals. Costs, timelines, and tenant-related requirements can vary, and not all buildings qualify. If conversion is part of your plan, ask for any documented plans, prior attempts, and professional estimates for steps and costs.
Co-owner risk and governance
In some TICs, a shared master mortgage means all owners are on the same loan. If one co-owner defaults, others can be exposed to risk. Even with individual TIC loans, cross-default provisions can create shared exposure. Condos separate mortgage responsibility at the unit level, though HOA dues remain a shared obligation. In any TIC, the quality of the agreement matters. A clear, well-drafted TIC agreement can reduce disputes and protect resale value.
Buyer checklist for SF units
Documents to request
- Recorded deed and legal description
- Current title report and title insurance commitments
- For TICs: recorded TIC declaration and agreement, occupancy agreements, allocation schedules, and any master mortgage documents
- For condos: CC&Rs, bylaws, HOA meeting minutes, current budget, reserve study, insurance summary, and any special assessment history
- Building condition and inspection reports, termite reports, and earthquake retrofit history
- Property tax bills and any reassessment notices
Questions to ask sellers and the association
- Is it recorded as a TIC or a condo, and are all documents current and recorded?
- Who holds the mortgage or mortgages? Is there a shared master mortgage?
- What are the exact monthly dues, and are any special assessments planned?
- Are there delinquencies, liens, or pending lawsuits affecting the property?
- What are the rental policies and current tenant status? Do any local tenant protections apply that could affect occupancy or conversion?
- Has the building attempted condo conversion before, and what is the status?
- What does the master insurance policy cover, and what are the deductibles? Is earthquake coverage in place?
- For TICs: What are the sale and buy-sell provisions, rights of first refusal, and default remedies?
Questions to ask lenders and title/insurance pros
- For TICs: Which loan programs are available today, and what are typical down payment and documentation needs?
- For condos: Is the project eligible for conventional lending without extra project approvals? Any restrictions to be aware of?
- What title endorsements will be required, and are there exceptions tied to the TIC agreement?
- What individual policies do you need, including HO-6 and earthquake, and what are the estimated premiums?
Red flags to watch for
- Missing or unrecorded condo or TIC declarations
- A shared master mortgage with late payments or high delinquencies
- Thin reserves and repeated special assessments
- Active or pending litigation involving the building
- Vague TIC agreements with broad cross-default language or unclear dispute resolution
- Complex rent-control or tenant issues that affect occupancy or conversion
How to decide: Which fits your goals?
If you want broad financing options, a larger buyer pool at resale, and a predictable governance framework, a condo may fit better. If you are comfortable with a smaller lender set, value price savings relative to nearby condos, and accept the added diligence of reading a private co-ownership agreement, a TIC can be a smart path into a great location.
Think about your time horizon too. If you plan to hold long term and the TIC agreement is strong, the structure may serve your goals well. If you want maximum resale flexibility in the near term, a condo’s individual title and market familiarity can reduce friction.
Talk to a local team
Choosing between a TIC and a condo is not just a legal decision. It is about how you live, how you finance, and how you plan to exit. Our family-run team helps you weigh tradeoffs, read the fine print, and align your financing. If you want coordinated guidance on both purchase and mortgage options, reach out to Now Homes for a focused, local consultation.
FAQs
What is the main difference between a TIC and a condo in San Francisco?
- A condo gives you a deed to a specific unit with an HOA, while a TIC gives you an undivided share of the whole building plus a private agreement for your unit.
Can you get a conventional mortgage on a TIC in San Francisco?
- Some lenders provide TIC loans, but the lender pool is smaller and requirements are often stricter than for condos, with higher down payments common.
Do HOA or TIC fees cover earthquake insurance in San Francisco?
- Not always. Earthquake coverage is often separate for both condos and TICs. Review the master policy and consider your own earthquake policy.
How does condo conversion work for a TIC in San Francisco?
- Conversion requires owner consent, legal subdivision steps, and city approvals, and can involve tenant-related rules. Timelines and costs vary by building.
Are TICs cheaper than condos in San Francisco?
- TICs often sell below comparable condos due to financing complexity and a smaller buyer pool, though exact price differences vary by market and building.
