A TIC is a common form of ownership in SF whereby an owner occupies there own space exclusively of others within a building. Unlike condominiums TIC owners own a percentage of the building not the apartment per se. In terms of financing there is group or fractional financing available to prospective buyers.
Here is a great site that will provide insight on the topic by a well respected TIC attorney.
Let me know if you have any other questions.
McGuire Real Estate
TIC means tenants in common.
The other one that you might come across is fractional ownership.
David R. Indermill
Re/Max Hall Of Fame, CDPE | Since 1998 | Luxury Real Estate Advisor
International Referrals | Bank Owned Assets | Off Market Properties
Large Cash Investor Fast Close Network | B.R.E License # 01232827
Cell: 858-414-LIST (5478) Texting OK
As explained below TIC (Tenancy In common) is a way for two or more people to buy a property together. TIC are much more common in San Francisco, where prices are typically much higher. By purchasing at a TIC, you can pool your resources. For example if 3 people wanted to purchase a triplex, each buyer could live in one of the units, but you would all be on the loan for the entire building with each buyer have a fractional portion of the loan.
One challenge for TICs is lending. There are only a few lenders out there that will lend on a TIC. Re-sale can be a little challenging at times as well. In the above example if one of the buyers of the triplex wanted to sell their interest, the new buyer would have to be approved for the loan through the TIC lender.
TICs can be a great option, but understanding the process fully and also having a comprehensive written agreement regarding the TIC with all interested parties is very important.
Hope that helps!
Alain Pinel Realtors
Tenants in Common: Two or more people holding ownership concurrently, with the right to individually possess, will, or sell. This is undivided, but not necessarily equal interest.
Individual interests in group ownership. If there isn't another agreement, then the owners will share an equal interest in the property.
Interests MAY be unequal or equal. One person can own a larger share of the property than another. Undivided interest in the property. (Can't divide up the house or the property.) All owners have an interest (based on percentage of ownership) in the whole property.
There is a unity of possession in tenancy in common, which means that each owner has a right to possession and none can exclude the others nor claim any specific portion for himself alone.
No tenant in common can be charged rent for the use of the land unless otherwise agreed to by all the co-tenants.
One of the owners CAN sell one's interest WITHOUT getting approval of other owners.
Inheritable - Passes to heirs, not to other partners.
A TIC stands for tenancy in common. It is a way to own property. The owner of a TIC owns a fractional interest in a piece of property with other owners who also own fractional interests. In San Francisco TIC is a form of ownership that is often an alternative to condominium ownership. TIC's can be less expensive than condominiums because, among other reasons, it was difficult to get loans for them. But recently it has become easier to get loans for these properties.
Let me know if I can answer any other questions for you.
1. With a TIC you own a share in the entire building. When you buy into a co-op, you become a shareholder in a corporation that owns the property. As a shareholder, you are entitled to exclusive use of a housing unit in the property. With a condo you own 100% of your unit and a share in the common area.
2. With a condo you get your own tax bill. With a TIC you get one tax bill for the building and each owner (called co-tenant or co-owner) pays their share of the bill according to their percentage of ownership.
3. With a condo most lenders can finance. With a TIC only a select group of lenders will finance and the loan products are substantially more expensive, making reseal more complicated due to limited financing options.
4. The number of units in the building and eviction history have huge impact on ability to condo convert, rent a unit(s), and resale.
5. With TICs there is generally a lot more interactivity between the co-owners, which can lead to interpersonal frictions that are not as prevalent in condo situations.
6. Because the financing is more expensive a TIC should be less expensive than a similar sized condo in the same neighborhood.
An excellent resource for TIC info is http://www.andysirkin.com. If you'd like more in-depth info or explanations of the above feel free to call. Obviously we're happy to assist you in your purchase, but make sure whoever represents you knows this subject well. I suggest you interview several agents/brokers and find the one that fits you best.
If you are considering buying a TIC call me - there is a lot to consider, especially since there are new rules surrounding condo conversion.
Lance R. King – Broker/CEO
King Realty Group
BRE # 01384425
415.722.5549 - Cell
"The co-owners of an undivided interest in real property. Tenants in common each own a separate and undivided interest in the same real property and each has an equal right to the possession and use of the property. Upon the death of one tenant, his or her undivided interest passes to heirs through a probate proceeding; the interest does not pass to another tenant in common unless the surviving co-owner is an heir or a purchaser."
AmeriFirst Financial Inc.