Tenancy in Common Explained for California Buyers

What Is a TIC?

If you’re exploring homeownership in San Francisco or Los Angeles, you may have come across listings for TIC properties. They often look like condos, but the price is usually lower, sometimes 10–20% less than comparable condos. So what exactly is a Tenancy in Common (TIC), and why are they becoming more popular in California’s competitive housing markets?

This guide will explain TIC ownership, the benefits and risks, and why a strong TIC agreement (reviewed by an attorney) is essential. And if you want to know about loan programs that let you buy a TIC with just 15% down and loan amounts up to $2 million, be sure to read our full blog on TIC financing for San Francisco and Los Angeles buyers.

What Is a Tenancy in Common (TIC)?

A Tenancy in Common (TIC) is a type of property ownership where two or more buyers share ownership of an entire building. Instead of holding a deed to your individual unit (as you would in a condo), you own a percentage share of the whole property.

Through a TIC agreement, each owner has the exclusive right to occupy a specific unit. For example, in a 3-unit building sold as a TIC, three owners would each hold a share of the building but live in their own designated units.

TICs vs. Condos

At first glance, TICs and condos seem similar, but their structures are different:

Feature	Condominium	Tenancy in Common (TIC)
Ownership	Individual deed to your unit	Shared ownership of the entire property
Legal Document	Condo map & HOA rules	TIC agreement
Financing	Conventional mortgages widely available	Specialized TIC loans required
Price	Higher, condo premium	Lower, usually 10–20% less

 

Want to see how TIC buyers can qualify with only 15% down payment instead of 25–30%? Check out our TIC financing blog for California buyers.

Why Are TICs Popular in San Francisco and Los Angeles?

• San Francisco: Strict condo conversion laws make TICs one of the most affordable ownership paths in central neighborhoods.
• Los Angeles: TICs are gaining popularity in trendy areas like Silver Lake and Echo Park, where condos are limited.

If you’re considering a TIC but aren’t sure how to start, the first step is to get preapproved for a mortgage so you know exactly what you can afford.

Benefits of Buying a TIC

• Lower Cost: Often priced 10–20% less than condos.
• Prime Neighborhoods: Many TICs are in walkable, central areas.
• Co-Buying Potential: Perfect for friends, couples, or family members.
• Possible Condo Conversion: Some TICs can later be converted into condos.

Risks and Considerations

• Specialized Financing: TIC loans, not traditional mortgages, are required.
• Shared Expenses: Property taxes, insurance, and maintenance are split.
• Resale Market: TICs can be harder to sell than condos.
• Agreement Defines Rights: The TIC agreement outlines occupancy and responsibilities.

The Importance of the TIC Agreement

The TIC agreement defines:

• Which unit you occupy
• How expenses are divided
• What happens if an owner sells
• Rules for renting or refinancing

Because the agreement is the backbone of TIC ownership, it’s critical that you consult an experienced real estate attorney to review your TIC agreement before purchasing.

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Always consult a qualified real estate attorney to carefully review your TIC agreement before purchasing a TIC property.

Frequently Asked Questions About TIC Ownership

1. What does it mean to own a TIC property? Owning a TIC means you share ownership of the building with other buyers, but you have the exclusive right to occupy your unit as defined in the TIC agreement.
2. Why are TICs usually cheaper than condos? TICs are typically more affordable because of their shared ownership structure. Since you don’t own a separate deeded unit, they’re priced lower than condos, giving budget-conscious buyers a way into high-demand neighborhoods.
3. Who typically buys TICs? TICs are popular with:

• • First-time buyers looking for affordability
  • Friends, couples, or families co-buying multi-unit properties
  • Investors seeking access to prime neighborhoods at lower cost

4. Can TICs be turned into condos later? Sometimes. In cities like San Francisco and Los Angeles, there are strict rules on condo conversions. If possible, it usually requires agreement from all co-owners and compliance with city regulations. Always treat a TIC as a long-term ownership option first, with potential condo conversion as a bonus.
5. Why is the TIC agreement so important? Because TICs involve shared ownership, the agreement sets the rules for occupancy, shared costs, and dispute resolution. Buyers should always have an attorney review the TIC agreement before moving forward.
6. How do you finance a TIC purchase? You can’t use a conventional mortgage. Instead, you’ll need a specialized TIC loan. The good news is, today’s programs allow you to buy with just 15% down payment and loans up to $2 million. Learn more in our full guide: TIC loans in San Francisco and Los Angeles explained.

Final Thoughts

TICs may be less common than condos, but they offer an affordable entry point into California’s toughest markets. With the right financing, a strong TIC agreement, and professional guidance, they can be a smart path to ownership or investment.