TIC Attorneys and Fractional Lenders: Who You Need for a TIC

A tenancy in common in San Francisco is a share of a whole building plus a private contract that says which unit is yours and what happens when a co-owner stops paying. Two people make or break the purchase: the attorney who reads that contract and the lender who will finance your share alone. Hire both before you write an offer, because the contingency window will not be long enough to find them afterward.

What a TIC is, and why it trades at a discount

In a condo you own your unit outright with its own parcel number, deed and tax bill. In a TIC the whole building is one parcel owned by several people as tenants in common, each holding an undivided percentage. A TIC agreement among the owners assigns exclusive use of a specific unit to each share, sets how costs are split and governs sales, defaults and disputes.

The price gap comes mostly from financing and resale. Published estimates of the TIC discount range from roughly 5 to 20 percent below an equivalent condo, depending on the era and the building; KQED's reporting on conversion policy cited 10 to 20 percent. As of 2026-10-24 no clean public dataset isolates the current gap, so check recent sales of both types with the comps tool before deciding what the discount is worth.

The TIC agreement: what an attorney reviews

The agreement is the product. An experienced San Francisco TIC attorney will read it for:

• Cost sharing. How property tax, the master insurance policy, utilities, repairs and reserves are allocated, and whether the percentages match the shares.
• Decision making. What needs a majority, what needs unanimity, and who can bind the group on a contractor or a lawsuit.
• Exclusive use and alterations. Which spaces are yours alone, which are common, and what you may change inside your unit without the others' consent.
• Rental rights. Whether and how you may rent your unit; a tenant brings the Rent Ordinance into the building, see tenant-occupied purchases.
• Default and remedies. Notice periods, late charges, the group's right to cure a missed payment, and the mechanism to force a sale of a defaulting share. This is the clause that costs owners money later when it is vague.
• Exit. How a sale works, whether the others have a right of first refusal, and how the price of a share is set.
• Partition waiver. The waiver of the right to force a court-ordered sale of the whole building, which is what keeps one unhappy owner from unwinding everyone else.

General California guidance prices an attorney-drafted co-ownership agreement at roughly $1,000 to $2,000; a review of an existing San Francisco agreement is usually priced flat and often less, and firms vary, so as of 2026-10-24 get two quotes. Compare on how many SF TIC agreements each firm handled in the past year, not on the hourly rate.

Group loans vs fractional loans

Fractional financing changed the TIC market by removing the shared-default risk; a building still on a group loan is a major finding for your attorney and lender.

Fractional lenders: who, and on what terms

Fractional loans are portfolio products: the lender keeps them, since they cannot be sold to Fannie Mae or Freddie Mac, and that shows in the terms. Published guidance for San Francisco buyers:

• Rates generally run roughly 0.5 to 1 percentage point above comparable condo loans; a 2026 buyer guide puts the premium near half a point, and one credit union's published TIC example in August 2026 was priced just over 7 percent APR at 60 percent loan-to-value.
• Lenders want more down than on a condo: published guidance puts maximum loan-to-value around 70 to 80 percent on purchases and lower on refinances, so plan on at least 20 to 30 percent down. Each lender sets its own limits (Bank of Marin, for example, lists loan amounts up to $1.5 million), so as of 2026-10-25, check current figures.
• Products are typically adjustable with fixed periods of three, five or seven years, and some lenders have offered longer fixed periods.

Bank of Marin and Redwood Credit Union market fractional TIC loans for San Francisco buildings, National Cooperative Bank has written them here in the past, and other portfolio lenders (Sterling Bank & Trust was one) have come and gone. As of 2026-10-25, ask your agent and attorney who is actually closing fractional loans and get two quotes. Compare the fixed period, the adjustment caps, the margin after reset and any prepayment penalty, not the start rate alone. The conforming vs jumbo article explains agency limits, which matter less here: you were never going to get an agency loan on a TIC.

Insurance, property tax and reserves

• Insurance. The building carries one master policy that all owners pay into through the agreement; you add your own policy for contents and liability inside your unit. Your attorney should confirm the master policy's limits and who is named; see homeowners insurance.
• Property tax. The building is one parcel with one tax bill. When a share changes hands, California law treats it as a change in ownership of only that undivided interest, so the Assessor reappraises your share at your purchase price and leaves the others at their existing values. The San Francisco Assessor-Recorder will, on request, provide a courtesy notice of each co-owner's share of the assessed value, which protects your base-year value and makes the group's allocation transparent; the request form is due by March 30 to take effect for the fiscal year starting July 1, the letters go out each July, and the building still gets one tax bill. Ask for it as soon as you close, and expect a supplemental bill.
• Reserves. Nothing requires a TIC to hold reserves. Read the agreement and the group's bank statements; a building facing a soft-story retrofit or a roof with no reserve fund is a special assessment waiting for you.

Condo conversion odds and value

San Francisco's annual conversion lottery has been suspended under Subdivision Code section 1396.5, which ties its return to the production of replacement housing for the units converted through the 2013 expedited program; as of 2026-10-25 the most recent guidance we found still described it as suspended, so check current status. Two-unit buildings can bypass the lottery if both units have been occupied by separate owners as principal residences for at least a year; the code also sets minimum ownership percentages (Andy Sirkin's summary puts it at 25 percent per owner), and vacant units do not count. Buildings with two or more no-fault evictions tied to separate units since May 1, 2005 are barred from converting, a single eviction of a protected tenant can bar it as well, and units legalized under the city's unwarranted-unit program are ineligible for subdivision.

Price a TIC as if it will stay one; TIC conversion and ADUs covers the process once you own.

Exit risk

You will sell to a buyer who can get a fractional loan from one of a handful of lenders at a rate premium, in a building whose agreement they will need to accept. That shrinks the buyer pool relative to a condo and makes your resale sensitive to whether those lenders are still active. Buildings with clean agreements, good records and no group loan sell faster, so keep every closing document and every year's financials.

Co-buying with friends or family, and when to walk away

Friends or relatives pooling money to buy a two- or three-unit building are creating a TIC whether or not they call it one, and they need the same agreement. Do not use a template; the attorney article covers co-ownership agreements.

Walk away from a TIC when the agreement has no workable default clause, when the building is still on a group loan and the group will not refinance, when a co-owner is renting to a long-term tenant without a plan, when the master policy is lapsed or thin, or when no active fractional lender will finance the building. Those are not negotiating points; they are structural.

What to shop for right now

• TIC attorney (medium savings). Two flat-fee quotes from firms that do SF TICs weekly. The saving is a bad agreement caught before closing.
• Fractional TIC lender (low savings). Two quotes on the same share and down payment; compare reset terms and prepayment rules rather than the start rate.