TIC vs Condo In North Beach: Key Differences

Thinking about buying in North Beach and torn between a TIC and a condo? You are not alone. Many buyers and small investors weigh these two paths because they affect how you own, finance, live in, and eventually sell your home. In a few minutes, you will understand the key differences, the costs to expect, and the due diligence that protects you.

Let’s dive in.

Quick definitions you can use

What a condo means in San Francisco

A condominium gives you fee-simple ownership of your individual unit plus a shared interest in the common areas. The building is mapped as a condo and governed by recorded CC&Rs, Bylaws, and an association. This structure offers separate title to your unit and standard HOA operations.

What a TIC means in San Francisco

A tenancy-in-common, or TIC, gives you an undivided fractional ownership of the whole property. You receive a percentage interest on title, and your exclusive right to live in a specific unit comes from a private TIC Agreement. That agreement sets the rules for occupancy, transfers, budgets, maintenance, disputes, and more.

How ownership changes daily life in North Beach

Possession and exclusive use

Condo owners hold separate title to the interior of their unit, with defined rights to common areas. TIC owners hold a percentage of the entire building and rely on the TIC Agreement for their unit occupancy. Your day-to-day rights in a TIC exist because of that contract, not because you own a separate legal parcel.

Liability, mortgages, and insurance

Condo owners typically have individual mortgages and an HOA master insurance policy for common areas, while owners maintain HO-6 coverage for interiors. TIC financing can be individual fractional loans or a single master loan on the building. Review whether any master mortgage exists, how liability is shared, and what insurance the building carries, including earthquake coverage.

North Beach building realities

Many North Beach properties are older wood-frame walk-ups, and some have soft-story conditions. San Francisco has mandatory seismic retrofit requirements for certain buildings. In a TIC, retrofit costs are often shared through special assessments set by the TIC Agreement. Always review recent or planned capital projects before you buy.

Financing: what to expect

Loan availability and programs

Condos generally qualify for a wider range of loans, including many conventional products and sometimes FHA or VA when the building meets program rules. TIC financing is more limited and often handled by local portfolio or specialty lenders. You may face stricter underwriting and fewer lender options with a TIC.

Down payment, rates, and underwriting

TIC loans often require larger down payments, commonly in the 20 to 30 percent range or more. Some lenders also review other co-owners in the building. Interest rates or fees can be higher for TICs compared to well-qualified condo loans.

Master mortgage vs individual TIC loans

A master mortgage encumbers the entire property, which can complicate a sale. A buyer may need to assume terms acceptable to the lender or require the seller to address the loan before closing. Many buyers prefer individual fractional TIC loans when available.

Government-backed eligibility

Not all TIC structures meet FHA or VA requirements. Verify eligibility early with a lender that understands San Francisco TICs so you do not waste time on a path that will not work.

Costs, reserves, and taxes

Monthly assessments and reserves

Both condos and TICs collect monthly assessments for maintenance, insurance, and reserves. Condo HOAs follow standardized practices under California’s common interest statutes. TIC reserves depend on the contract and the owners’ budgeting choices, so confirm actual reserves, any planned projects, and the history of special assessments.

Property taxes and reassessment

Under Proposition 13, changes in ownership or creating new legal parcels can trigger reassessment. TIC purchases and condo conversions can have different tax outcomes depending on how the Assessor treats the change. Ask the San Francisco Assessor-Recorder how your specific situation would be handled.

Insurance details to confirm

Condo HOAs carry master policies for common areas while owners maintain unit coverage. TICs rely on the TIC Agreement for the insurance framework. Confirm building policies, deductibles, and whether earthquake insurance is in place or planned.

Governance and rules

How decisions get made

Condo associations operate under recorded CC&Rs and Bylaws and follow the Davis-Stirling Act for meetings, budgets, reserves, and enforcement. TICs follow the TIC Agreement, which can require anything from simple majority to unanimous approval for big projects. Read voting thresholds and dispute resolution language before you commit.

Rentals and subletting

Condo HOAs set rental policies, and TIC Agreements can be more restrictive or require owner occupancy. For investors, check both the building rules and local rental regulations. If you plan to rent, confirm what is allowed and how approvals work.

Resale and exit strategy in North Beach

Buyer pool and pricing

Condos appeal to a broader buyer pool with more financing options. TICs often trade at a discount to similar condos because of financing friction and transfer restrictions. In a high-demand location, that gap can narrow, but the buyer pool for TICs remains smaller.

Conversion to condo

Converting a TIC to condos can improve marketability and financing options, but it requires legal subdivision and compliance with San Francisco rules and tenant protections. Conversion can also trigger property tax reassessment and added costs. Evaluate eligibility, timing, and the approval process before you count on a conversion.

Investor lens

For buy-and-hold investors, demand for rentals is often strong, but local rules and building policies matter. Study rental limits in the TIC Agreement or HOA, the impact of any master mortgage, and your exit plan if you need to sell during a slow period.

Which one fits your goals?

• Choose a condo if you want simpler financing, separate title to your unit, and the broadest resale audience.
• Consider a TIC if the price point opens the door to a prime North Beach location and you are comfortable with the agreement’s rules, financing, and shared obligations.
• For investors and landlords, model cash flow with realistic assessments, potential retrofit costs, and rental policy limits. Confirm underwriting and any master mortgage early.

Due diligence checklist for North Beach buyers

Documents to request

• Recorded title documents and plan: condo CC&Rs, Bylaws, and Condominium Plan or TIC deed and Agreement with amendments.
• Current budget, recent financials, reserve study (for condos), and any TIC reserve statements.
• Minutes of meetings for the past 2 to 3 years.
• Details on loans and encumbrances, including any master mortgage.
• Insurance policies and information on earthquake coverage.
• Recent or pending special assessments, major capital projects, and any litigation.
• Building inspection reports and permit history, including seismic retrofit status.
• Rent roll and tenant information if units are tenant occupied.
• Seller disclosures and any pest, lead, asbestos, or other reports.

Questions to ask the seller or listing agent

• Is there a master mortgage, and what will be required at sale?
• Are major projects scheduled, such as seismic retrofit, roof, or plumbing work?
• What voting thresholds apply for assessments and big decisions?
• Has the building had code enforcement actions or unresolved disputes?

Questions to ask a lender

• Do you make loans on TIC fractional interests? What down payment and rate apply?
• Will other co-owners need to be underwritten or guarantee the loan?
• How does a master mortgage affect my financing and closing timeline?
• Is the property eligible for FHA or VA under its current structure?

Advisors to engage

• A real estate attorney with San Francisco TIC and condo experience.
• A lender familiar with TIC loans or condo unit financing in San Francisco.
• A licensed home inspector who knows older SF buildings, and a structural engineer if seismic issues are suspected.
• A CPA to review property tax and capital gains implications, especially for investors.

Your next steps

1. Get pre-approved with a lender experienced in San Francisco TIC and condo financing.
2. Hire a local real estate attorney to review the TIC Agreement or condo CC&Rs before you remove contingencies.
3. Pull building financials, meeting minutes, and any seismic retrofit documents to confirm upcoming costs.
4. If you plan to rent now or later, confirm rental rules and build a cash flow model that includes realistic assessments and reserves.

If you want a local, leasing-first strategy that aligns your purchase with rental performance, reach out to Ray Amouzandeh. Get a fast leasing plan and schedule a free consultation.

FAQs

Can you get a mortgage on a TIC in San Francisco?

• Yes, but options are narrower than condos, and lenders often require higher down payments and may review other co-owners.

How do HOA or TIC dues compare in North Beach buildings?

• Both structures charge monthly assessments, but TIC reserves and assessment triggers depend on the private agreement, so review the budget and history closely.

What does a master mortgage mean for a TIC buyer?

• A master mortgage encumbers the whole building, which can complicate sales and financing; clarify payoff or assumption requirements before you commit.

Does buying a TIC change my property taxes under Prop 13?

• Changes in ownership can trigger reassessment; verify with the San Francisco Assessor-Recorder how your specific purchase would be treated.

Is converting a North Beach TIC to condos realistic?

• It can be, but it requires legal subdivision and compliance with San Francisco rules and tenant protections, and it may trigger added costs and tax reassessment.