TIC vs. Condo: What’s the Difference? A Simple Guide
If you’ve spent any time browsing Bay Area real estate, you’ve probably seen the term TIC pop up and wondered how it compares to a traditional condo. Don’t worry—you’re not alone. These two types of ownership can look very similar from the outside, but they’re structured (and financed!) quite differently.
Here’s a friendly, straightforward breakdown.
What Exactly Is a TIC?
TIC stands for “Tenants in Common.”
It’s a form of shared ownership where multiple people own percentages of the same property. Those percentages can be equal or unequal, and each owner is free to sell or transfer their share whenever they choose.
In a TIC, the entire property is recorded as one parcel, which means owners collectively share a single property tax bill. Each owner doesn’t technically own a specific unit - rather, they own a percentage tied to their unit as outlined in the TIC Agreement.
TIC vs. Condo: The Key Differences
While TICs and condos may look similar, they differ in how ownership is defined, how financing works, and how the property is managed.
TIC (Tenants in Common)
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You own a percentage of the whole building.
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The property typically appears as one recorded parcel.
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Owners share one property tax bill.
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Governed by a TIC Agreement, which outlines rights, responsibilities, usage of units, and decision-making processes.
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Financing requires specialized lenders.
Condo (Condominium)
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You own a separate, divided interest (your individual unit).
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Each unit has its own parcel number and its own property tax bill.
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Regulated by a Homeowners Association (HOA) with CC&Rs, bylaws, budgets, and reserves.
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Financing is straightforward and widely available through traditional mortgage lenders.
Financing: The Biggest Distinction
The financing piece is where things really diverge.
TIC Financing
Historically, TICs were financed with one group loan, meaning all owners were on the same mortgage—if one person defaulted, everyone was affected. Today, most TICs use fractional TIC loans, allowing each owner to have their own loan tied to their ownership share.
However, it's important to know that:
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Not all lenders offer TIC loans
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Fractional TIC loans can have different terms and rates than standard mortgages
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Early conversations with a mortgage advisor are essential
This step is crucial before falling in love with a TIC.
Condo Financing
Condos can be financed through any traditional lender, with access to a wide range of loan products and competitive rates. The process mirrors standard residential purchases.
Governing Documents
Condos are regulated by CC&Rs (Covenants, Conditions & Restrictions), HOA rules, and bylaws.
TICs rely on a TIC Agreement, which outlines rights, responsibilities, and how the shared ownership functions. These agreements can resemble HOA documents but are not identical.
Pro tip: Always read any TIC Agreement thoroughly. If anything is unclear, consult an attorney who specializes in TICs.
Is a TIC Right for You?
It depends on your goals, budget, and comfort level with shared ownership. TICs can offer more affordability and charming older buildings in amazing neighborhoods—especially in cities like San Francisco—but they come with unique considerations around financing, governance, and resale.
If you're unsure which option aligns with your needs, I’m here to help.
Reach out for a personalized conversation about the pros, cons, and what makes the most sense for your home journey.
TiffanysView — where your home journey begins.
