Eyeing a classic pre-war flat in Russian Hill and seeing “TIC” in the listing? You are not alone. TICs can offer a great entry point into one of San Francisco’s most desirable hilltop neighborhoods, but they work differently from condos and come with unique steps and tradeoffs. In this guide, you will learn what a TIC is, how it functions in Russian Hill’s boutique buildings, what financing looks like, and the due diligence that protects you. Let’s dive in.
TIC basics in Russian Hill
A tenancy in common, or TIC, is shared ownership of a single property where each owner holds an undivided fractional interest. You own a percentage of the whole property rather than a mapped condo unit. Your rights and responsibilities are set by a private TIC agreement, which spells out use, maintenance, assessments, voting, and sale mechanics.
In Russian Hill, TICs are common in pre-war buildings with two to six units. Each owner typically has a recorded deed for a percentage share, and the group shares common areas per the agreement. Because the agreement is the rulebook, you should read it closely to understand how the building runs day to day.
TIC vs condo: what changes for you
Ownership and title
- TIC: You co-own the entire property and hold a deeded percentage. There is no separate condo map or unit lot. This can affect financing and resale.
- Condo: You own a defined unit plus a share of common areas. Title is often easier to finance and transfer.
Rules, budgets, and reserves
- TIC: Rules live in the private TIC agreement. Voting thresholds may be majority or unanimous. Budgets and reserves vary by building.
- Condo: Governed by recorded condo documents and an HOA. Policies are more standardized, and financial reporting is often more formal.
Insurance and repairs
- TIC: Insurance and repair obligations are allocated by the agreement. Some buildings carry a master policy, others require individual policies with specific endorsements.
- Condo: The HOA usually carries a master policy for common elements, while owners cover interiors and personal property.
The takeaway: TICs can be more customized. The agreement controls how money is collected, how projects are approved, and who pays for what. Clear insurance terms matter so you are not exposed to gaps.
Usage and rental rights
TIC agreements may include rental limits or approval requirements. If renting is part of your plan, confirm current rules and any city regulations that apply before you write an offer.
Financing a TIC in San Francisco
TIC financing is a niche. Many loans are held in portfolio by specialty lenders rather than sold on the secondary market. That can mean fewer lender choices, different underwriting, and occasionally higher rates compared with comparable condos.
Typical loan terms you may see
- Down payments: Many lenders expect 15 to 25 percent down for owner-occupants. Investors or second homes may require more.
- Underwriting: Tighter credit standards and lower allowable debt-to-income ratios are common.
- Building documentation: Lenders usually require the TIC agreement, budgets, reserve information, and confirmation of no pending litigation.
- Collateral: Some lenders want cross-collateralization in smaller buildings. They may also require estoppel-like confirmations from co-owners.
Because timelines can stretch, get preapproved with a TIC-experienced lender early and build a realistic mortgage contingency into your offer.
Government-backed loans
FHA and VA loans usually do not apply to TIC interests in a straightforward way. If you plan to use a government program, verify eligibility with a lender who regularly handles TICs before you begin your search.
Due diligence for Russian Hill boutique flats
Older buildings in Russian Hill often have charm and views, and they can also carry building-level responsibilities. Here is what to review:
- TIC agreement and financials: Read the full agreement, current budget, reserve balances, minutes, and the owner ledger of loans or liens.
- Building condition: Request records for plumbing, electrical, roof work, and any major capital projects in the last 5 to 10 years.
- Seismic and permits: Confirm compliance with local retrofit or permit requirements and check for any planned assessments.
- Insurance: Identify master and individual policy requirements and verify limits and endorsements.
- Occupancy and rental status: Confirm current leases and any rules on subletting or short-term rentals.
- Conversion potential: If long-term strategy includes condo conversion, research feasibility, timeline, and cost. It can be possible, but it is regulated and consensus-driven.
- Governance culture: In a small building, how people make decisions matters. Ask about dispute history, communication norms, and management practices.
Value, tradeoffs, and fit
Russian Hill TICs can offer a lower price point than comparable condos in newer buildings. You also get classic pre-war details, high ceilings, and boutique scale close to neighborhood amenities. For many buyers, that is the draw.
Tradeoffs include a more complex loan process, a smaller future buyer pool, and the potential for special assessments if big projects arise. If you love the building and plan to stay several years, the value can make sense, as long as you are comfortable with the agreement and the group’s financial practices.
Exit and resale planning
TIC resale markets are smaller than condo markets, so plan for a longer timeline and price your exit accordingly. Typical paths include selling to another TIC buyer, refinancing with a portfolio lender, or in some cases participating in a buyout or a condo conversion process that complies with city rules. Each path has cost and consensus requirements, so it is worth discussing your exit strategy before you buy.
Step-by-step buyer checklist
- Talk to 2 to 3 TIC-experienced lenders and secure preapproval specific to TIC terms.
- Hire a real estate attorney familiar with San Francisco TIC agreements to review documents and explain obligations.
- Ask an insurance broker about coverage requirements and a CPA about tax allocation for your share.
- Request the full TIC document set, including agreement, budgets, reserves, minutes, owner ledger, and any notices or litigation.
- Confirm permit and retrofit status and ask for engineering reports if available.
- Review exit provisions in the agreement, including right of first refusal, approval thresholds for alterations, and remedies for default.
- Write contingencies that reflect TIC financing timelines and document review.
Is a TIC right for you in Russian Hill?
If you value architectural character and location and you are comfortable with a hands-on ownership group, a TIC can be a smart way to own in Russian Hill. The key is clarity. Understand the agreement, confirm the building’s financial health, and line up the right lender and advisors from the start. With the right preparation, you can buy with confidence.
If you want a local guide to evaluate a specific TIC, review documents, and coordinate the right lender and attorney, connect with Casey L Cowell for personalized, white-glove buyer representation.
FAQs
What does “tenancy in common” mean for a Russian Hill flat?
- It means you co-own the entire property by percentage, with rights and duties set by a private TIC agreement instead of a condo HOA.
How is a Russian Hill TIC different from a condo for financing?
- TIC loans are usually portfolio products with fewer lender options, higher down payments, and tighter underwriting than typical condo mortgages.
What should I look for in a TIC agreement before I buy?
- Review voting rules, assessment and reserve policies, insurance requirements, repair responsibilities, rental limits, and the process for selling your share.
Are FHA or VA loans available for Russian Hill TICs?
- Often no. FHA and VA programs typically do not insure loans on TIC interests. Confirm eligibility early with a TIC-experienced lender.
What building issues are common in pre-war Russian Hill TICs?
- Older systems, seismic or retrofit obligations, and roof or envelope projects. Ask for improvement history, reserves, and any planned assessments.
Will a TIC be harder to resell than a condo in San Francisco?
- Usually yes. The buyer pool is smaller, financing is more specialized, and timelines can be longer, which can affect pricing and strategy.
