Tenancy In Common (TIC) Housing
TIC homes are often compared to condominiums and cooperatives, but they are different. The legal structure is unique and, all other things being equal, TIC homes generally cost far less than coops and condominiums.
A TIC is created when a building, usually an apartment building, is sold to two or more owners as tenants in common, where each signs an agreement in which each receives the right to exclusively occupy one of the units. Each tenant in common has his or her name on the deed to the entire building, has the right to lease or sell the unit, and can pass his or her ownership share and right to occupy to an heir. Individual tenants in common can obtain their own mortgage financing, pay a portion of the real estate taxes, and can deduct both real estate taxes and mortgage interest on their state and federal tax returns.
FAQ - TIC Home Ownership
If I buy a TIC interest, will my name be on the deed?
Yes. Your name will be on the deed to the entire property and will indicate your fractional interest or percentage.
If I buy a TIC interest, can i obtain my own loan from a mortgage lender?
Why do people buy TIC interests as opposed to condominiums or a co-ops?
Generally, people buy TIC interests because the cost is lower and they like the building and its location.
Is a TIC interest an ownership in real estate?
Do TIC properties have homeowner associations?
Yes. They have homeowner associations and governing documents which should be read before buying.
Are TIC properties typically professionally managed?
Yes. TIC properties are usually managed by homeowner association management companies.
Can an office building, retail property, or industrial development be structured as a TIC?
Yes. This form of ownership is becoming more and more common for all types of commercial properties.
Do TIC properties require the approval of the California Department of Real Estate (DRE) before they can be sold?
The DRE must approve TIC property applications for properties of 5 or more units only.
Who typically prepares the governing documents for TIC properties?
There are several attorneys in California that have expertise in this area of the law, call us if you need a referral.
How are TIC property taxes allocated?
Los Angeles County, San Francisco County, and most other counties in California send a single real estate tax bill to the owners which is paid by the TIC homeowners association. The tax bill is usually allocated based on purchase price so that upon a resale by one owner, the other TIC owners are not affected.
Is it possible to convert a TIC property to a condominium?
Sometimes, but not always. It depends on many factors. This is a question to be discussed with a licensed attorney who has specific knowledge in this area of the law.
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