A tenancy-in-common, or TIC, is a form of co-ownership. Rather than buying a unit, you buy a fractional share of an entire building, and a written TIC agreement gives you the exclusive right to occupy one specific unit. Why TIC exists in Los Angeles Much of the city's most desirable small apartment stock was built before 1978 and falls under rent stabilization. Condo conversion on those buildings is discretionary, slow, and in many cases not available at all. Tenancy-in-common is the structure that lets those buildings be sold unit by unit anyway. That is why the format has grown in the City of Los Angeles while it remains rare in Orange County and San Diego. What you actually own A recorded percentage interest in the deed to the whole property, plus the exclusive right to use your unit and any parking or storage assigned to you. It is recorded, insurable and financeable. TIC compared with a condominium Title. A condo is its own legal parcel with its own APN. A TIC share is a fraction of a single parcel. Financing. Condos use ordinary mortgages. TIC buyers use fractional loans from a small group of portfolio lenders, or share a single blanket loan across the building. Governance. Condos run on CC&Rs and a state-regulated HOA. TICs run on the agreement the owners sign, which sets budgets, reserves, maintenance, transfer terms and dispute resolution. Price. TIC shares generally trade below comparable condos. That gap is both the opportunity and the risk, and it is the first thing to understand before you make an offer. What to review before you buy The TIC agreement itself. The loan structure and who is on the hook if a co-owner stops paying. The reserve balance and how it is funded. Any rent-stabilization history attached to the building, including how prior tenancies were ended. And the resale terms, so you know what selling your share looks like before you need to. Where we come in The Martin Fish Team works on both sides of this market: advising owners on whether a building is a candidate for TIC, and representing buyers who want well-located Los Angeles real estate at a basis that still makes sense. TIC listings are coming. If you want to see them before they are public, get in touch. This page is general information, not legal, tax or financial advice. Every TIC transaction should be reviewed by your own attorney and CPA.

How do I finance a TIC? Two structures dominate. A fractional loan finances your share alone, so your payment and your credit are yours; a small group of portfolio lenders write these. A blanket loan covers the whole building and the owners share it, which is cheaper to originate and riskier, because one owner's default is everyone's problem. Fractional is the standard for new conversions. Expect rates above conventional and down payments in the 20 to 30 percent range, depending on the lender and the building. What is the TIC agreement, and why does it matter more than anything else? It is the constitution of the building. It assigns units, sets the budget and reserve, allocates property taxes and insurance, defines maintenance responsibility, sets rules on renting out your unit, and spells out what happens when an owner stops paying or wants to sell. A well-drafted agreement is the difference between a TIC that trades easily and one that does not. Read it before you write an offer, with your own attorney. What do I pay every month? Your loan payment, plus a monthly assessment covering the building's shared costs: property tax, master insurance, utilities on common areas, maintenance and the reserve contribution. It functions like an HOA dues payment. Ask for the last two years of actuals, not the projection. How are property taxes handled? The county assesses one parcel. The TIC agreement divides the bill among owners by their percentage interest, and a reassessment can be triggered when a share transfers. Have your CPA confirm how a specific building handles this before you close. Can I rent out my unit? Sometimes, and the agreement decides. Some buildings allow it freely, some cap the number of rented units, some prohibit it. If rental flexibility matters to you, treat it as a screening question rather than something to negotiate later. How does resale work? You sell your share, and the buyer takes your unit and your seat in the agreement. The buyer pool is smaller than for a condo and depends on lenders being active in the market, so pricing and timing are more sensitive than a comparable condo sale. That is also why the entry basis is lower. Is a TIC a good idea? It is a good idea when the discount to comparable condos is real, the agreement is well drafted, the reserve is funded, and you plan to hold long enough that the entry discount outweighs the narrower resale market. It is a poor idea when you need to sell quickly or you have not read the documents. General information only, not legal, tax or financial advice. Have your own attorney and CPA review any TIC transaction.

A four to twelve unit building in a good Los Angeles neighborhood is usually worth more sold as individual homes than sold whole to an investor pricing it off rents. Tenancy-in-common is the structure that makes that possible on buildings that cannot practically be condo-converted. The basic arithmetic An investor buys your building on a cap rate applied to in-place rents. Owner-occupant buyers pay on price per square foot for a home they will live in. On rent-stabilized stock with below-market rents, the gap between those two numbers is often very large, and TIC is how you capture it. The gap is not free: you take on the time, cost and execution risk of a unit-by-unit sale. Which buildings are candidates Small unit count, typically four to twelve, in a neighborhood where buyers want to live rather than only invest. Units that read as homes: separate entrances, real light, parking, layouts that stand on their own. A clean path to delivering units vacant, handled lawfully and with proper relocation, or units already vacant. Physical condition that supports individual sales, or a budget to get there. What the process involves Feasibility and pricing first: what each unit sells for, what the whole building fetches as an investment, and whether the spread justifies the work. Then the legal structure, drafted by TIC counsel. Then lender lineup, because your buyers need fractional financing to exist before you launch. Then unit preparation and a staged release to market rather than dumping every unit at once. The risks, stated plainly Timelines are long and the tenant-relocation side is regulated, costly and legally exacting. Financing availability moves with rates and with a handful of lenders. Carrying costs run while units sit. Value is only realized on units that actually sell. A TIC conversion is an operating project, not a listing. Start with the numbers We will run the two scenarios side by side on your building, at no cost: what it sells for whole, and what it sells for unit by unit net of conversion costs and time. If the spread is not there, we will tell you. General information only, not legal, tax or financial advice. Tenant relocation and rent-stabilization compliance require qualified counsel.