If you've been searching for a home in Los Angeles, you've probably seen listings marked "TIC" priced well below the condos down the street. That gap is real, and so are the differences in how you own, finance, and eventually sell a TIC. Here's what every buyer should understand before touring one.
Key takeaways
- A TIC is shared ownership of one property, with each owner holding a percentage of the whole.
- A written TIC agreement gives you the exclusive right to live in a specific unit.
- TICs are often priced below comparable condos, but financing and resale work differently.
What is a TIC?
TIC stands for Tenancy in Common. It's a way for two or more people to own a single property together. Each owner holds an undivided interest in the entire property, which means you own a percentage of the whole building rather than a specific set of walls.
Shares don't have to be equal. In a four-unit building, one owner might hold 28% while another holds 22%, usually based on the size and value of each unit. Together, the shares always add up to 100%.
How TIC ownership works day to day
If everyone technically owns a slice of everything, how do you know which unit is yours? That's the job of the TIC agreement. This private contract between the owners assigns each person exclusive use of a specific unit and sets the rules for the building, including:
- How property taxes, insurance, and repairs are divided
- How the group makes decisions and handles disagreements
- What happens if an owner stops paying their share
- How an owner can sell, and whether co-owners get the first chance to buy
In Los Angeles, TICs are most common in duplexes, triplexes, and small apartment buildings that were never converted into legal condominiums.
On paper you own a share of the building. In practice, the TIC agreement is what makes your unit your home.
TIC vs. condo vs. joint tenancy
TICs are easiest to understand side by side with the ownership types buyers already know.
| TIC | Condo | Joint tenancy | |
|---|---|---|---|
| What you own | A % share of the whole building | Your unit, plus shared common areas | Equal shares of one property |
| Your own unit | Yes, by TIC agreement | Yes, by recorded condo map and deed | Usually one shared home |
| Shares can differ | Yes | n/a | No, always equal |
| If an owner dies | Share passes to their heirs | Unit passes to their heirs | Share goes to surviving owners |
| Financing | Fractional or group loan, fewer lenders | Standard mortgage | Standard mortgage |
| Rules set by | TIC agreement | HOA and CC&Rs | The owners themselves |
One difference surprises buyers most: a TIC has no right of survivorship. If a co-owner passes away, their share goes to their heirs or estate, not to the other owners.
How to finance a TIC
Financing is the biggest practical difference between a TIC and a condo. There are two main structures.
Fractional loan. Each owner has their own mortgage secured only by their share. If a neighbor defaults, your loan isn't affected. This is the preferred setup for most buyers, but only a limited number of lenders offer it, and rates and down payment requirements can be higher than a standard mortgage.
Group loan. One mortgage covers the whole building, and every owner pays toward it. It's simpler to arrange, but a missed payment by one owner puts the entire group at risk.
Find out which structure a building uses before you write an offer. It shapes your down payment, your monthly payment, and how easy the unit will be to sell later.
Pros and cons of buying a TIC
Advantages
- Often priced below comparable condos in the same area
- A path into neighborhoods where condos are scarce
- Character buildings with small ownership groups
- Some agreements plan for a future condo conversion
Things to watch
- Fewer lenders and potentially higher rates
- A smaller buyer pool when it's time to sell
- You depend on co-owners paying their share
- Rent control and tenant rules may affect the building
Questions to ask before you buy a TIC
- Is there a recorded TIC agreement?
Read it in full and have a real estate attorney review it. - Fractional loan or group loan?
Ask which lenders have financed units in this building before. - How are costs and repairs shared?
Look for a reserve fund and a clear process for big items like roofs. - What happens if an owner stops paying?
Strong agreements include default and buy-out provisions. - Are there limits on selling or renting?
Some agreements give co-owners a right of first refusal. - Is condo conversion possible?
Conversion can add value but depends on city approvals and owner consent.
Frequently asked questions
What does TIC mean in real estate?
TIC stands for Tenancy in Common, a form of co-ownership where each owner holds an undivided percentage of an entire property. A TIC agreement gives each owner exclusive use of a specific unit.
Is a TIC cheaper than a condo?
TICs are often priced below comparable condos because financing is more limited and the ownership structure is less familiar to buyers. The exact difference depends on the building, the neighborhood, and the loan structure.
Can I get a regular mortgage for a TIC?
Usually not. Most TICs are financed with a fractional loan from a lender that specializes in TICs, or with a group loan that covers the whole building.
What happens to a TIC share when an owner dies?
A TIC has no right of survivorship, so the share passes to the owner's heirs or estate rather than to the other co-owners.
Can a TIC be converted to a condo?
Sometimes. Conversion depends on local rules, building requirements, and agreement among the owners. Ask whether the TIC agreement addresses conversion.
Let's look at it together
I'll walk you through the TIC agreement, connect you with lenders who finance TICs, and compare the price against nearby condos so you know what you're really getting.
Jeremiah · Vancans Group at Compass · DRE #01944484
This article is general information and not legal, tax, or lending advice. TIC agreements vary widely. Consult a real estate attorney and a qualified lender before purchasing.