Questions to Ask Before Buying a Tenants in Common Property

Hollywood Living

Why Smart Buyers Ask the Right Questions

Buying into a Tenants in Common (TIC) property in California can offer a rare opportunity: the chance to own a home in an otherwise unaffordable market. Especially in Los Angeles and San Francisco, where legal subdivisions are tightly restricted, TICs—particularly SACO (space-assignment co-ownership) arrangements—allow buyers to purchase distinct units within a shared property. But because TICs differ from traditional condos or single-family homes in both structure and risk, asking the right questions is absolutely essential.

This blog outlines the 10 critical questions every buyer should ask before committing to a TIC property. Whether you're a first-time homebuyer, a seasoned investor, or an agent representing a curious client, these questions will help you navigate the legal, financial, and lifestyle implications of TIC ownership with clarity and confidence.

1. What Exactly Am I Buying?

Unlike a condo, where you own your specific unit and a share of common areas, TICs involve shared ownership of the entire parcel with exclusive rights to your assigned unit outlined in a TIC agreement. You don’t own your unit in the legal sense—you own a percentage of the whole and the right to occupy your space.

Before buying, request a copy of the TIC agreement and confirm that:

Your exclusive occupancy rights are clearly defined
There is no ambiguity about which unit is “yours”
All shared areas (roof, yard, driveways) are addressed

This foundational understanding affects how your property is appraised, financed, insured, and sold in the future.

2. Is This a SACO TIC With Fractional Financing?

Not all TICs are the same. A SACO TIC assigns specific units to individual owners, whereas other TICs may involve shared or undefined usage.

If you’re using financing, you’ll want to be sure the property is:

Structured as a SACO
Eligible for fractional loans, not a group loan

Fractional loans allow each buyer to be financially independent, making resale and refinancing far easier. Group loans, by contrast, tie all owners together financially and pose major risks.

3. Who Prepared the TIC Agreement—and When?

The quality and age of the TIC agreement can make or break your ownership experience. Ask:

Who drafted the agreement (e.g., TIC law specialist like SirkinLaw APC)?
When was it last updated?
Does it reflect current lender, legal, and city requirements?

A weak or outdated TIC agreement may lead to financing denials or disputes between co-owners. Ideally, the document should have been drafted by a TIC attorney and updated within the past few years to reflect evolving regulations and lending practices.

4. What Are My Financial Responsibilities?

Owning a TIC property comes with ongoing costs beyond your mortgage, including:

Property taxes on your share
Monthly maintenance dues (like an HOA)
Reserve contributions for repairs
Utility and insurance obligations

Ask to review the TIC’s budget, expense split method, and reserve policies. Do owners pay based on square footage, use, or ownership share? Is there a reserve fund for big-ticket repairs? If not, you could be hit with a surprise special assessment down the road.

5. What Happens If Another Owner Defaults or Wants to Sell?

One of the key differences between TIC and condo ownership is the shared nature of the title. Even in SACO TICs, co-owners are tied together through the property’s legal and financial framework.

Ask:

What happens if another owner defaults on their mortgage or taxes?
Are there provisions to protect the non-defaulting co-owners?
Is there a resale process outlined for when someone wants to sell?

A well-crafted TIC agreement should include default protections and clear sale or buyout procedures, including how unit pricing is determined and what approval rights other co-owners have.

6. Can I Rent Out My Unit?

Each TIC agreement is different. Some allow full rentals, others limit it to specific durations (e.g., 30+ days), and some prohibit rentals entirely.

Ask:

Is owner occupancy required?
Are short-term or long-term rentals allowed?
Are there any city restrictions (especially in LA or SF)?

If you’re buying the TIC as an investment or plan to move out in the future, understanding rental policies is essential for your long-term financial planning.

7. What Type of Insurance Coverage Is in Place?

TICs typically require both:

Master insurance for the shared structure and common areas
Individual insurance (e.g., HO-6) for personal property and improvements

Ask:

What insurance policies currently exist?
What portion am I responsible for?
Are earthquake or flood policies required or available?

Some TICs do not carry adequate coverage, and that gap can expose you to major financial risk in the event of damage or liability claims.

8. How Are Decisions Made and Disputes Resolved?

Since a TIC property is co-owned, collective decision-making is required for shared matters like repairs, renovations, and rule changes.

Ask:

Is there a voting structure? (e.g., majority or unanimous)
How often are meetings held?
What’s the process for resolving disputes?

Clear governance protocols—like regular meetings and dispute resolution clauses (e.g., mediation/arbitration)—are signs of a well-managed TIC group. Avoid properties where decision-making is vague or heavily dependent on personal dynamics.

9. Is the TIC in a Rent-Controlled or Regulated Zone?

In cities like San Francisco and parts of Los Angeles, rent control and tenant protection laws can complicate TIC ownership—especially if the property is not fully owner-occupied.

Ask:

Is the property under rent control?
Are there current tenants with protected status?
Do city laws restrict owner move-ins or renovations?

Properties with protected tenants or heavy regulation may be ineligible for fractional loans or present legal challenges post-purchase.

10. Is the Property in Good Condition? Are There Any Pending Repairs?

TIC buyers often focus on legal and financial issues—but property condition is equally important.

Ask for:

A home inspection of your unit and all shared components (e.g., roof, foundation, plumbing)
Disclosure of any known issues
A list of recent or upcoming repairs

Poor maintenance or disagreement over shared repair costs can strain relationships and lead to major expense disputes.