Explaining the difference between a TIC, a condo and a co-op for Real Estate in San Francisco - Part 1
A reader asks:In San Francisco, I hear a lot of people throw around the terms, tenancy in common, condominium and co-op and often use them to describe the same property in the same sentence. What is the difference between them?
Our answer:
We thought we'd answer your question an several parts. In Part 1 will cover "TIC" or Tenancy In Common as a form of ownership.
Attorney, Andy Sirkin, the local San Francisco TIC expert, says, "The acronym 'TIC', which stands for tenancy in common, along with the terms 'cotenancy' and 'fractional ownership', refer to arrangements under which two or more people co-own a parcel of real estate without a 'right of survivorship'. This type of co-ownership allows each co-owner to choose who will inherit his/her ownership interest upon death. By contrast, the type of co-ownership called 'joint tenancy' requires that each co-owner’s interest pass to the other co-owners upon death."
He goes on to explain some of the ways a Tenancy In Common is different from condominiums and cooperatives. We will refer to these in our later articles on the second two types but also go into the nuances of each.
Stimmel, Stimmel and Smith, another San Francisco law firm, explains, "...[referring to new buyers] The question is how to break into that market. How does one manage the economics of buying the first home, the first condominium in such an expensive market? Condominiums were long seen as the best and least expensive way for those with limited funds to enter the market and enjoy the appreciation and tax benefits that come with home ownership."
In short, a tenancy in common allows many people to own the same building, in effect, pooling the resources of two or many people to buy more than they could afford on their own.
One problem with this form of ownership is, what happens when one of the parties wants to move and the others don't? A well written agreement should cover this, as long as an expert has been consulted from the beginning.
- Mick Orton
posted by SFResidence.com @ 7:28 AM
0 Comments:
Post a Comment
<< Home