Difference Between Ownership

Although condos and tenancy-in-common (TIC) ownerships might seem alike, they have important differences that every owner should know.

Tenancy-in-Common (TIC)

In TIC ownership, each person owns a share of the entire property, not just their unit. All co-owners, known as "co-tenants," have access to the entire building. They create agreements to decide who can use which unit and how to handle expenses, maintenance, rentals, and resale. Unlike joint tenancy, TIC doesn’t include a right of survivorship, so if a co-tenant dies, their share goes to their estate.

Condo (Condominium)

In a condo, each person owns their unit and shares ownership of common areas like hallways or pools. The Homeowners Association (HOA) manages these shared spaces and may give some owners exclusive rights to specific areas like parking spaces or storage units.

Homeowner’s Association (HOA)

HOAs, like TIC agreements, manage common areas and set rules to keep the property in good condition. They oversee things like unit modifications and leasing rules. HOAs collect fees from owners to cover maintenance and repairs of shared spaces.

Common Disputes in Condos and TIC Units

Disputes in both condos and TICs often involve:

Noise and Nuisance. Complaints about loud or disruptive neighbors.

Pets. Issues with pet rules and behavior.

Use of Common Areas. Conflicts over shared facilities like parking or gyms.

Tenants. Problems with tenant behavior or lease violations.

Repair and Maintenance. Disputes over who is responsible for fixing and maintaining shared areas.

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Regulatory Frameworks in Condominiums and Tenancy-in-Common (TIC) Units

In California, both condos and TIC units are regulated by specific laws that govern their management and operation.

Condominium (Condo)

Condominiums in California are governed by the Davis-Stirling Common Interest Development Act. This law sets rules for homeowners associations (HOAs), including required documents like the Declaration, CC&Rs (Covenants, Conditions, and Restrictions), and sometimes Bylaws or House Rules. The Davis-Stirling Act provides basic guidelines, but HOAs can adjust these rules through their documents. Court decisions can also influence how HOA disputes are resolved.

Tenancy-in-Common (TIC)

TIC agreements are not regulated by the Davis-Stirling Act. Instead, they are governed by contract law, with each TIC agreement being unique to its property and co-owners. Without state or local regulations, resolving disputes in TIC arrangements depends on the specific terms of the TIC agreement and contract law, which can lead to varied outcomes.

Comparing TIC and Condo Property Values

When evaluating real estate value, it's important to consider how many buyers are interested and able to purchase the property. Tenancy in Common (TIC) units often have fewer potential buyers, leading to lower demand and typically lower prices. However, TIC properties with special features—like potential for conversion, great views, prime location, high-quality finishes, or historical significance—may still attract higher prices.

Kevin K. Ho + Jonathan B. McNarry

Understanding Property Taxes in Tenancy in Common (TIC) Arrangements

In TIC arrangements, property taxes are handled differently compared to other ownership types. Here’s a simple breakdown:

Single Tax Bill. Typically, a single tax bill is issued for the entire property, not separate bills for each owner based on their share.

Joint-and-Several Liability. All owners are collectively responsible for the entire tax amount. If one owner doesn't pay, the others may have to cover the full bill.

Tax Deductions. Owners can usually deduct their share of property taxes on their income tax returns. If the tax liability is shared, each owner deducts what they paid. In some areas, you can deduct a percentage based on your ownership share.

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