Looking for a way into West Hollywood without paying full condo prices? If you have heard about TICs and feel unsure where to start, you are not alone. With the right prep, a Tenancy in Common purchase can open doors in a tight market. This guide breaks down how TICs work, financing and insurance basics, practical risks, and how they compare to condos so you can decide with confidence. Let’s dive in.
What a TIC is
A Tenancy in Common, or TIC, is co-ownership of one property where each buyer holds a fractional interest in the whole parcel. You do not own a separate, mapped unit like a condo. Instead, you and other co-owners share ownership and use rights by contract.
Most buildings use a written TIC Agreement. It sets percentage shares, how you split expenses and taxes, voting rules, building maintenance and reserves, rental rules, transfer procedures and default remedies. Financing can be structured as separate fractional mortgages on each owner’s share or through a single loan on the property, though individual financing is more common for buyers.
Why TICs appeal in WeHo
West Hollywood has a history of TIC conversions due to its mid‑century multifamily buildings and past affordability cycles. TIC pricing can be lower than comparable condos or single-family homes in the same area. For many buyers, that lower entry cost provides a path to owner-occupancy and more control than renting.
Financing reality
Financing a TIC is different from a standard condo loan. Many national lenders do not offer TIC programs, so buyers often work with specialty or portfolio lenders, local banks, or mortgage brokers who place TIC loans.
What to expect:
- Down payment: Often 20 to 30 percent, sometimes more.
- Rates: Typically a bit higher than many condo programs.
- Programs: Fewer low down payment options, and government-backed loans are limited and highly conditional.
- Occupancy: Many lenders require you to live in the property.
If the building has any shared liens or cross-collateral provisions, one owner’s default can affect others. Review loan and TIC documents with care.
Title and insurance basics
Title for a TIC interest is an undivided share of one parcel, which can add complexity. Title insurers vary in how they cover TIC interests. Ask for a written title commitment that spells out exactly what is covered and any exclusions.
Confirm building hazard and liability coverage, plus any gaps you need to cover with your own policy. Understand how premiums and deductibles are allocated among owners. Lenders will require proof of adequate building coverage and evidence that your interest is protected.
Local rules to check
In West Hollywood and the broader Los Angeles area, local ordinances can affect TIC ownership and operating costs. Before you commit, confirm:
- Rent control and tenant protections that could impact any existing or future rentals.
- Condo conversion rules that may govern multi-unit properties.
- Seismic retrofit mandates, including soft-story requirements, that can trigger capital upgrades or assessments.
- City compliance items like certificates of occupancy, permitting, and any code violations.
Risks to plan for
TICs work well when the agreement and finances are solid. Still, you should plan for these common risks:
- Collective exposure: Certain structures can expose all owners if one owner defaults or if litigation affects the whole parcel.
- Financing and resale: A smaller lender pool can slow sales and narrow your buyer audience when you sell.
- Governance issues: Weak rules or poor administration can create operational friction.
- Title and insurance gaps: Limited endorsements or exclusions can leave uncovered risk.
TIC vs. condo at a glance
Ownership and structure:
- TIC: You own a fractional interest in one parcel. Use rights are set by the TIC Agreement.
- Condo: You own a legally defined unit with a separate tax parcel and share common elements through an HOA.
Financing:
- TIC: Fewer lender options, higher down payments, and often owner-occupancy requirements.
- Condo: Broader program access if the project meets eligibility standards.
Governance and protections:
- TIC: Rules live in the private TIC Agreement. Fewer standardized statutory protections.
- Condo: Governed by recorded CC&Rs and an HOA within established condo law frameworks.
Resale and marketability:
- TIC: Smaller buyer pool and potential appraisal challenges due to fewer comparable sales.
- Condo: Typically easier to finance and appraise, with a larger audience.
Due diligence checklist
Use this list to protect your interests before you remove contingencies:
- Review the full TIC Agreement with a real estate attorney who knows TICs.
- Get a current title report. Read all exceptions and recorded documents.
- Verify building reserves, the operating budget, and recent financial statements and bank records.
- Ask for copies of any loans on the property, any notices of default, pending litigation, or past foreclosure activity.
- Obtain current building insurance policies and claims history. Confirm coverage and deductibles.
- Inspect the property thoroughly. Consider engineering or structural reports for seismic vulnerabilities if applicable.
- Confirm how property taxes are billed and allocated for undivided interests.
- Check city compliance: certificates of occupancy, permits, code violations, and any unpaid municipal liens.
- Talk to current owners about operations, past assessments, and maintenance issues.
Buying tips for West Hollywood
- Line up a TIC-experienced mortgage advisor early to understand down payment, rate, and timing.
- Ask the seller which lenders have financed other shares in the building. That can speed up approvals.
- Budget for capital items like seismic retrofit and plan for potential special assessments.
- Keep contingencies that allow time to review the TIC Agreement, title, insurance, and building financials.
- If you hope to rent in the future, confirm the TIC Agreement’s rental rules and how they interact with local tenant protections.
Is a TIC right for you?
A TIC can be a smart path if you value lower entry price, are comfortable with co-ownership, and are willing to do thorough due diligence. The tradeoffs include more complex financing, contract-driven governance, and a narrower resale pool. If that balance works for your goals in West Hollywood, a TIC is worth a close look.
If you want local guidance from offer to close, reach out to The Suarez Team. We can help you navigate the steps, from evaluating the TIC Agreement to planning a clean, financeable offer.
FAQs
What is a Tenancy in Common and how does it work?
- In a TIC, you buy a fractional interest in one property and use rights are set by a private TIC Agreement rather than a condo map and HOA.
How do you finance a TIC in West Hollywood?
- Most buyers use specialty or portfolio lenders, expect 20 to 30 percent down, slightly higher rates, and owner-occupancy requirements.
Can you rent out a TIC interest in West Hollywood?
- It depends on the TIC Agreement and local tenant protections; confirm rental rules and any city requirements before you rely on rental income.
What happens if a co-owner defaults on payments?
- Depending on loan structure and the TIC Agreement, other owners can be affected through shared liens or provisions, so review default remedies closely.
How do TICs differ from condos for buyers?
- TICs have undivided ownership, fewer loan options, contract-based governance, and a smaller resale pool, while condos offer mapped units, broader financing, and HOA frameworks.
