Tag Archives: TIC

We Never Said Playing The (Condo) Lottery Would Produce A Win

2010 Condo Lottery: Previous participation may not yield additional tickets

Dear Plan C Member,

Ticket sales for the 2010 Condo Conversion Lottery have been announced by the city and will begin on Monday, November 23rd (additional information can be found here).

As you may be aware, it has been the practice of the City to issue additional tickets to buildings that can substantiate unsuccessful past participation. Specifically, the rules and instructions issued by the City’s Department of Public Works (“DPW”) for the 2009 lottery (ORDER NUMBER 177,881) stated, “Multiple tickets for any building will be sold based on the current 2009 lottery and proof provided for each year of past unsuccessful participation; that is one (1) ticket for the 2009 lottery, one (1) ticket for unsuccessful participation for any and all of the lotteries during the 1990-1994 period, and one (1) ticket for each year of unsuccessful participation in the 1995-2008 period.”

Recently we learned that the City may be denying additional lottery tickets to buildings that qualify with the minimum qualifications (summarized generally as: one owner-occupied unit for each of the last three years in 2-4 unit buildings, and three owner-occupied units for each of the last three years in 5-6 unit buildings). Historically, lottery priority and the issuance of additional tickets have required that one of the qualifying owner-occupants has been an owner (but not necessarily an occupant) during each of the previous lottery losses. The change for the last couple of years and for 2010 is that DPW appears to have a new interpretation of written law. To establish priority credit (additional tickets), DPW is requiring that each of the qualifying owner-occupants be the same original owner occupants that were unsuccessful in past lotteries.

Simply put, your building might qualify for the 2010 lottery and receive one ticket, but unlike in years past, may not be entitled to additional tickets based upon unsuccessful previous lottery participation.

We are reaching out the membership of Plan C to see if there are other TIC groups where this situation is likely to have an impact. If you’re facing the same issue, or would face this issue if one of your fellow TIC co-owners were to sell their interest, let us know and we will put you in contact with other similarly situated people. Send us an e-mail at, info@plancsf.org.

Collective action by affected TIC groups (including possible litigation) is more likely to succeed than individual efforts.”

-DPW Condo Lottery Information Page

Ask Us: Do We Have To Use Bank Of Marin?

Where readers ask and we (the community) try to answer:


My husband and I are considering purchasing a TIC unit in the Marina. The owners currently have fractional loans through the Bank of Marin. If we did purchase, would we be locked in to their loan rate/term or could we negotiate? Could we work with lenders other than Bank of Marin? We have excellent credit and could put down 50%+ so we’re
hoping we could get a good rate.

Many thanks for any comments!

Our follow up email:

My first question, if you can put 50% down, why not just look for a condo? How many units in the building? Which real estate agent are you working with? The final, are you okay with me posting your question to the site to get multiple answers?

Thanks for reading theFrontSteps and thanks so much for you email.

I’m not a fan of TICs, but I’m willing to hear you out. ;-)

The reply:

Thanks! Yes, fine to post it if the focus of the answers will be on
financing and not whether or not to buy a TIC – we already know the

We are currently in a condo and are considering condos as well but this unit’s price is much lower than comparable condos (we’ve been looking casually in the Marina for over a year now) the location is perfect (on bedrock, quiet part of the Marina). We’ve researched TICs and are willing to take the risk if we can get a good financing package. So our question isn’t whether or not to buy a TIC, it’s whether or not we have to work with the current lender (Bank of Marin) and also what typical financing for TICs looks like (the current owners have a fixed rate for 10 years and then a balloon payment).


You’re welcome. Anyone care to elaborate?

Ask Us: Remaining TIC Fractional Lenders

Where the readers ask and we (the community) try to answer:

Hi, just come across your site, very informative.

I’m trying to find TIC Fractional Lenders for a 3 unit + 1 unwarranted [unit] building in SF. We purchased it last October, have completed our renovations, 2 units will be owner occupied. We’re planning to go to Andy Sirkin to draw up a TIC agreement, and refinance hopefully with cash out. We now have a group loan @ 6.75%, no pre-pay penalty.

I heard Bank of Marin is out of the TIC market. How about Sterling and Circle, any other lenders available? Appreciate any info and recommendation. Thanks!


Thanks for your email and question. At this time we only know of Sterling Bank, and Ron Whitney at Zephyr real estate says that a “7×7 Group” also does Fractional TIC loans. Maybe the readers can provide further insight. Regardless, good luck and thanks for reading theFrontSteps.

TIC? Got Cash? To The Front Of The Line Please…

Good news on a Monday morning:

-Waiting to go condo is San Francisco’s version of waiting for Godot [seeing that phrase a lot lately…good on ya Malcolm.]

Building owners can spend years vying for one of 200 condo-conversion slots awarded annually via a lottery. But this year San Francisco is considering letting people skip the line, offering a one-time chance to the hundreds of folks on the lottery list to go condo now – for an extra fee. The goal is to generate more revenue for the cash-strapped city and to create building-industry jobs, because condo conversions generally require some construction work to bring buildings up to code.

-A proposal to expedite condo conversion would require approval by either the supervisors or the voters – no easy task in a city where housing issues are famously contentious. Tenant advocates say the practice hurts renters who get evicted when buildings convert to tenancies in common, the step before going condo. Previous proposals for increased condo conversions have failed miserably.

-“It’s a win-win if the fee is not too high,” [says one TIC owner]. “The city also will make more money when property taxes go up, when they reassess the units (as condos rather than TICs).”

On the other hand, TIC owner Daniele Mills, an administrative assistant at Genentech, said she thinks the proposal doesn’t seem democratic.

“It has a lot of repercussions for people with less income than other people,” she said. “The lottery seems more fair.”

Nothing in life is fair. It’s kinda like going to a club and tipping the doorman to get in, skip the line, and party on, instead of losing your buzz waiting in line.

Proposal: Pay fee, skip condo-conversion line [SFGate]

One Partner In A TIC Defaults, The Other Paid Cash: What Happens

Pulled from the intertubes:

“Does anyone have experience with a client who bought into a 2 unit TIC and paid all cash and the partner had a loan? In particular, what type of legal protection did they get in case of loan default by the mortgaged TIC partner.



It should be covered under the TIC agreement, allowing one partner to force a sale in the case of default.


I have no experience with this exactly but have been through quite a bit on the TIC front.

My thoughts are as follows:

If the loan is fractional and the all cash buyer’s name is not on it .. then, of course, there is no liability. The buyer becomes a co-tenant with the bank.

If the all cash buyer is on the loan then his/her credit will get slammed .. and a foreclosure would be on the whole property (including their interest). That is why the TIC agreement enables the all cash buyer to use reserve fund to pay the mortgage, then foreclose on the co-tenant and sell the interest. The bank may or may not allow them to assume the loan during this bridge period .. the bank may (perhaps) not find out for a while.

Again, this is my opinion .. no experience in the matter and I have, no doubt missed a few things.


There would have to be a default fund, which is usually 6 months worth of payments. The TIC agreement by Sirkin has that built in as well as remedy for default by a partner.


I sold a 2unit bldg recently where there was a big discrepancy in the loan amounts for each partner, maybe the situation is analogous to yours, and I think the TIC agreement itself (Sirkin) spelled out that any default on the loan payments by one partner which might jeopardize the bldg or put at risk of foreclosure, etc., triggers a sequence of options including buy-out, forced sale, etc, which protects the other partner. I think those protections would apply even if the all-cash partner was not on the loan at all.”