How TIC conversions work in San Francisco: 1–4 units vs. 5+ units

Small-building document fees

$2,600–$3,600

Specified 2–4 unit pre-sale configurations [S1]

Larger-project process budget

≈$25,000

Includes the $6,900 legal flat fee [S2]

Larger-project planning window

3–7 months

Supplied Sirkin estimate; not a DRE guarantee [S2]

Data: Public sources reviewed October 22, 2026. SirkinLaw fee examples are indicative and require a current project-specific quote. MLS resale context through October 22, 2026, extracted October 23.

What does a TIC conversion actually change?

In San Francisco, a TIC conversion usually means organizing a property so buyers can own undivided percentage interests while a co-ownership agreement assigns each buyer exclusive use of a particular home. The buyer owns a share of the whole property. The agreement supplies the occupancy rights. A condominium instead has a separately defined ownership interest created through a legal subdivision. These are different transactions. [1]

This guide focuses on occupancy-based residential TIC sales, rather than passive investment syndications or 1031-exchange structures. The practical dividing line is usually a property with up to four legal units versus a property with five or more. Count the legal units across the proposed project, including mixed-use configurations; do not assume selling fewer shares takes a larger building out of state review. [2]

How a 1–4 unit TIC conversion works

For a typical two-, three-, or four-unit property, the work centers on verifying what exists, designing the co-ownership arrangement, and aligning the sale with the lender and title company. Creating contractual occupancy rights is distinct from seeking City approval to subdivide into condominiums. Building permits, legal-use rules, and tenant protections remain separate matters. [1, 7]

A one-unit house needs special treatment. Two people can co-own a house, but percentage ownership does not create a second legal dwelling or authorize a separate apartment sale. The attached Sirkin schedule starts at two units and provides no one-unit price. For a single home, clarify whether the goal is ordinary co-ownership, a legal new unit, or an actual subdivision before selecting the documents.

• Establish the starting point. Assemble title, the residential building record, permits, leases, rent history, and information about any prior tenant departures. Ask the appropriate professionals to resolve discrepancies in legal unit count before marketing.
• Design the ownership schedule. Specify the percentage interest, dwelling, parking, storage, outdoor areas, shared access, and responsibility for repairs associated with each proposed purchase.
• Prepare the agreement. Ask counsel to address expense allocation, voting, reserves, insurance, defaults, transfers, dispute resolution, and the seller’s role while interests remain unsold.
• Confirm financeability. Have the lender and title company review the structure early. A financing plan is useful only if it supports the proposed transfers and closing sequence.
• Coordinate disclosures and escrow. Confirm the documents and funds required for the first closing and each later closing. Keep ownership percentages, occupancy assignments, and purchase documents consistent.

Sirkin Law pre-sale fees for 2–4 unit buildings

SirkinLaw APC’s pre-sale service scope describes a limited pre-sale program for sellers who intend to sell their entire building, prepared before future TIC owners are identified. It excludes owners who plan to remain beyond the active marketing period. A seller keeping a unit should obtain a different scope and quote rather than assume this program applies. [S1, p. 1]

The core package includes a brief initial consultation, draft documents based on the building, and insertion of buyer, price, space-assignment, loan, and lender information for the first buyer or first group closing together. The form does not promise unlimited customization or completion of every later sale at the flat fee. [S1, p. 1]

Additional questions and post-draft revisions are billed at $690 per hour in six-minute increments. One increment is $69; two hours would be $1,380. The email policy generally charges at least one increment per received message, including copied messages, with a narrow scheduling exception. Flat and hourly fees are due before delivery. Obtain a current written engagement and clarify later closings, retained interests, and revisions before budgeting. [S1, p. 1]

What changes for a 5+ unit TIC conversion?

For an initial offering of occupancy-based TIC interests in a larger project, plan for the California Department of Real Estate public-report process. DRE’s published TIC guidance addresses parcels collectively containing at least five legal units, including at least one residential unit. The trigger is not simply whether five buyers happen to close together. Exemptions and true resales have specific conditions and need counsel’s review. [2]

DRE explains that a public report is required before marketing covered subdivisions and must be supplied before a buyer becomes obligated. It discloses the project, governing arrangements, costs, assessments, and other material facts. If the team proposes preliminary marketing under a preliminary report, counsel should define exactly which activities are permitted; a reservation is not the same as permission to close. [3]

• Determine the approval route before advertising individual TIC homes. Ask counsel to document the applicable public-report requirement or exemption.
• Assemble the application around one consistent plan: proposed interests, occupancy assignments, title, financing, governing documents, building information, and the operating budget.
• Model shared expenses and reserves. Include the period during which some interests remain unsold and clarify who funds the associated obligations.
• Resolve financing and escrow protections. Blanket debt and staggered sales can introduce additional reserve, security, or release requirements; have the team quantify the actual cash or bonding needs.
• Obtain the appropriate report and clear closing conditions. Distribute disclosures, coordinate lender and title requirements, then close only when the approved structure and transaction documents agree.

The larger-project Sirkin document estimates 3–7 months for the public-report process. It describes typical deficiency notices around 60–90 days after application submission and approval around 30–45 days after responses. Those stages sit within the process estimate; they are not extra months to add automatically. These are planning ranges, not a DRE service commitment. Ask the team for a property-specific schedule and allowance for revisions. [S2, p. 1]

Five-plus-unit costs: Sirkin’s $25,000 process budget

SirkinLaw’s larger-project planning estimate is approximately $25,000 for the TIC public-report process, covering attorney fees, budget preparation, mapping, and application fees. Its $6,900 legal flat fee is already included in that estimate. Adding $6,900 again would double-count the attorney component. This is a professional-services and application budget, not a complete building sell-down budget. [S2, p. 1]

The two engagements also have different hourly rates: $690 in the small-building pre-sale form and $790 in the larger-project form. At the latter rate, one six-minute increment is $79. The larger engagement generally charges at least that increment for received emails, including copied messages, subject to its scheduling exception. Coordinate one clear round of feedback and confirm how written revisions will be billed. [S1, p. 1; S2, p. 2]

DRE’s July 2026 RE 605 schedule lists a common-interest final public-report filing fee of $3,000 plus $15 per interest, with $500 additional for an original preliminary report. DRE’s TIC guidance uses the common-interest filing route. On that assumption, five interests produce a $3,075 filing fee and six produce $3,090. These examples exclude professional services and other charges. Confirm the filing classification and fee at submission. [2, 4]

Financing, property taxes, and tenant rights

Compare individual fractional TIC financing with any proposed group loan. A separate fractional loan can reduce exposure to another owner’s mortgage default, while a shared loan links owners to the same debt. Shared maintenance, insurance, tax, and governance obligations still need a workable agreement. Ask the lender what happens when an owner sells or refinances. [1]

San Francisco’s Assessor describes a TIC as co-ownership of a single parcel, treated together for property-tax billing. An individual assessed-value notification is not a separate tax bill. Review allocation and payment procedures with the title team and tax adviser; contractual expense shares do not themselves create separate condominium parcels. [5]

A TIC agreement is not a vacancy entitlement. Review existing tenancies and any proposed owner occupancy or tenant buyout independently under the applicable rules. Do not build a financial model that assumes tenants must move simply because ownership changes. San Francisco’s Rent Board publishes the current Rent Ordinance and related guidance. [6]

Will the TIC later become a condominium?

Evaluate condominium eligibility separately. Public Works currently lists its residential conversion application for two residential units only, while its website also contains ECP materials and program-specific updates. A qualifying two-unit owner-occupied building has a distinct conversion route, with occupancy and eviction-history conditions. Neither a three- or four-unit TIC nor a five-plus-unit TIC should be marketed as having an automatic condo path. [7, 8]

The City’s ECP update describes resumed processing following litigation settlement for applications within that program. That is not a general promise that a newly formed TIC can enter an open annual lottery or convert on a particular date. Obtain a property-specific eligibility opinion and current City confirmation before assigning value to future condominium conversion. [9]

A practical way to evaluate the opportunity

Begin with two scenarios: sell the building as one asset, or sell TIC interests under a documented, financeable plan. For each scenario, compare net proceeds after transaction costs, required repairs, carrying time, reserves, and the obligations that continue after the first sale. Treat higher combined asking prices as a hypothesis to test against comparable sales and actual financing availability.

The most useful first meeting brings together the property records, occupancy history, loan documents, a proposed ownership schedule, and a preliminary budget. Our role is to help frame the property and market questions and coordinate the conversation with qualified legal, lending, title, and tax professionals. Bring the building details before choosing a conversion strategy.

Use the TIC resale market as context, not a conversion pro forma

TurboHome’s citywide 2026 YTD MLS sample includes 234 TIC sales with a $1,243,000 median price, $1,083 median price per square foot and a 17-day median marketing period. The condo median is $1,275,000 and $1,124 per square foot over the same January 1–October 22 window. These aggregate medians can frame comparable selection, but they do not price the future interests in a particular building. [M]