TICs in Silver Lake: A Buyer’s Guide

Is a TIC your path to owning in Silver Lake? If you love character buildings and design potential, a tenancy in common can open doors that condos and single-family homes might not. The structure is different though, and the details matter. In this guide, you’ll learn how TICs work, how financing really looks, and the Silver Lake-specific checks to run before you write an offer. Let’s dive in.

TIC vs condo: how ownership works

Ownership and title

In a tenancy in common, you buy a fractional interest in the entire property. Your deed reflects a percentage share rather than a mapped unit. You and the other owners share the land and building, and your right to occupy a specific unit is set by the TIC Agreement.

A condominium gives you fee title to your individual unit plus a shared interest in the common areas. Condos are created by a recorded condo map and CC&Rs, and they are governed by California’s Davis-Stirling Common Interest Development law. TICs are not typically governed by Davis-Stirling unless converted to condos later.

Rules and governance

TICs run on the private TIC Agreement. This contract sets the rules for assessments, repairs, reserves, insurance, subleasing, transfers, buy-outs, and dispute resolution. Since there is no standard statewide TIC statute, agreements vary. Review the entire agreement and any amendments to understand voting thresholds, default remedies, and how major decisions are approved.

Resale and conversion

Historically, TIC interests can be less liquid than comparable condos. Financing is more limited, which can reduce the buyer pool and affect resale pricing. Some TIC properties may later convert to condominiums, but conversion requires a separate process, city approvals, and costs. Treat conversion as a potential option, not a guarantee.

Financing a TIC in Los Angeles

Loan types you’ll see

TIC lending is specialized. Many conventional lenders and secondary-market investors do not purchase loans on TICs, so buyers often work with:

• Portfolio lenders and credit unions that keep loans on their books.
• Specialty lenders familiar with TIC agreements and building-level underwriting.
• Private lenders or seller financing for unique cases.
• Cash purchases when speed or structure demands it.

You may encounter two structures:

• Individual TIC loans secured by your fractional interest. Lenders will review the TIC Agreement, building finances, and other owners’ profiles.
• Blanket or master loans that encumber the entire property. Each owner’s interest shares this obligation, which increases exposure if another owner defaults and can complicate resale or refinance.

Down payments and rates

Expect more conservative underwriting than typical condo loans. Many TIC lenders require 20 to 30 percent down. Rates can be higher because these loans are held in portfolio and considered higher risk. Some programs favor owner-occupants over investors.

FHA, VA, and conventional

FHA generally does not insure most TICs unless a project meets specific HUD approvals, which is rare. VA eligibility can be possible in limited cases but is subject to strict rules that many TICs will not meet. Conventional agency programs typically do not purchase loans on TICs that fall outside strict warrantability criteria. Confirm the program fit with a TIC-experienced lender early.

Smart pre-approval steps

• Get pre-approved with a lender that routinely closes TIC loans in Los Angeles.
• Ask the lender exactly which documents they will require from the TIC group.
• Confirm whether a blanket mortgage exists and whether your lender will lend in that scenario.
• Clarify owner-occupancy requirements, reserves, and rate locks before you offer.

Due diligence for Silver Lake TICs

Documents to review

Request a complete document package before you remove contingencies:

• Recorded deeds for each TIC interest.
• Full TIC Agreement and all amendments. Look for transfer rules, Right of First Refusal, voting thresholds, default remedies, assessment procedures, subleasing and renovation rules, and sale or refinance approval standards.
• Title reports for the entire property and for the specific fractional interests. Check for liens, easements, judgments, and any blanket loan.
• Operating budgets, recent financials, reserve analysis, and any special assessments or delinquencies.
• Master insurance policies, including property and liability. Confirm whether earthquake coverage is in place or declined.
• Minutes of owner meetings and notices of litigation.
• Building permits, Certificates of Occupancy, and any code violations.
• If applicable, rent roll and leases, especially where RSO protections may apply.
• Past inspection reports and contractor invoices for major work.

Site and building inspections

Silver Lake’s hills and older structures deserve careful attention:

• Structural inspection by a licensed structural engineer, especially for hillside properties, retaining walls, foundations, and potential soft-story conditions.
• Geotechnical evaluation if the building sits on a slope or shows movement, or if significant grading or basement work has been done.
• Seismic review. Determine whether the building is subject to Los Angeles soft-story or other seismic retrofit programs and whether work is complete and permitted.
• Pest and dry rot inspections. Request termite clearance where appropriate.
• Hazard review for slope stability, erosion, and drainage. Verify flood exposure, even if the area is not a typical floodplain.
• Mechanical and utility checks. Identify shared systems for plumbing, electrical, and heating, and confirm maintenance responsibilities.

Local LA checks to run

• Rent Stabilization Ordinance status. Many older Silver Lake buildings can fall under Los Angeles RSO, which affects rent increases, evictions, and buy-out expectations. Verify each unit’s status with city databases and records.
• Condo conversion and permitting history. Confirm whether prior applications exist, whether the building was legally subdivided, and whether any unpermitted work exists.
• Retrofit compliance. Check required soft-story or other seismic retrofits and the status of permits.
• Zoning and permitted uses. Verify allowable unit counts and whether planned changes align with zoning, ADU rules, setbacks, and hillside regulations.
• Historic or landmark considerations. Some properties may have restrictions on exterior changes.
• Hillside ordinances and past grading or drainage permits.

Title, reserves, and insurance

• Understand shared liability. A blanket mortgage means co-owners are tied together on the same debt. Clarify release provisions and refinance procedures.
• Review cross-default language and foreclosure risk if another owner fails to pay.
• Evaluate reserves. Low reserves can lead to special assessments, especially for seismic work, roofs, or hillside stabilization.
• Confirm master policy coverage and exclusions. Plan for individual interior coverage and consider earthquake insurance in Southern California.

Benefits and tradeoffs in Silver Lake

Potential benefits

• Access to character properties and architecturally interesting buildings that may be scarce in condo form.
• Potentially lower entry price compared to a similar-feeling condo, given financing complexity and buyer perceptions.
• Flexibility for thoughtful interior design and modernization, subject to the TIC Agreement and permits.
• A collaborative ownership model that can attract stewardship-minded neighbors.

Key tradeoffs

• Financing constraints can narrow the buyer pool and affect resale liquidity.
• Shared liability can increase risk where blanket loans or high assessment delinquencies exist.
• Governance complexity varies by agreement. Supermajority approval for major decisions can slow action.
• Regulatory factors like RSO, retrofit mandates, and hillside rules can impact costs and timelines.

Design and renovation potential

Silver Lake TICs often sit in older duplexes, triplexes, or small complexes. Many buyers pursue sensitive updates that honor original character while improving function. Before you plan, confirm the following:

• What the TIC Agreement allows for interior renovations, window changes, exterior modifications, and mechanical upgrades.
• Whether your work triggers city permits, structural review, or historic review.
• If adding an ADU is feasible within zoning and whether co-owner approval is required. Clarify how common areas and boundaries are defined.
• Whether seismic or soft-story upgrades are pending, which may influence sequencing and budget.

Your step-by-step path

1. Get pre-approved with a TIC-experienced lender. Share a sample TIC Agreement early so underwriting expectations are clear.

2. Tour with a checklist. Note slope, retaining walls, parking, shared systems, and any signs of movement or deferred maintenance.

3. Request a full document package with your offer. Include contingencies for lender approval of the TIC structure, title review, building financials, and inspections.

4. Order inspections. Prioritize structural and geotechnical when hillside conditions are present. Include general, pest, and, if applicable, specialized system inspections.

5. Have a real estate attorney review the TIC Agreement, title, and any blanket mortgage terms. Ask about transfer provisions, default remedies, and buy-out mechanics.

6. Verify local compliance. Confirm RSO status, retrofit requirements, permits, and zoning with the appropriate city departments and records.

7. Negotiate protections. Consider escrow holds for known repairs, clear release procedures for any blanket loan, and remedies if undisclosed issues appear.

8. Plan for reserves and insurance. Budget for assessments tied to seismic or hillside work and confirm earthquake coverage strategy.

Buying a TIC in Silver Lake can be a smart, design-forward move when you pair the right home with thorough due diligence. If you want a seasoned, discreet guide to help you navigate financing, documents, and inspections, schedule a confidential consultation with The Sher Group.

FAQs

What is the main difference between a TIC and a condo?

• In a TIC you own a fractional interest in the whole property with rights to occupy a unit under a private agreement, while a condo gives you fee title to an individual unit plus shared common areas under recorded CC&Rs.

How is TIC financing different from condo loans?

• Many mainstream lenders do not finance TICs, so buyers often use portfolio or specialty lenders, expect 20 to 30 percent down, and sometimes higher rates compared to conforming condo loans.

What should I look for in a TIC Agreement before buying?

• Review transfer and Right of First Refusal terms, voting thresholds, default remedies, assessment rules, subleasing and renovation provisions, and how sales or refinances are approved.

Why do Silver Lake TICs need extra structural review?

• Many buildings are older and sited on hillsides, so structural and geotechnical inspections help evaluate foundations, retaining walls, slope stability, and soft-story conditions.

How does Los Angeles’ Rent Stabilization Ordinance affect TICs?

• If any units are subject to RSO, rent increases, evictions, and buy-out terms are regulated, which can influence income expectations and owner move-in strategies.

What is the risk of a blanket or master loan on a TIC building?

• A blanket mortgage encumbers the entire property, creating shared liability; if another owner defaults, it can affect all owners and complicate resale or refinance without agreed release procedures.

Can a TIC convert to condominiums later?

• Some TICs can convert, but conversion requires city approvals, costs, and compliance with condo regulations, so it should be viewed as a possibility, not a certainty.