Is Your Building being TIC'ed?

There appears to be a growing trend for land owners to get out of the rental business by using the Ellis Act to evict sitting tenants and then to re-sell the units under a Tenancies In Common Agreement (TIC). At least, this trend appears to be growing in Los Angeles as reported by "Curbed Los Angeles." 

But, exactly what is a TIC? A good explanation of the ownership model is explained in this article, "TIC's could change LA's housing market."

According to the article linked here, Mitch O'Farrell, Los Angeles City Council-member, is "trying to get a handle on just how many rent-controlled tenants are being pushed out to make way for" TIC's. "O'Farrell recently introduced a motion calling on the city planning department to explore creating a tracking system for the number of rent-controlled apartments that have been flipped into TICs." 

A good primer on what a TIC is, how to create one, how to secure a mortgage, and state requirements has been developed by Goldstein & Gellerman. Click here to review.

The California Department of Real Estate provides TIC guidelines here.

The San Francisco Tenants Union advises tenants on how to fight the development and sale of a TIC here: https://www.sftu.org/newtic/ 

Last, Berkeley's municipal code Chapter 21.28, "Condominiums and Other Common Interest Subdivisions" states under B.M.C. 21.28.020A(4):

"The City of Berkeley discourages tenancies in common (TICs) as a less desirable form of home ownership because this form of ownership may be less separable while carrying greater financial and legal risks, despite initial costs appearing more affordable than condominiums, community apartments and stock cooperatives."

If your building is being Ellised, perhaps it's in the plans to sell the units under a TIC relationship. This is definitely worth investigating.