Condo & TIC Conversions

TICs (Tenancies In Common) are usually the first step for removing housing from rent control to create owner-occupied housing for the profit of real estate investors. TICs are joint ownership of a building where each owner has a side agreement to only occupy a single unit although the owners have joint liability and usually a shared mortgage.

Tenants-in-Common (TIC) conversions exempt from San Francisco condo conversion law

Real estate industry friendly courts have thwarted all efforts to date to close the loopholes in the city’s condo conversion law which allow an unlimited number of TIC-type condo conversions. TICs are also exempt from tenant protections in the city’s condo law (in particular, tenants do not get the first right of refusal to buy their units, tenants do not get relocation and senior or disabled tenants can be evicted).

State Bureau of Real Estate regulates TICs in buildings with five or more units

The California Department of Real Estate, though, continues to regulate TICs as condominiums but their jurisdiction is limited to subdivisions of 5 or more units. Thus TICs in 5+ unit buildings must go through the state subdivision process before the units can be sold. State regulation does not limit the number of TICs nor give tenants any protections, but it does make converting to TICs considerably more difficult.

Tenants living in buildings with 5 or more units, where the landlord is selling the units as TICs, can put an end to the sale by filing a complaint with the California Bureau of Real Estate. The appropriate forms and instructions are available here.

You can still fight a TIC conversion. Be ready from day one!

If your building is being marketed as a “tenancy in common” (TIC), then it’s being sold as condos.  A TIC conversion, however, is exempt from the condo conversion law. You cannot be evicted for a TIC conversion—the landlord must have a just cause under rent control. Usually Ellis evictions are used. Owner move-in evictions can no longer be used for TIC conversions.

Landlords will also try to buy people out or coerce them out (or usually a combination of both). Remember, you cannot be evicted just because a building is being sold or just been bought.

The best thing to do is to fight the conversion. Don’t worry about which “just cause” will eventually be used. If the landlord can’t sell the building, then no one will be evicted. Start fighting the day a “for sale” sign goes up.  Potential buyers often have not thought through the fact that they will be evicting someone or evicting a family or a senior.  Nor have they usually thought through what it might cost in money and time to evict someone.  They’re thinking and hoping that you will move out the moment they buy the building.  Educate prospective buyers!  Let them know they will be evicting people and what that will mean to those people, as well as what it will mean to the landlord’s pocketbook and time schedule.  If you show that you will put up a fight, you can probably convince almost two-thirds of prospective buyers that they don’t want to buy your building, because it looks like a lot of hassle.  And maybe you can slow down the process so much that the sale as condo units becomes unprofitable.  Many tenants have fought their condo conversion evictions this way.  Try it!

Some Suggestions for Fighting  a TIC Conversion

Don't go out of your way to cooperate

The realtor will want to be showing your apartment all hours of the day and on short notice to prospective buyers.  Remember, the law says the landlord must give you 24 hours written notice before going in your apartment and that such access is during “normal business hours.”  Don’t feel forced into agreeing on constant open houses or buyers walking in and out at all times with little or no notice.

Be careful, though, that you don’t cross the line and refuse all access, since the law says the landlord has a right to access to show the apartment when it’s up for sale—just follow the law and allow access with proper notice and at proper times.  Also, don’t sign any “estoppel agreements” or anything else the landlord or realtor wants you to sign.  These are for the benefits of the buyer and seller and can only hurt you. You don’t have to sign anything–why make it easy on them.  And be creative in how you cooperate–delay your cleaning for a few days so the place is a mess for their open house; invite friends over for a noisy Super Bowl party!

Put up signs

Signs in your window and on your door and inside your apartment which say things like “Buyers Beware:  We Will Fight Our Eviction To The End!”  or “Beware: You Will Be Evicting Children (Seniors/People with Disabilities, etc.)  If You Buy This Unit”  or Buyers: Ask Your Lawyer How Much It Will Cost To Evict Us.”  These signs will let potential buyers know they’re in for a fight and can get them thinking.  Play on their guilt and their self-interest (the money it costs and time it takes for an eviction).

Make flyers

Small handouts you can give to prospective buyers are very powerful, especially at “open houses.”  Describe yourself and other tenants and tell why you want to remain living there.  Humanize the eviction for them and most buyers will back off.  Again, let them know you plan to fight to the bitter end and play on their guilt and self-interest.  Also, if you know for a fact you have certain defects–a leaky roof or a heating system which never works or electrical problems, etc.–in the building, let the prospective buyer know about them.  Make sure you know for a fact that these defects exist.

Picket open houses

If an open house is set up, get your friends and neighbors together and set up a picket line that buyers have to cross.  Carry signs and give out the flyers and talk to people one on one.  You’ll be surprised at how many potential buyers just turn around and go home.  The Tenants Union can get together people who would love to come out to such a picket, so call us (282-6622) if you need help with this.

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