This month I am addressing a recent change in a TIC rule.
The old TIC rule had previously made condo conversions more difficult for owners of 2-4 unit buildings in San Francisco, but that has changed. Part of the section below is paraphrased from Andy Serkin, a popular TIC lawyer in SF…
The San Francisco Department of Public Works has announced it no longer needs the OK of the existing mortgage lender to allow 2-4 unit properties to be converted into condominiums. Before this change, The City wouldn’t record the “condo map” which marked the last step in the conversion process unless the lenders with mortgages on the property gave the OK for the conversion.
If a building applying for conversion could not get the lender to sign the map, a refinance with another lender was necessary, causing delay and imposing significant additional costs – appraisal fees, loan origination costs, and title and escrow expenses.
Although the new policy will allow some owners to complete their conversion, these owners will not be able to record their covenants, conditions and restrictions (“CC&Rs”) until they are ready to sell or refinance the condominiums. Lenders have to sign the “condominium plan” (an attachment to the CC&Rs which shows the spaces included within each condominium) as a condition of condominium formation.
This is a minor issue – as there is no reason to record the CC&Rs and condominium plan until you are ready to sell or refinance.
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Jason Russell, Broker
Rob Wolf and Associates
Residential & Commercial Financing
850 Montgomery Street, Suite 100
San Francisco, CA 94133
1-415-788-1334 – office
1-866-313-5709 – fax
Filed under: mortgage, tic , jason russell, mortgage, tic
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