Thursday, February 08, 2007

3400 Market

This looks like a wonderful top floor upper Market TIC, with historic charm, 2-levels, view deck and garden. There is no garage, but street parking is less of an issue in this part of town.

This is the "owner's unit" - there are two rental flats below. So the potential buyer of this TIC will have to be comfortable living in what I will call a "partial TIC" situation. Upon purchase the seller will grant you a percentage of the building based on the relative value of the upstairs unit. He (or she) would retain his (or her) ownership of the downstairs units. In other words, he would move out, and become your TIC partner while continuing on as landlord to the lower level tenants.

In my view an all owner-occupied TIC is far preferable to this mix of original owner, new owner and legacy tenants. Owner partners all have a significant stake in caring for the building and maintaining cooperative, neighborly relationships with each other. In a typical TIC situation, owners go through an evaluation and approval process of all building partners. And most TIC agreements even give owners the right to approve tenants, should any partners decide to let their flats.

In this case, you would be ceding that control. Should difficulties arise with either of the tenants living beneath you, you would have no effective means to remedy the situation. You could implore the tenants to be better behaved, but since you are not the landlord you have no authority to wield any legal threat. You might beseech your absentee TIC partner to take action, but he might make light of your complaints in order to retain the revenue stream from the rent.

So lovely and well-priced as this property appears, I would have to say no.


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