Thinking about turning your Potrero Hill TIC into individually deeded condos? You are not alone. Many small buildings on the Hill were set up as TICs, and owners often want clearer ownership, stronger resale, and easier financing. In this guide, you will see the exact steps, timelines, and pitfalls to consider in San Francisco so you can move forward with confidence. Let’s dive in.
Why Potrero Hill matters
Potrero Hill has many 2–4 unit, wood‑frame buildings that began life as TICs. These properties often have mixed‑vintage systems and may need upgrades like seismic, egress, or utility separation. San Francisco’s planning, building, and tenant‑protection rules add complexity that can affect cost and timing. Understanding these factors early helps you build a realistic plan.
Start with feasibility first
Before you set timelines or budgets, confirm two decisive items: your tenant and rent‑control status, and the building’s physical condition. Getting clarity on these points will shape your entire approach.
Confirm property type and occupancy
Verify whether you have TIC fractional interests or tenants on leases. Gather current leases, rent rolls, and rent history. Note any owner‑occupancy and whether units are vacant or occupied.
Pull title and financial history
Order a current title report and check vesting. Identify all loans, tax defaults, liens, easements, and prior encumbrances. Unresolved title issues can block recordation later, so flag and address them early.
Walk the site for quick flags
Look for soft‑story characteristics, egress and fire‑separation concerns, and whether units have separate entrances and utilities. Photograph access points and note meter setups for gas, electric, and water.
Build the right professional team
A successful Potrero Hill conversion relies on a coordinated, local team. Key roles include:
- Real estate attorney experienced in San Francisco condo conversions to prepare the condominium plan, CC&Rs, disclosures, and handle recordation and lender consents.
- Title company and escrow officer to issue title commitments, clear exceptions, and record maps and deeds.
- Licensed surveyor to produce legal descriptions and the condominium map or plan for recordation.
- Architect or structural engineer to scope code upgrades, seismic or soft‑story needs, egress and fire separation, and any permit drawings.
- General contractor and specialty trades familiar with DBI inspections and local standards.
- Tax advisor or CPA to model reassessment risk and ownership impacts.
- HOA manager or consultant early on to build an initial budget, reserves, and operating plan.
- Tenant‑relations or relocation specialist if you have tenants, to manage notices, buyouts, and compliance.
- Real estate broker with SF condo experience to validate market positioning, buyer financing expectations, and post‑conversion value.
Step‑by‑step roadmap
1) Preliminary feasibility (2–6 weeks)
Deliverables: a scope memo, municipal issues list, and preliminary cost drivers. Confirm property type and occupancy, pull title, review rent control status and leases, and complete a quick site review. Main risks include title issues, tenant protections, historic constraints, and structural concerns.
2) Assemble team and due diligence (3–8 weeks)
Deliverables: a written budget range and conversion strategy. Hire a San Francisco conversion attorney, order an ALTA‑level title commitment and a preliminary survey, and engage a structural engineer or architect. Confirm Planning review needs and estimate relocation obligations if tenants are present.
3) Legal and mapping work (4–12+ weeks)
Deliverables: condominium plan and map, CC&Rs, proposed unit descriptions, and draft disclosures. Your attorney and surveyor prepare documents for the County Recorder. The title company confirms exceptions to clear, and lender subordinations or consents may be required.
4) Permits and construction, if required (2–12+ months)
Deliverables: permits, completed upgrades, and final inspections. Work often includes separate meters, fire separation and egress improvements, and seismic or soft‑story retrofits. Some projects require minimal work while others need substantial upgrades.
5) Final inspections, HOA formation, and recordation (2–8 weeks)
Deliverables: signed‑off permits, recorded condominium plan and CC&Rs, and new deeds for each unit. Finalize HOA budget, insurance, and open the HOA bank account.
6) Sales, financing conversions, and tax updates (ongoing)
Deliverables: listing materials, mortgage approvals, and assessor updates as needed. Lenders and buyers will request condo questionnaires, HOA documents and insurance, and sometimes owner‑occupancy or reserve evidence.
Timeline and budget planning
Timelines vary by building condition, occupancy, and scope:
- Minimal‑work map and record for unoccupied or aligned owners: 2–4 months.
- Typical occupied 2–4 unit with minor upgrades and required notices: 4–9 months.
- Occupied building with significant structural or utility work and tenant negotiations: 9–18+ months.
Plan across four cost buckets:
- Soft costs: attorney, survey, title, mapping, permits, engineering, planning consultant, broker, and escrow. For small projects these are often in the tens of thousands and rise with complexity.
- Hard costs: metering, seismic and fire separation, egress, and unit improvements. Scope drives totals.
- Contingency: 10–25 percent of estimated hard costs is common for older buildings.
- Ongoing and one‑time condo costs: HOA start‑up funds, reserves, insurance, and possible property tax increases after reclassification.
Tenant protections and rent control
San Francisco tenant protections can add obligations and affect your timeline. If units are occupied, expect structured relocation assistance or properly documented voluntary buyouts to be part of the plan. Engage tenant‑relations expertise early, follow notice rules precisely, and document communications to avoid complaints or enforcement.
Common pitfalls and how to avoid them
- Tenant protections and rent control: Plan early outreach and compliant relocation or buyouts. Align your schedule and budget with these obligations.
- Unresolved title issues: Pull a title commitment early and clear liens, judgments, and vesting problems before mapping.
- Co‑owner consent: Ensure all TIC owners agree on the process and timing, or plan for buying out dissenting interests.
- Underestimated building upgrades: Get a structural and code assessment up front and budget conservatively.
- HOA readiness and financeability: Prepare a realistic initial HOA budget, reserves, and insurance. Confirm lender expectations for small HOAs.
- Market positioning mismatch: Decide whether you aim for a turnkey resale or a lighter‑touch conversion and align scope and finish level accordingly.
- Recording compliance: Use San Francisco‑experienced surveyors and title teams to meet mapping and recordation requirements.
First 30‑day checklist
- Current title report, deeds, and any recorded encumbrances
- Recorded map or prior subdivision documents, if any
- Leases, rent rolls, and utility arrangements
- Recent DBI permits and inspection records
- Any existing survey or plat
- Photos of exterior, entries, and unit access points
- Owner contact list with ownership percentages
- TIC agreements or operating agreements
Key questions to answer:
- Are units occupied and are tenants rent‑controlled?
- Are there separate utility meters or shared metering?
- What mortgages exist and what consents will lenders require?
- Any historic or landmark constraints on the building?
- Visible soft‑story or structural issues?
- Exit strategy: hold and rent, sell all units, or a mix?
Financing and resale readiness
Lenders will review HOA documents, budgets, reserves, and insurance. Some are cautious with newly formed or very small HOAs, so confirm requirements early. Be ready with condo questionnaires, owner‑occupancy data if relevant, and reserve funding plans. After recordation you can market and sell units, subject to how quickly permits, inspections, and documentation are completed.
What we do for Potrero Hill owners
You want a precise, low‑drama process and a strong resale outcome. Our team coordinates the right attorney, surveyor, engineer, title, and contractor partners, sets a realistic budget and timeline, and positions the finished condos for maximum buyer demand. If you plan value‑add work, we can curate presentation and project advisory to align with market expectations.
Ready to explore your building’s path? Request a Confidential Consultation with Mollie Poe + Declan Hickey.
FAQs
Do all co‑owners need to agree for a Potrero Hill TIC‑to‑condo conversion?
- Converting and recording new deeds typically requires coordination among all owners, and dissenting co‑owners can delay or block a smooth conversion.
Can San Francisco tenants stop a Potrero Hill condo conversion?
- Tenants have strong protections that can add cost or delay if procedures are not followed, but they rarely have an absolute veto when requirements are met.
How long until I can list individual Potrero Hill condo units after converting?
- You can market and sell after recordation, with timing driven by how quickly permits, inspections, and recordation are completed and buyer financing is available.
Do I need a new survey or condominium map for a 2–4 unit building in Potrero Hill?
- Yes, an accurate survey and condominium map or plan are typically required for recordation with the County Recorder.
Will property taxes change after a Potrero Hill TIC‑to‑condo conversion?
- Conversion can trigger reassessment depending on transfers and county rules, so you should plan for possible tax changes and consult a tax advisor.
What do lenders look for with newly formed small HOAs in San Francisco?
- Lenders often require complete HOA documents and insurance, may ask about owner‑occupancy and reserves, and sometimes apply extra scrutiny to small or new HOAs.
