Like I said it's a diy condo. When you buy a condo you also buy shares in the HOA. When you buy a co-op (common in NYC and other places), you buy shares in a corporation with a right to use a specific apartment. In both cases you are essentially going into business with a bunch of people you don't know. Same thing for TIC
I own shares in a co-op and I've read the terms of the contract. This is accurate. The bank can foreclose on your shares and resell them. I don't recall if their sale is conditional on co-op board approval or not, but I'd guess not.
What I'm curious about is if TIC is commonly used on single-family residence where the owners are simply roommates. Otherwise, why not have a condo or co-op structure?
In SF, it's a complicated political issue. San Francisco instituted rent control. Then the State of California exempted SFH from rent control (including condos). There are a lot of older houses that have been converted into duplexes (upstairs/downstairs) or quads. These count as multi-family residences, subject to rent control. These people apply for condo conversion. San Francisco no likey, because then rent control doesn't apply.
So people sell as TIC. Rent control applies, but San Francisco is severely limiting condo conversion (there was a lottery, and priority rules, but I think they may have changed the rules since I last read up on the issue).
In other words, they would if they could, and when they are able to convert to condo the price goes up because you don't have rent control issues (which include things like just cause eviction, protected tenants, etc... very tenant friendly and onerous for a small time landlord).
There are also some Co-ops in SF, for similar reason, but those are usually for larger buildings due to corporate overhead and regulations.
I may have misunderstood you. I thought you were implying that banks were lending for single family residences and only getting a security in the individual's tenancy in common, not the entire residence. If you were just talking about using TIC to finance something like a duplex or triplex, with a TIC in the entire property but an assignable contract that basically has the same effect as a condo or coop agreement, that doesn't seem that crazy.
No, I think you understood right: banks get only security in a portion of the TIC. They can foreclose on your shares.
If you're interested, you can get a nice $7 million TIC unit
https://zephyrre.com/market-insights/tic-market-hits-new-highs-in-san-francisco/https://sf.curbed.com/2015/1/26/9998780/park-lane-sfs-100m-tic-finally-shows-off-pics-of-its-units