One of the most popular forms of property in San Francisco residential buildings is “Tenancy-In-Common” or “ICT”). This form of ownership is widespread in San Francisco when buildings cannot be converted into condominiums or are waiting to be eligible for condominium renovation. Unlike a condominium project where the owner owns a unit and an undivided interest in the common area, each owner of TICs has an undivided interest in the entire property. Exclusive rights to use certain parts of the property, such as units, courtyards, bridges, storage areas or car parks, are granted with the agreement of the parties. Such agreements, commonly referred to as ICT agreements, govern the rights and obligations of homeowners with respect to real estate, including investments, maintenance, repair, loan payments, property taxes, etc. Recognizing this fact, we have made changes to next-generation ICT agreements that aim to streamline the process of budgeting, assessing and paying bills. For example, we allowed the manager to adjust the budget himself without convening a group meeting or vote, provided that the adjustment was based on a mandatory element and the manager could document the costs. An owner who disagrees with the budget can challenge it, either by convening a meeting or by invoking a dispute settlement, but only after the payment of the resulting valuation. No one can refuse to pay on the basis of their intention to challenge the budget or the assessment. If the owner`s challenge succeeds, it will be refunded.
When an owner is personally audited for damage to another unit or common area, or for costs resulting from injury (for example. B, towing or removal of waste), he must first pay the assessment and ask for the refund by challenging its validity as part of the dispute resolution procedure. For more than a decade, taxpayers and their lawyers have entered into ICT agreements with reference to Rev. Proc. 2002-22 and hope that their agreements will not be interpreted as the creation of partnerships between the co-owners. The objective, of course, was to allow co-owners to participate in similar exchanges through the Internal Revenue Code (CRA) nr. 1031 of their respective interests.