The flexibility in the real estate management is one of the trends in the contemporary world. Many properties that have sole proprietorship rights can be converted to units in which people can purchase the title – the units can be seen as condominium. In this article, you will be familiar with what condo conversion is all about, sit tight and have a happy reading.
What is condo conversion?
In a holistic view, condo conversion is an activity or a process in which a property or real estate is converted from a property with sole proprietorship rights whereby people can own the title by purchasing one or more units. It is important to know that condo conversion is arguably practiced all over the world, and it provides opportunities for people to purchase title to the apartment units they occupy; however, in some instances the practice is being abused for selfish gains which make the government becomes aggressive in its regulation. Many experts suggest that the main benefit of condo conversion is, real estate are make affordable to people in locations where single family homes are relatively expensive to buy. However, condo conversion is often criticized for setting rental markets on pressure, because many landlords tend to utilize this opportunity to convert their buildings where rent is predominantly in place to condos with the view of making more profits. For example a 7 Units apartment building worth almost $1m as a single apartment after going through the condo conversion with individuals units being sold out, the final worth of that building will triple the original amount; that is why many property owners find this structure interesting and profitable.
Condo conversion process
There should be residential apartment’s buildings, an estate, or an industrial structure for condo conversion to take place. Also, government plays an important role for condo conversion success through approval of the offer plan initiated by the owner of the building. The way it’s being done is that, people who are able to buy the title to a particular unit, have to join the condo association for legal reasons and will be required to pay fees that cover maintenance and miscellaneous cost attached to the building. The owner of the property, through the condo association will initiate the process for anyone who wishes to buy a condo, the request must be approved by the attorney general of the government as well as the association and everything must follow according to the guidelines set in place for this purpose. All in all, the government will be the final say in all condo transaction to avoid abused practices.
Condo conversion san Francisco
Let’s take a case study of San Francisco and see how condo conversion is being done. In San Francisco, condo conversion rules are strictly followed, so we are going to share some a little bit.
- Building with rented units must adhere to the requirements before condo conversion takes place. That is to say, the tenants of the said building will have the right and opportunity to buy after conversion.
- Buildings that have more than 6 residential units are considered ineligible for conversion.
- Buildings with 2-6 residential units might be considered eligible on certain conditions.
- Buildings with eviction history may be disqualified for condo conversion, because of the complexity on eviction rules.
- Tenants buyout may delay or disqualify the building from been converted, due to the flexibility of the occupancy duration requirements.
In conclusion, we have seen what a condo conversion is, and we have seen some of the rules involved in condo conversion – taken San Francisco as a case study. The article is not meant to give you a detailed condo conversion process, but an overview of the structure as used in the real estate management. The overall idea is; condo conversion can help both tenants who are able to buy title of property units, as well as landlords who may have the opportunities to maximize profits through this.