Taking an existing real estate development and converting it to a condominium can be a solid solution to today’s housing shortage. Before you begin, however, there are a few things you should understand about the process. With specific legal requirements (including renovation particulars), it’s best to work alongside an experienced attorney who can truly represent your interests throughout the project. To help you get started today, we’ll discuss some common questions we often get.
What is a Condominium Conversion?
Essentially, it’s when the owner of a building containing two or more units decides to subdivide the property into individually-owned condominiums. Sometimes this involves real estate that was previously an apartment complex, but you can also convert former schools or even factories in the right situation. Because you’re implementing a subdivision of property, you will need to prepare and then record an official declaration among the applicable land records office for the real estate in question. This process involves complying with any applicable local, state, and potentially federal laws to ensure you’re submitting the correct documents to the proper jurisdictions. Fortunately, at The Law Offices of Kirk Halpin & Associates, P.A. can help you navigate these requirements.
What expenses are associated with this process?
With a condominium conversion, the costs can vary wildly depending on the scope of your project. There are some fixed costs, such as recording fees and estimate for preparing a condominium plat that we can help you anticipate in advance. Often the largest, and most unpredictable, expenses concern the renovation(s) itself. When you’re converting a large building, a number of code violations are likely to pop up. Depending on the age and original use of the property, you could have your work cut out for you.
While you don’t necessarily have to modernize everything, you do have to correct any code violations or illegal structures/modifications left by previous occupants. Consider utilizing a private inspector before reaching out to any local city inspectors. A private professional can assess the property and give you an estimate for conversion before you actually begin the work. Once you have an official city building inspection, though, you’ll be obligated to complete the recommended work. Whether or not you actually decide to proceed with the conversion.
What happens after the renovations are complete?
Well, then comes the key part of this business: selling your new condominiums! When selling each individual unit, we can help you to prepare contracts and negotiate the terms needed to fill your condominium complex. We’ll also help to ensure you have the proper master condominium insurance in place, as well as help anticipate likely changes with regard to property taxes.
Down the road, if you want to refinance and/or sell your real estate, we can also advise you on this transaction. By evaluating current market conditions, we can maximize on the opportune times to transfer the property. If need be, we can also assist you in acquiring financing. We represented a client several years ago through a complex condominium conversion of a 298-unit apartment complex in Montgomery County. Together we worked through the purchase of the original apartment complex, the renovations, and the eventual sale of all units. This project in excess of $50 million was a coordinated effort on the part of our office and our client. We were very honored to be a part of such a large undertaking right in Montgomery Village, Maryland!
If you have any questions about this process or other real estate matters, please feel free to contact us directly. Our office excels at real estate law, and our experienced attorneys will help you navigate any issue that comes your way. You can trust The Law Offices of Kirk Halpin & Associates, P.A. with all your development needs. See how our results-driven approach can move your business forward!