Steps in Undertaking a Condominium Conversion

​Condominium conversion is the process of converting rental apartment units into condo units. The difference between the two is that with rentals, tenants lease the property they live in, while with condos, residents own the property. As condo owners, they are also partial owners of common areas, gyms, pools, and other shared spaces, and must pay associated dues.

Converting a multifamily building to condos starts with consulting both a Realtor and a real estate attorney. The first helps define the competitive market landscape and whether such a process makes financial sense. The second assists in searching a specific property on a register and ascertaining just what legal obstacles, if any, stand in the way of the proposed conversion process.

If the decision is to move forward with the project, the owner now has an engineer draw up and certify drawings of the property’s interior and exterior spaces “as-built.” The real estate attorney uses these as a basis for further documentation, including master deed, condo association and fee creation, and rules and regulations defining the association. The association definition will include such things as permissions for using common area elements and pet restrictions. A master insurance policy is also required, and the property owner will need to coordinate public utilities metering per unit with municipal authorities for any utilities that were previous covered by the owner.

Robert Palley

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