How to Convert a Multi-Unit Building Into a Single-Family Home

House hunting for a Brooklyn residence you and your family can call your own? You will broaden your options if you are open to converting a multi-unit building into a sole dwelling.

Doing so involves time, assistance, money, renovations, and applying for what is called a change in the certificate of occupancy, but the trade-offs can be worth it. You will get more space and the luxury of not having to become a landlord.

The Advantages of Converting a Multi-Unit Building Into a Single-Family One

“This trend has been happening in all the five boroughs,” said Mercedes Lata, an expeditor with S & M Expediting in Brooklyn, of buyers converting multi-unit buildings into single-family ones. She concedes everyone has a different reason for tackling a conversion. High among those is gaining square footage.

“The buildings were usually one- or two-family homes that were divided into smaller units and are now being converted back,” said David Cunningham, an architect and owner of David Cunningham Architecture Planning in Brooklyn.

In Brooklyn, smaller buildings, such as three-story houses that were single families to start with, or circa-1900 two-story buildings that originally consisted of two floor-through units are most popular for conversion to single families.

On the other hand, for larger buildings, the most popular configuration is a two-family with a triplex owner unit over a floor-through rental.

“A four-story townhouse is a lot of space for a single family with one or two children,” explained Cunningham, adding that some find the extra tenant income useful.

Not everyone, however, wants to become a landlord or to forego their privacy. If you can’t find a single-family dwelling that meets your needs, scouring the real estate listings for two- or three-family options may suddenly open up possibilities where there appeared to be few.

The Disadvantages of Converting a Multi-Unit Building Into a Single-Family One

But who wants to tackle a renovation, hire the professionals necessary to complete the work, and deal with a change in the certificate of occupancy? It’s the million-dollar question — or at least a $350,000 one, the average estimate for a basic gut remodeling of a two-story townhouse in Brooklyn.

And then there is the time involved. “Typical timing is about six months to a year from beginning to end,” Lata added.

While some owners buckle down, taking over one floor of a home while making the necessary changes on another floor, others will want to live elsewhere to avoid the disruption, noise, dust and fumes.

Finally, applying for a change in the certificate of occupancy can open a Pandora’s box of unexpected surprises. A new certificate of occupancy does not always require changing the building structure. However, it will require a sprinkler system.

As of 2010, sprinkler systems are now required in all townhouses or “attached dwellings,” regardless of the number of families occupying them. Luckily, for potential owners of smaller buildings, there is a loophole.

The exception? If the townhouse is less than three stories tall and you are only changing it from a two- to a one-family dwelling, you can amend — rather than change — the certificate of occupancy. “A new one triggers sprinkler requirements and an amended one does not,” explained Cunningham.

Some real estate agents may advise that changing a multi-unit building to a single-family one can decrease its resale value. Despite more buyers seeking single-family homes, there is still high demand for multi-family ones in the market. But that could change.

“I would ask, are you planning to hold on to the property long-term?” said Lata. “If this is the case, I would tell the client to change the certificate of occupancy. If the property is an investment property, which will be sold in a few years, I’d advise them to hold off.”

Also, any of the devaluation should be weighed against other financial obligations. Once a conversion is completed, property taxes should go down, mortgages can often be negotiated for lower rates, and even energy bills will become simplified with only one versus two or more meters existing at the residence.

What Is a Certificate of Occupancy?

A certificate of occupancy — often referred to as a C of O or CO — is a government-issued document establishing the legal layout, allowable use, and occupancy limits of a building. All new structures must have a C of O.

As for existing ones? Well, it can vary. New York State began requiring C of Os for new buildings in the 1930s. If a building was constructed prior to 1938, its use hasn’t changed, and no work involving permits has been completed within it, it is not required to have a C of O. In fact, it could be listed with a whole different set of attributes with the Department of Finance than it has with the Department of Buildings or Housing Preservation and Development.

As a buyer, it’s worth going to the NYC DOB website to research the C of O for any residence you are seriously considering purchasing. If it is lacking a C of O, has a temporary one, or has a C of O that doesn’t seem to match its layout or use, it is wise to ask your real estate attorney if there are reasons to be concerned.

What Is Involved in Applying for a Change of C of O?

An architect or engineer will be needed to alter a certificate of occupancy. It’s likely they will also need to apply for an alteration permit and a contractor will be needed as well to carry out the renovations. An expeditor is useful to speed the paperwork through the DOB.

In the past, it was sometimes possible to change the certificate of occupancy for a house without actually doing any renovation, but this is no longer the case.

“I consider a C of O to be akin to a birth certificate for a building,” said Cunningham. “In the past, you could file a ‘no work’ application to change the C of O. Our experience of late is that this is no longer permitted and that some renovation work must be included as part of the application.”

Removing kitchens and knocking down walls will require an alteration permit.

Here are the steps involved in changing a certificate of occupancy:

1. The architect or engineer will draw up the plans for the changes and will have them reviewed and approved by the DOB.
2. The expeditor, often working with the architect, engineer or contractor, will apply for the permits.
3. The contractor will make sure the work is completed according to the specifications.
4. The process to change the C of O will begin.
5. The home will undergo construction, plumbing and electrical inspections. If there is an elevator, that will also need to undergo inspection. (The inspections may result in minor modifications to the plans.)
6. The DOB will issue a final C of O when the completed work matches the submitted plans for the alterations. The document confirms, according to the DOB, that the work complies with all applicable laws, all paperwork has been completed, all fees owed to the DOB have been paid, all relevant violations have been resolved, and all necessary approvals have been received from other city agencies.

If you’ve made it through the process, congratulations! Now you can move in and enjoy your new home.

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