Creating a condo
I just recently saw an ad for a “condo” being sold in my neighborhood. From the address, I know that it’s a building that at some point was a 6 family. It’s now being sold off apartment at a time. The ad states, “put in a kitchen and it’s a great place to live”. Now…
I just recently saw an ad for a “condo” being sold in my neighborhood. From the address, I know that it’s a building that at some point was a 6 family. It’s now being sold off apartment at a time. The ad states, “put in a kitchen and it’s a great place to live”. Now personally, it sounds like someone bought the building, couldn’t finish the renovation themselves and is now trying to sell the apartments piece meal.
I’m just curious as to what you have to do to change a multi-family building to a condo? I’m surprised I don’t see this more often.
An expediter won’t do you any good without an architect.
The consultants you’ll need are an attorney ($10k-$20k) to handle the filing with the Attorney General (AG), an architect ($5k – $15k) to prepare floor plans for submission to the Department of Buildings (DOB), an architect or engineer ($5k – $15k) to prepare a description of property, an expediter ($5k – $10k) to push the paper for you, an accountant ($?) to prepare building budget info, an engineer ($2k) to provide any utility usage information for inclusion in the Prospectus. When the AG’s office is busy the process can take at least 6 months. Filing plans with the DOB and obtaining approvals can take anywhere from 3 to 6 months. Costs may also include any upgrades or renovations required by the DOB.
Hope this helps.
Sounds like this will have to be an all-cash buyer — I don’t think banks will finance a place without a kitchen.
six families displaced.
*rob*
of course it’s feasible if you are a sophisticated owner with the financial wherewithall to hire the right team of lawyers, accountants and expiditers. Remember a condo can have no underlying mortgage so the building must be debt free for the plan to be approved by the AG. The DOB will give you grief about ADA access and sprinklers, you have to have the right expediter get you through each hoop. I would say a condo plan with no sro or tenant issues can wind its way through the bureaucracy in from six to twelve months.
Is this feasible to do by an owner (ie not a developer)? How much would it cost and how long would it take to covert a 2 or 3-unit? Would DOB go through the building with a fine-toothed comb?
It’s a process. First you need to set up an offfering plan that needs to be submitted and approved by the Attorney Generals office. This sets up the legal parameters of the condominium association that will be in charge of the common elements. Potential purchasors will need to be given a prospectus of the corporation along with a balance sheet indicating the assets and liabilities of the association. Part of the conversion provess involves giving each apartment its own individual block and lot numbers for paying taxes. It is a standard process but it is involved and will require an attorney and CPA.
You actually do see it all the time. A developer purchases a building; submit an offering plan to the Attorney General’s office (and a few extra steps); and voila, you have a new condo project on your block.
You are probably right in assuming that the developer not being able to finish the renovation; hence the reason why a potential owner have to finish the kitchen themselves. But even that is not uncommon. During the real estate boom, developers used to give credits to potential owners to put in their own kitchens.