A condo conversion involves converting a property into individual units that people can purchase title to, known as condominiums. This process requires approval from local government officials and the establishment of a condo association. Maintenance fees are required, and there may be restrictions on renting or subletting. It has been criticized for driving up rents in some areas.
A condo conversion is a business in which a piece of real estate is converted from a wholly owned property into a property where people can purchase title to one or more individual units. These units are known as condominiums or condominiums. Condo conversions happen all over the world, not without controversy, and in some regions the government has become quite aggressive in regulating them to prevent abuse.
Classically, a condo conversion involves an existing residential apartment building, row of townhouses, or converted industrial structure. For the conversion to take place, local government officials must approve it. Once approved, you can establish a condo association and sell individual units within the condo complex. In some cases, units are sold before they can be occupied, with funds from deposits and pre-sales being used to pay for any construction that needs to be done.
In a condo conversion, people are able to purchase title to the units they occupy. They usually join the condo association and are required to pay maintenance fees which are used to cover costs involving the building as a whole. For example, maintenance fees cover things like cleaning and maintaining halls and lobbies, looking after the building facade, and so on.
Someone wishing to purchase a condo must generally be approved by the condo association, and there may be special restrictions in place for occupants, such as prohibiting condos from renting or subletting without condo association approval. A condominium complex may also be structured with the intent of using the condominiums as time shares.
A condo conversion is not the same thing as a building cooperative, although the two may seem similar because they share the concepts of having a real estate association and requiring people to pay maintenance fees. In a building cooperative, the title is sole ownership; people buy shares of property, not the titles to the apartments or other areas they occupy.
Condo conversion has been cited as a way to make real estate more affordable by allowing people to buy condos in places where single-family homes are too expensive for many people. However, it has also been criticized for putting pressure on the property and rental markets. Some landlords attempt to convert buildings in rent-controlled areas into condominiums to make more money, for example, which drives up rents.
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