Here are some of the top reasons home sales fall through.
Condominium conversion is an important term to know. Bankrate explains it.
What is condominium conversion?
Condominium conversion is the process of converting rental apartments, which are leased by the occupants, into condominium units, which are owned by the occupants. Condominium conversions can take place in any building where tenants live in separate units, including apartment buildings and cooperative buildings that have tenant shareholders.
Condominium conversion turns each individual unit into an individually owned condominium. Additionally, the condominium conversion turns condo owners into shared owners for common areas, like onsite gyms and pools.
There are legal protections in place to protect tenants from unwanted condominium conversions. If a building owner desires to convert the building, he must provide adequate notice to tenants of the change and give them the opportunity to buy or move.
Building owners often use conversions as opportunities to make money and drive up rent costs for current tenants, encouraging them to move. With the protections, tenants are spared this hardship and given opportunity to purchase their unit before the unit goes up for sale to outside investors.
Condominium conversion example
If you rent an apartment and the owner of your building decides to convert the apartment units into individually owned condos, you will have the opportunity to purchase your unit or move before it’s sold.
Thanks to protections in place in your city or municipality, your building owner cannot decide to convert to condos and raise your rent to force you out. By law, he must give you plenty of advance notice before the conversion takes place and also provide you with the opportunity to buy your unit.
If you choose to buy your apartment-turned-condo, you’ll receive a title in your own name and will begin making mortgage payments, rather than rental payments. Additionally, you’ll share part ownership in community amenities and will pay for these through a separate condo community fee.
Learn more about what you need to get a mortgage on a condominium.
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