Deconversion of a Condominium – Is a Bulk Sale the Right Choice for Your Property?

Illinois real estate lawyersAcross the country, condominiums are suffering. Some units are sorely outdated. Others are unable to maintain an occupancy rate that can sustain the association’s annual investment. Whatever the reason, deconversion may be the answer. However, it may not be the appropriate option for every condominium association. Learn more about the deconversion of condominium units, including how to tell if it may be the right choice for your property.

The Rise of Deconversion

In the early 2000s, condominium units were all the rage. They were so popular, in fact, that many apartment complexes were converted into condos. Sadly, the boom died out, which is why many condominium associations are now struggling to fill their units. This lack of occupancy, paired with the cost of maintenance and upkeep, has been the catalyst for the rise in deconversions – a process in which condominium units are converted to apartments.

Potential Benefits of a Deconversion

The bulk sale of a condominium unit may be appealing to owners and associations because it offers a way out. Deconversion may also fetch a better price than other sale options, such as fire sales. It may also offer everyone a chance to bow out of their obligation in less time than it would take to sell the units individually. Still, deconversions do have their potential drawbacks.

Potential Risks of a Deconversion

Deconversions may give owners and associations a fast out, and they may offer a better price, but there are also some serious risks that owners should be aware of before agreeing to sell. The first is that a bulk sale may result in an unfair price for some. The reason behind this is that condo owners are supposed to split the proceeds, based on their percentage of ownership; if one unit looks the same as it when it was built, but another has significant and costly upgrades, the latter owner may lose out. Still, there are provisions that can protect owners, such as the right to appeal the value given to their unit.

Contact Our Seasoned DuPage County Real Estate Attorneys

If your condominium association is considering a bulk-sale of the property, or if you are an association interested in deconversion, contact Stock, Carlson, Oldfield & McGrath, LLC for assistance. Dedicated and experienced, we can examine your situation and help you determine the most appropriate path for you. Get started with a personalized consultation. Call our DuPage County real estate attorneys at 630-665-2500 today.

Source:

http://www.chicagotribune.com/classified/realestate/ct-re-0604-condo-living-20170530-column.html

Lawmakers Revise Illinois Condominium Laws

Illinois condominium laws, DuPage County Real Estate AttorneyThe new year brought with it the enactment of many new laws in the state of Illinois. Included in that batch of statutes were changes to the Illinois Condominium Property Act. Some of these changes have already become effective; however, some will not go into effect until June or July of this year.

Owners of condominiums own the unit they have purchased and, depending on the type of unit, may own a small portion of land around the unit. Ownership of the common areas and amenities of the development is shared by all the owners and is governed by a condominium association. All owners are members of the association, and they typically elect a board to oversee the policies and expenses of the development. Expenses are paid using funds collected for association fees all owners are required to pay.

When a buyer purchases a condo, they are required to sign a contract agreeing to abide by the association’s rules and regulations. The Illinois Condominium Property Act establishes what rules and regulations the association can require.

One of the issues addressed in the changes to the Act was how associations communicate with owners. Since more and more people rely on electronic messaging, the Act added new definitions for “acceptable technological means” and “electronic transmission” regarding the usage of electronic notices sent to owners and electronic voting. The Act also requires that an owner consents to electronic communications, otherwise, the association is still required to provide a “hard copy” for the owner. There is also a section that outlines the rules regarding electronic voting.

Additionally, an amendment was made to insurance requirements and now removes the right of an association to purchase insurance for a condo owner who does not purchase insurance on his or her own.

Another change to the Act is the decrease in the number of days a board is required to provide owners with an annual budget proposal. Instead of 30 days, the number of days is now 25.

In the event an association board is required to address an emergency situation outside of a regular meeting, the board must now notify owners of the emergency and what steps they took to address the situation. This notice must be delivered within seven business days of the event.

There were also changes made to the Act addressing what the procedure should be in the event that there needs to be an amendment made to an associations bylaws and declarations.

The last amendment made to the Act declares that every condominium association in Illinois is also governed by the Condominium Ombudsperson Act. This act, which will create the Office of the Condominium and Common Interest Community Ombudsperson, goes into effect in July. All associations are required to register with the office, which will offer resources and training to associations, boards, and owners.

Purchasing a condominium and understanding all the bylaws and declarations of the association can be complicated and confusing. Contact an experienced DuPage County real estate attorney today to assist you.

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2200&ChapAct

http://homeguides.sfgate.com/condominium-association-1442.html

http://www.chicagotribune.com/classified/realestate/ct-mre-0103-condo-adviser-20151228-story.html

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=3587&ChapterID=62