Across 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 Some units are sorely outdated.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.