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“Does anyone have any estimates of how much it costs to convert a pre-existing apartment building into condos?”

by Prince Of Petworth — March 31, 2017 at 1:45 pm 19 Comments

house condo
Photo by PoPville flickr user Tim Brown

“Dear PoPville,

My friends and I live in an amazing three story rowhouse divided into apartments in our favorite part of DC. The excellent landlady unfortunately has to sell the house due to some health issues and we’re thinking to pool our money (and TOPA rights) to buy the house.

It makes a lot more sense to buy the home as a group then divide it into condos, so we’re not all stuck to living together for all time. Does anyone out there have any estimates of how much it costs to convert a pre-existing apartment building into condos?

Open to any other ideas on how to do this as well.”

  • Anon

    You need a good lawyer, quickly. My building exercised its TOPA rights a few years ago (we did not end up buying it but we did help select the ultimate buyer). We used Eric Rome at Eisen & Rome and I can’t say enough good things about him. There are a lot of complicated steps in exercising your TOPA rights and some pressing timing deadlines you don’t want to miss.

    • Northzax

      Ditto. Call Eric. Now. (Disclosure: I am the head of a tenant association recently represented by Eric)

    • Admo_Anon

      +1 on Eric Rome. He recently was a lawyer for my tenant association and was awesome. Incredibly thorough, and worked very hard for us throughout the entire process.

      • Call Eric Rome. He helped us take a 300 unit rental co-op under TOPA.

    • anon

      While it seems like this Eric guy is a great lawyer, I didn’t get the impression that the TOPA part of this was all that important. Maybe I’m wrong, but it seems likely that this sale could easily occur amicably without having to exercise those rights.

      • Anon

        Possibly, but you still need a lawyer to draw up the condo docs, etc.

        • anon

          Right, but they don’t have to be this rockstar that spontaneously generated so many recommendations, including from an opposing counsel.
          .
          I’m sure a non-rockstar lawyer could handle it for a lower billable rate.

          • anon

            Although I suppose he might pass it on to an associate if it turns out to be that simple and step in if for some reason it doesn’t, so maybe calling him is still the right choice. I dunno.

      • Anonymous

        It’s amicable until the “excellent landlady” gets a way better offer from some outside purchaser that the current tenants can’t match.

  • Mr. Magoo

    I’ve been opposing counsel to Eric Rome in litigation, and I second the recommendation. He is a fine lawyer.

    • Anon

      As a lawyer, I gotta say I love the opposing counsel recommendation.

  • Formerly Keefer

    This is an interesting question, I am a small developer and mainly convert single family stuff into condos and occasionally convert existing rental to condo. Assuming the building has a three unit CofO it seems like you would just need go through the process of having the condos survey and the drafting of the condo documents. This usually cost me about 19k for slightly larger projects. The next big question is the condo conversion tax, when I convert rental to condo I am faced with holding the property vacant for a year or paying a tax on the outsale of the units of 5% which could be a ton of money, there are loopholes in the vacancy requirement that mean you avoid paying the vacant property tax during the time it is vacant so I always go that route because I am doing a lot of construction anyway. I don’t know how or if that conversion tax would or could apply to a tenant excersizing there TOPA rights to by a building as cooperative and then convert to condo. I would look into the rules around that, one would hope they don’t apply the tax, But because the cooperative is buying the building and converting it there will be a sale from the cooperative to the individual members when the conversion is complete and they could apply it there, so definitely look into that because at that point the cooperative could be taxed at 5% on all those sales which would be a lot of money. Ask a lawyer about the applicability of the conversion tax in your situation. It takes a while and a fair bit of legal gymnastics to get through a condo conversion so don’t expect it to be immediate it is a process, anticipate owning the property as a cooperative for 6 months before you are legally split and can have the cooperative effectively sell the units to its members

    • anonymous

      are you looking for any investors?

  • Shaw Rez

    In addition to needing a lawyer re: TOPA, you need someone to check into zoning requirements pronto. Many row homes cannot be divided into the number of condo units you may want based on lot size and minimum sq. ft. requirements. I’ve had several friends get “burned” on this when trying to flip properties (their fault, really, for not looking into the issue before purchase).

  • Rich

    Elizabeth Menist is up on DC Condo law. We used for my building. She works with associations.

  • ProTenantBuilder

    if you would like to partner with a developer please let me know, can take on the construction with some or all of your staying and cost sharing/profit sharing if any units sell.

  • Hill Denizen

    I’m confused. If it’s already divided into apartments, why do you need to make any changes? Are you referring to the legal process of purchasing the building as a group and then having ownership of your individual units?

  • John B.

    Depending on your financial situation, how long you plan to stay there, etc. you (or one of your friends) could buy the entire building and rent it out to the others. I’ll bet the rent would more than cover your mortgage payments, or at least offset it so you’re paying less than you are in rent right now.

  • ems

    also, if this is in mt. pleasant, gotta factor in historic preservation limitations.

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