More and more multi-family homes have been converted into condos over the years and if you are thinking of doing the same, below is a helpful guide to making it happen. If you work with people that are knowledgeable of the process, this list although daunting, won’t be nearly as bad as it seems!
Steps to converting:
First step – Consult with a Realtor who specializes in selling condos and can help walk you through the process. In that initial meeting, ask them to show you just how much more you can net if you were to convert to condos. They should show you both comparative multi-family properties and how much they are selling for as well as comparable condos and how much they are selling for. This will help you do the math and see if it’s worth it for you.
Second step – Speak to a Real Estate attorney who frequently works with condo conversions. Ask them to look up your property on the registry in order to be sure it can easily be converted to condos. It’s usually not that difficult but depending on how your land is recorded, it can be a more challenging process.
Once you have completed those two steps and feel comfortable moving forward in the process, it’s time to begin with these action items:
1. Have as-built drawings completed by an Engineer for both the interior and exterior of the property. Because the attorney cannot do their work until these plans are in hand, this process should start as soon as you decide to sell.
2. Work with an experienced Real Estate attorney for the development of legal documents and processes. These include the master deed, establishing a condo association, determining what the condo fee will be, developing rules and regulations for the association (including pet restrictions), and defining common area space-usage permissions.
3. Have an attorney record the as-built drawings once finalized and stamped by an engineer.
4. Have a master insurance policy put in place.
5. Work with the city or town to separate any public utilities, including water meters, if it’s not already separately metered per unit. This is highly recommended, but not required.
6. Separate electric/gas utilities if you have not already done so.
Below is a typical schedule of fees you can expect. Please note these are based for straightforward condo conversions. The more complex the property or circumstances, there will be higher rates for fees:
Fee for an Engineer – as-builts: $4,000.00 – &7,000.00 **TYPICALLY**
Attorney fees: $2,500.00 – $4,000.00 (excludes recording fees)
Recording fees for condo docs: $680 ($230.00 for Trust, $130 for Master Deed, $80 per page for as-builts) **fees based on Massachusetts Recording fees as of 2019.
It is certainly no lie that converting a multi-family home to a condo is a big process to take on. However, with a Real Estate attorney who specializes in condo conversions and a Realtor experienced in selling condos, the process will be simplified and your life will be made easier in the long run.
To talk to one of our agents who is an expert in the condo conversion process, call us today at 855-510-SOLD.