Sometimes it can be a delicate balancing act to keep up with ever-changing trends. Real estate is no different. One example is the practice of purchasing apartment buildings and converting them into condos, which was popular in the past decade or so. More recently in Illinois, however, the movement seems to be toward deconversion, which is returning previously converted condos to their rental status.
There are numerous reasons why the popularity of condos is waning, including the issue of property taxes condo owners cannot afford, the slow appreciation of condominium buildings and the insolvency of many condo associations. Additionally, many of the current condominiums in Illinois were converted from vintage apartment buildings, so they require expensive maintenance and sometimes cost-prohibitive repairs.
Converting condos back to apartment rentals may be a more complex legal process than conversion to condos. Because each unit has an individual owner, the law requires that 75% of the residents approve the sale of the building, but in some cases, it is 85%. However, this is not always a roadblock, especially if the owners are dealing with repairs they cannot afford.
Anyone in Illinois looking to purchase real estate to convert from condos back to apartments may find buildings where many units are already occupied by renters, but the tenants are renting from the condo unit owners who wanted out but could not sell. There are many legal issues to consider when converting from apartments to condos or deconverting in the other direction. Those hoping to take on such an ambitious project may benefit from the assistance of an attorney who has experience in this complicated area of real estate law.
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