Q What is a Conversion?

A Condo conversion projects are essentially apartment buildings that are purchased by a developer and then the developer resells the individual units as condominiums after a few minor cosmetic updates.


Conversions allow developers to avoid the skyrocketing land prices and tight building requirements associated with building an entirely new building by purchasing an existing apartment building with the intent to turn it into condominiums. By purchasing an existing building it also helps them to avoid large insurance policies or financing problems caused by a rising number of lawsuits filed with developers over condo defects. Because builders on conversion projects are generally only liable for the specific work they do on a conversion project (most likely only cosmetic upgrades, not on the building itself) it allows them to get into a project relatively cheap, compared to new construction and it’s a much lower risk project for the builder.

Conversions don’t require as much effort as new construction because obviously the building is already built. Most builders usually don’t have to file for development or land-use permits unless they’re doing major construction work, like tearing down walls or changing the footprint of the building. Because of the nature of conversions, builders do as minimal work as possible to create the illusion of a new building and what will sell the units. Often the builder does not do any improvements to the actual building or systems in the building. Some builders do take on additional work in a building like updating plumbing or electrical to make the project more attractive to prospective buyers. Once they have the condominium declaration filed with the county and the work is underway, one of the rules of conversion projects is that they do have to offer the converted units they are going to sell to the renters in the building before they put them on the market to the public. Although offered to renters first, most renters choose not to purchase in the building they are renting in but around 10 percent of renters do buy units.

While conversions are a great option for builders and developers, how are they for consumers?


When purchasing in a conversion project, the buyer is presented with a unit that has a new cosmetic face lift on the surface but the actual building that is often 10 - 20+ years old. The buyer is not provided any information on the history of the building issues such as maintenance or repairs (which in a regular condominium would be provided in a Resale Certificate). So a buyer in a conversion project is limited in what they can find out about a building. The Legislature passed a series of measures to help the consumer when purchasing a condominium or conversion project. These measures aim to improve building envelope design and installation, along with an innovative set of procedures aimed at encouraging early dispute resolution and discouraging protracted litigation. The new provisions apply to all building permits for residential structures with more than two attached dwelling units for which a building permit will be issued on or after August 1, 2005. The inspection and disclosure provisions of the Act also apply to any condominium conversion for which an offering statement is delivered on or after August 1, 2005. What this means for a buyer is that they have the right to review the inspection that was done on the building envelope (roof, siding, windows, flashing, etc.) to see what kinds of issues came up and whether or not the builder doing the conversion chose to fix any of the problems. While this isn’t a complete assessment of the building, it does give the buyer some insight into the overall condition of the building and not jut the unit they are buying.

Conversion projects are a higher risk to a buyer because of the lack of history in the building and the potential for problems to arise after purchase. However, most conversion projects are offered at a slightly lower price then competing condominiums and can be in very attractive locations with good floor-plans so they can be a good option for many buyers. It is always recommended that you have a knowledgeable agent representing you that is NOT working with the seller/builder (site agent) because there are so many different issues that can arise with the purchase of a conversion.