Deconversion of Condominium Units: Addressing Multifamily Rental Needs in Tight Real Estate Market

Risks to Developers and Owners, Legal Process, Liability of Condominium Boards and Disclosures

A live 90-minute premium CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Thursday, October 20, 2022

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

or call 1-800-926-7926

The CLE webinar will address the deconversion of condominium units into multifamily rental units and the risks and benefits of this process. The panel will discuss the issues for developers and condominium ownership, the legal process, and the liability of condo board members who conduct a deconversion.

Description

In the current real estate market, condominium deconversion offers developers and unit owners lucrative opportunities. Restrictions or prohibitions on leasing condominium units made it difficult for a non-occupying owner to generate income to pay the unit's ownership costs until the unit could be sold.

The low supply of new construction and large numbers of potential home buyers shut out of the housing market because of damaged credit or large student loans have created increased need. However, converting condominium buildings into rental properties can be more time-consuming and labor-intensive than acquiring an existing apartment building.

While investors can profit from a conversion, especially in developments where most units have failed to sell, owners who wish to stay can be at a loss. The legal process for deconversion is typically a combination of state law and the condominium's CC&Rs.

In Chicago, several large downtown properties that failed to sell have undergone deconversion into apartments, aided in part by Illinois state law that allows a condominium board to sell all units once 75 percent of owners agree to a sale.

A condo board contemplating such a sale should consider the issues when hold-out owners bring suit to stop the process. Boards act as fiduciaries for all owners and must avoid self-dealing, lack of full disclosure or candor or conspiratorial conduct with the deconverter, and act with good faith and loyalty to all condo owners.

Listen as our authoritative panel discusses deconversion of condominiums, the pros and cons for developers and owners, and how a board attempting this process must act to avoid liability.

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Outline

  1. Deconversion of condominiums to apartments
    1. Developer issues
    2. Owner issues
      1. Hold-outs
    3. Legal process
      1. Chicago examples
    4. Condominium board liabilities
    5. Other best practices and considerations

Benefits

The panel will address these and other key topics:

  • When should a condominium association consider a deconversion offer?
  • What can hold-out owners do to prevent a deconversion?
  • What liabilities does a condo board face when attempting a deconversion to apartments?

Faculty

Elmore, Kelly
Kelly C. Elmore

Principal; Chair of the Deconversion Department
Kovitz Shifrin Nesbit

Ms. Elmore advises condominium, homeowner, and townhome community associations on all aspects of corporate law...  |  Read More

Additional faculty
to be announced.
Attend on October 20

Cannot Attend October 20?

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

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