It’s that time of the year. For the rest of the year, I’ll be reposting the 10 most read articles here on IAC.
Thanks for following, reading, and sharing. Special thanks to readers who have provided inspiration for blog topics, and for those who have been willing to share their personal HOA stories.
Public awareness is the first step on the road to justice for housing consumers.
Best wishes for a peaceful holiday season and happier, healthier neighborhoods in 2018.
JUNE 1, 2017 BY DEBORAHGOONAN
Condo owners forced to sell in a deconversion, like it or not
IN CHICAGO, ILLINOIS, 75% OF UNIT OWNERS CAN FORCE A BULK SALE AND TERMINATION OF THE CONDO ASSOCIATION
By Deborah Goonan, Independent American Communities
Although the real estate market has improved in some parts of the country, condo sales in some markets have lagged behind. In Chicago, news outlets are reporting the hottest new trend, condo deconversions – the bulk sale of condo units by their individual owners to a real estate investor who intends to either convert the units to rental apartments or demolish the building and develop the new site from the ground up.
Readers of this blog know that I have covered the issue of condo deconversions that were forced upon condo owners as hostile takeovers. The trend has been prevalent in Florida and other parts of the U.S. and Canada for several years.
Investors have taken advantage of distressed condominium projects, acquired units at low prices in foreclosures or short sales, and then, by vitrue of holding a majority or supermajority of voting interests, have taken over their condo boards. The next step was to initiate a condominium termination agreement, and, because the investor held a controlling voting interest in the association, minority owners have usually been unable to block a termination attempt. If the investor’s first attempt was not successful, the second attempt often was.
Unfortunately, many unit owners were under water on their mortgages, and were only offered a fraction of what they had paid for their condos during the boom years when prices were high. They were nonetheless forced to sell their units, despite considerable financial loss.
Now eager real estate investors and developers are reportedly offering premium prices above current market rates to acquire certain buildings in highly desirable locations.
But, while some condo owners will find an investor’s offer attractive, others may still owe more money on their mortgage than what the investor is willing to offer – even at a premium.
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