Whether you're just hearing rumblings or have received a notice that your apartment community is going condo, it's time to do some research and hard thinking. You can decide to move or to buy, but you don't want to decide on the fly. Give yourself the time and tools to make an informed decision. The first step is to know where you stand legally and personally.
Know Your Rights: First, check your lease. Some apartment leases contain a provision which allows the landlord to terminate mid-lease if the building converts to condominiums. Find out whether you're protected until the end of your lease term or the property owner has built in a termination clause. Your lease isn't the only place to check, though. Some states (and even cities) have statutes or ordinances that protect renters when a rental property goes condo. Those laws may provide you with greater protection and more options than your lease suggests. Check your state and local laws online or consult an attorney or local tenants' rights organization.
Think About What You Want: Usually, when a building goes condo, current residents have the first opportunity to buy their apartment. Before you get into a discussion of terms and options, take a step back and ask yourself; Would I want to own this place? The final answer to that question, of course, will require homework and consideration, but start with a gut-check. Do you want to explore ownership of this unit or are you considering it only because you're already living there?
Do Your Homework: If you're interested in buying, it's time to get to work. Many renters whose apartment community is converted don't get the best deal possible, because it's not always treated like a typical real estate transaction. Although there are some differences, at its core it's just like any home purchase. The price is really just an offer and how flexible it is varies. That's one reason it's so important to come to the table prepared. Find out what similar condos in your area have sold for in the past few years, whether values are rising or falling and what the vacancy rate looks like.
Know Your Options: Doing your homework doesn't just mean researching the market and the value of your property. It also means getting a good handle on your own financial situation. Sometimes, when a building is converted to condominiums, special financing is offered to residents. While the special financing may allow people who otherwise wouldn't qualify for a mortgage to buy their apartment, it's important to look carefully at the details and decide if that's a good move for you. Consider not only whether you'll be able to keep up with the payments, but also the likely condo association dues and other expenses. As a homeowner, you,ll be responsible for your own repairs and, in a down economy, there is a risk of the association being underfunded and assessing general repair costs to residents. If special financing isn't offered, strict regulations relating to condominium developments may make it difficult to obtain a mortgage without a large down payment.
If your apartment community is converted to condominiums, it can provide an excellent opportunity or can be the signal that it's time to move on. The key to making the best decision for you, your finances and your future is learning as much as you can in advance. Know your rights, the local market, your goals and financial situation before you make a decision.
