Part two: advantages and disadvantages.Last week I discussed the definition of condominiumizing: two or more separate house structures on one piece of land, owned and maintained separately. There is no lot size requirement or legal amount of land used by each structure. The use of the land allocated to each structure is determined during the process. The new condo law does not require two structures to be built on the property; it is possible to condominiumize the lot with just one house on it. It allows the landowner to define an area with physical boundaries for the condominium. Although this is legal, it is risky.
Some of the advantages to condominiumizing are that each structure can be financed and owned separately. The land is shared by both owners as “tenancy in common” and it remains undivided. However, a survey is completed to create portions of the land that will allocate use to each owner. This is considered “limited common element.” In addition, the seller who converted to a condo is able to sell off one structure and possibly use the money for other investments such as children’s college or paying off their current mortgage. Usually, residential condominiums are priced less than non-residential condos; therefore, it makes housing more affordable for many buyers.
Some of the disadvantages are that there are two owners on one piece of land. What one owner does or does not do affects the other owner. For example, if one owner receives a violation notice for illegal vacation rentals, the other is subject to fines and penalties as well. Another scenario might occur if the owner in the smaller structure adds square footage to the home without permits and then your home burns down. The county will look at your replacement home as the smaller structure in the future.
Chris Bakeman, broker, has been a realtor since 1997, selling in both buyers’ and sellers’ markets. Now with her own company, she offers an affordable way to sell your home starting as low as $4,000 full service on the MLS. Contact Chris Bakeman Realty LLC at 283-6126 or www.chrisbakeman.com.