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Less than a dozen pairs of the shoes at the museum have been worn – but those include a pair that Michael Jordan laced on as a rookie for the Chicago Bulls. Along the way, he felt guided by destiny – including his name, which he said his parents gave him without thinking of Michael Jordan the player. In late December, someone stole a trailer in Kansas City containing 4,700 pairs of Nike Air Jordans, and some of those have been sold in the area, Corwin said.

The tumbled leather wasn’t just a nod to Jordan’s love of fashion and those Italian leather shoes he was now sporting. They were the shoes Michael Jordan wore while famously winning the 1988 NBA Slam Dunk Contest—flying from the free throw line to the rim. The Jordan Brand subdivision of Nike made $2.25 billion in 2013 alone and accounts for nearly 60 percent of the American basketball shoe market. He’s still taking inspiration from unconventional places (for the Jordan XI, he consistently cites a lawn mower). And in 2001, the Air Jordan III became the first Jordan to be rereleased (or retroed,” in sneaker parlance) and sell out in full.

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That Old Stand-By “The Condominum Conversion”—Some “how to” Steps for a Real Estate strategy that Still Remains Viable

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Even in today’s distressed real estate environment, there are times where a condominium conversion makes sense. I have been working on condominium conversions for more than twenty year. There follows a short summary of the process, with the thought that condominium conversion may make the best sense for your multi-unit Sellers. My firm, Topkins & Bevans, continues to assist  developers and individuals with condominium conversions. We have developed a team of engineers, financing people, accountants and marketing professionals which can take most of the anguish out of the process.  

 INITIAL STEPS

A  Massachusetts condominium can only be created by adherence to the provisions of Massachusetts Laws, Chapter 183A. The first professional to be involved is the engineer, or in some cases, an architect.  This professional needs to provide two separate documents.  The first is a site plan, which shows the footprint of the building on the land. If there are parking spaces to be conveyed or parking easement, they are indicated on the site plan.  Any easements or rights of way are also delineated.  The professional also needs to draft condominium floor plans, which configure the units which are being created.  If there are yards, decks or roof rights, these need to be shown on the condominium floor plans.  Common areas , including those for exclusive unit to certain units, are marked off.

Once the plans are developed, our firm gets into the action.  We draft the following two necessary documents which will accompany the plans described above: 

 •1.      Master Deed.  This document makes the property a condominium.  It references the Site Plan and the Condominium Floors plans.  It indicates the exact boundaries of each Unit.  It provides descriptions of any exclusive easements or rights.  Often, there is language in the Master Deed which makes FNMA and FHLMC able to purchase loans secured by the condominium units.  The Master Deed also sets forth the percentage of ownership and actual configuration of each Unit.  In effect, the Master Deed gives the purchaser necessary specific information as to what he or she is actually purchasing.

•2.      Condominium Trust.  This document sets forth the rules and regulations of condominium operations.  Condominiums are run by a group of Trustees, elected by the unit owners.  The Trustees meet periodically and make decisions concerning operations.  They contract for repairs, maintenance, insurance and snow removal.  They collect monthly fees, which are set, annually, and they make sure each unit owner is current in payment of necessary fees.  All of the details of these items are described in the Trust document.  Additionally, the Trust will control whether pets are permitted and also describe procedures which must be adhered to if you are renting your unit..  Most new Trust documents also set forth an arbitration procedure to be utilized if a unit owner takes issue with the actions of the Trustees.

 FINAL STEPS

After the documents are drafted and recorded, it is time to sell the condominium units you created.  There are tax ramifications which need to be addressed.  An accountant thoroughly familiar with the proper steps is essential.  Similarly, real estate professionals can market your units effectively and can actually be showing the units while the documentation is being completed.  You as the organizer need to obtain common area insurance and prepare an initial budget which will be used to determine the condominium monthly fee.  An experienced condominium attorney can help you accomplish all these steps at a pace which works for you.

There is work involved in a condominium conversion.  There are also cash outlays.  On the other hand, it is estimated that a two or three family dwelling converted into condominiums is still  worth no less than one hundred fifty percent of its value as an apartment dwelling.  With that kind of increase in value, especially in a difficult rental market, it behooves any property owner to consider condominium conversion.

Together We REALLY Can–The Combined Enterprise of the Buyer’s Agent and the Buyer’s Attorney in Condominium Purchases

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While there has been a marked increase in both new and conversion condominiums in Massachusetts, where I practice real estate law,and most other jurisdictions in ActiveRain nation, it is my sense that many people get involved in a condominium purchase without any real understanding of what they are getting into and the inherent risks involved in condominium ownership. I have written other posts about the inconsistencies of condominium governance and the difficulties condominiums experience in encouraging able and stable people to serve as Trustees and Officers. That will not be the subject of this post.

This post is designed to be more positive. I want to lay out some of the guidelines I have followed in representing Buyers of Condominium Units, and how I have been able to work together with committed Buyer Agents to do the best possible work in terms of due diligence and disclosure. It is this “teamwork” element that I want to stress. I am so grateful for the advent of Buyer’s Agency, because I now have a real ally on the Buyer’s side. There are no conflicts here; the Buyer’s Agent and I are on the same page.

•1.       Pre-Offer Stage. This is where the Buyer’s Agent can really shine. I suggest that the Buyer’s Agent accompany the Buyer to the Condominium and then knock on some doors. Speak to the current residents. Ask them how things are going with the Condominium Trustees. Do they keep you informed of meetings? Are minutes ever distributed? If you have day-to-day problems, are they addressed? More than anything, this due diligence will give your Buyer a sense of what he or she is getting into. Remember, if the people interviewed lie, or even embellish, they are going to have some really embarrassing moments making explanations for their imprecations in the elevator or the laundry room.

•2.       Offer Stage. This is where the Buyer’s Agent and I can combine our efforts. The Buyer’s agent must be meticulous in terms of including everything that is included in the purchase in terms of appliances and other personal property. The Agent must make sure that the Buyer’s obligations are subject to the review of the Condominium Documents and Financial Information by Buyer’s counsel. Once the Offer is signed, I can almost always locate the Master Deed and Condominium Trust on-line. I will do this right away and alert my client to any aspect of the documents (pet’s policy, right of first refusal, policy on rentals) which I think is important. The Buyer’s Agent should be obtaining a current Financial Statement, Budget for the coming year and Minutes (if any) of the Condominium Trustees. I will review these, as well, and report any items which may be “red-flags”.

•3.       Purchase and Sale and Thenafter. There are certain basic items which I will include in my Buyer’s Rider. These include a statement about no future assessments and title representations which will be important at the closing table. My firm will obtain what is called a Municipal Lien Certificate which indicates the status of tax payments to the city or town where the Unit is located. Normally, the Buyer’s Agent will track down the 6(d) Certificate (statement that the Condominium is current in monthly condominium fees) and a Certificate of Insurance issued by the insurance carrier, who insures the Condominium common areas, which indicates the Buyer as an insured under that policy at 12:01 AM on the date of closing. The Buyer’s Agent often assists the Buyer in obtaining an HO6 Policy which protects personal property within the Buyer’s Unit and liability for occurrences within the Unit.

So, you can see how truly “joint” the enterprise between Buyer’s Agent and Buyer’s Attorney has become in terms of Condominium purchases. Together, we cannot solve all the problems which exist in Condominium governance. On the other hand, we can make sure that we have an informed, and prepared, consumer, and that knowledge can do nothing but make the experience more manageable.

Condominium Trustee Meeting Minutes–Important Information Often Neglected

Condominium

The problem is this. Many condominiums are frightfully mismanaged. Nobody wants to serve as a Trustee, and so the people who do serve are either megalomaniacs or people who don’t have much business savvy, but have a lot of time on their hands. Meetings of Trustees are poorly attended. A kind of Peter Principal takes over–the least qualified, either from a business or ethical sense, are in charge. There are very few really responsive Condominium Management Companies. If you are involved with a good one, they find a way to charge for every possible service, which somewhat negates their effectiveness.

Well, my rant is now officially over. I have gotten this off my chest (41 years of frustration) and now I can go on with my post. If (and this is a big “if”) we find a well-managed Condominium which has regular meetings of Trustees, and keeps good minutes of same, we can do a much better job for our Buyer of a Unit in this Condominium than if these documents were not present,

When I can locate same, I ALWAYS review at least one year’s minutes to try to uncover any lurking assessments, or shrugging Unit owners. If there is consistent discussion about painting all the Units, or replacing the elevator, I better let my Buyer know that. He or she is almost definitely looking at an upcoming assessment, and it is extremely difficult to exact any help on this from the Seller since it is only in the “preliminary” stages. But, we can at least tell our client that it is coming.

Ditto, if there are discussions about Unit owners who are not paying their monthly fees. In Massachusetts where I practice law, there is a fool-proof method to get these fees, from the Lender if the Unit Owner will not pay.Most other states provide similar statutory relief.  If this Condominium has not been diligent in collecting delinquent fees, then it is poorly managed, and your Buyer will pay the price for this somewhere down the road.

Other information, sometimes of a more positive nature, is also found in the minutes. If a lot of people are participating in taking on tasks, that is a good sign. There is a spirit of participation from many, and that usually works the best for Condominiums. If one or two individuals are doing everything, you may have a case of Condominia Tyranus, which generally means that your client will be subject to the whims and fancies of a few  people who may have nothing else to do, or, worse yet, love being “in charge”. if left to their own devices, these people can literally terrorize the people who live in the Condominium.

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