CONDO CONVERSION 101: FROM A TO ZED, ZED CONDOS GUIDE

Who: Condo conversion in Washington DC typically involves property owners or real estate developers seeking to transform existing rental properties, including apartment buildings or mixed-use structures, into individual condominium units for sale. This process impacts property owners, tenants, and potential condo buyers.

What: Condo conversion is the process of changing the legal status of a rental property into condominiums. It involves creating individual units within the property that can be sold to individual owners. Key components include preparing condominium documentation, obtaining regulatory approvals, and addressing the rights and concerns of existing tenants.

Where: Condo conversions occur anywhere in the District of Columbia that allows for the zoning and construction of 2 or more units. Washington DC is a region with a significant demand for condominiums due to its urban environment and real estate market. The process unfolds within the confines of the specific property being converted, and it involves interactions with local government agencies, such as the Department of Housing and Community Development (DHCD) and the Department of Buildings (DOB).

How: Condo conversion in D.C. involves several essential steps:

• Eligibility to Convert: Property owners must first submit an application to DHCD, categorizing the property as either “Not a Housing Accommodation Exemption” (NHA) or “Vacancy Exemption” (VE).
• Public Offering Statement: DHCD reviews and approves the Public Offering Statement (POS), a critical document containing information about the condominium units and association.
• Recording Documents: The property owner records essential documents, including the Declaration, Bylaws, and Condominium Plat and Plan Survey, with DOB’s Recorder of Deeds and Office of the Surveyor.
• Tax Lot Numbers: DOB’s Office of Tax and Revenue assigns new tax lot numbers to individual condo units.

Why: Condo conversion serves multiple purposes:

• Profitable Investment: Property owners can generate revenue by selling individual condo units.
• Investment Flexibility: Property owners can also elect to continue to rent their condo units and/or live in a unit and/or sell some units.
• Market Demand: D.C. has a strong demand for condominiums, making condo conversions a lucrative option.
• Housing Supply: Conversions contribute to increased density in the city and provides more opportunities for homeownership, especially to first-time homeowners and new families.
• Housing Variety: Conversions contribute to diversifying housing options in the city.
• Tenant Rights: The process ensures the rights of existing tenants are respected, including providing them with the opportunity to purchase their units.

Learn more about condo conversions and how Zed Condos can assist you in navigating this process efficiently. Get Started

The condominium conversion duration varies case by case but typically ranges from 2 to 4 months. DHCD takes up to 8 weeks to review the Public Offering Statement submission, as per § 42–1904.06 of the Code of the District of Columbia. The condo conversion process can be conducted concurrently with the property’s construction and permitting process. To prevent delays, we encourage initiating the condominium conversion process as early as the property’s initial acquisition. At Zed Condos, we specialize in expediting the process on all our projects, with some approvals possible in as little as 45 days. Get Started

Condo conversion in D.C. involves 3 primary cost components. These include 1) D.C. fees for applications and recordation, 2) architect and surveyor fees, and 3) Zed Condos’ comprehensive services. Learn more on our Pricing page.

DC Filing Fees

When filing for a condo conversion in the District, the following are the associated fees:

• Step 1: $100 per Eligibility to Convert application (DHCD fee) Or $100 per unit for Tenant Election Certification Fee for tenant occupied properties (or $800 total, whichever amount is greater) (DHCD fee)
• Step 2: $100 per condo unit and parking unit for the Public Offering Statement Application (DHCD fee)
• Step 3: Condo Document Recordation Fee (DC Recorder of Deeds), typically ~$75 AND Plat and Plan Recordation (DC Surveyors Office fee), typically ~$495 per application.
  • Condo Plat – Fee Charges
    • Recording of plats and plans $390.00
    • Initial recordation (in additional to recording) $20.00
    • Recording amended plan and/or plans $195.00
    • Each amended sheet $20.00
    • Cancellation of Private Surveyor’s recorded Condo $100.00
  • Recorder of Deeds – Fee Charges
    • (a) One hundred fifty dollars ($150) for the recordation of any and all deeds of trust, mortgages, modifications to deeds of trust, amendments to deeds of trust, or amended and restated deeds of trust;
    • (b) Twenty-five dollars ($25) for the recordation of all other documents;
    • (c) Two dollars and twenty- five cents ($2.25) per page for a copy of a document; and
    • (d) Two dollars and twenty – five cents ($2.25) per document for certification of a copied document.
    • The surcharge fee ($6.50 per document) remains in effect and is an additional fee to (a) and (b) above.

Third-Party Fees

Throughout the condo conversion process, it’s important to budget for fees typical in construction projects, including:

• Architect’s Report (typically ~$500 for 2-unit condo). The architect of record often already includes this in their scope of work for condo permit plans.
• Surveyor Engineer’s Plat and Plan Survey (typically ~$1,200 for 2-unit condo). You will need to hire a licensed surveyor to perform a condo plat and a plan survey. Here is list of licensed survey companies who are registered with DC Surveyors Office that you can use.
• Settlement costs associated with sale or refinance of the condominium units. For a precise estimate of settlement costs related to your specific condo conversion project in D.C., it’s advisable to consult with a qualified real estate attorney, title company, or settlement agent who can provide you with a detailed breakdown based on your unique circumstances.

Zed Condos Service Fee

• Zed Condos specializes in streamlining the entire condo conversion process in Washington, D.C. Our services encompass project management, condominium document processing, and expediting, providing a seamless and efficient experience for property owners and developers.
• Zed Condos offers a comprehensive, start-to-finish solution, covering all three pivotal steps of the condo conversion process starting at $7,000. Discounts are available for those promoting equitable housing solutions. To learn more about our pricing and how we can assist you, visit our Pricing page

At Zed Condos, we take immense pride in our unique position as the premier Condo Specialists in Washington, D.C. What sets us apart are three fundamental pillars that define our commitment to our clients:

1. Exclusive Condo Conversion Focus: Zed Condos is the only company in D.C. that specializes exclusively in the condo conversion process. While others offer a range of services, we have honed our expertise in condo conversion processing and approvals expediting. This exclusive dedication allows us to offer an unparalleled level of proficiency and precision.
2. Expedited Approvals: Time is a critical factor in the fast-paced real estate industry. Zed Condos understands the urgency of your projects. With our in-depth knowledge of Washington, D.C.’s regulatory landscape, we specialize in expediting approvals from the Department of Housing and Community Development (DHCD) and the Department of Buildings (DOB). Our streamlined processes and project management services ensure that you receive the necessary condo registration approvals swiftly and seamlessly.
3. Zed Funding and Development Expertise: Zed Condos not only excels in condo conversion services but also provides financing solutions through its sister company, Zed Funding (zedfunding.com) and leads development projects via Zed Design & Development (zeddesigndevelopment.com). This integrated approach empowers us to deliver tailored solutions, strategic guidance, and meticulous attention to detail. With Zed Condos, your project is in the hands of seasoned professionals who understand the intricate aspects of real estate development and financing.

When you choose Zed Condos, you’re choosing a partner that specializes in your needs, respects your time, and brings a holistic understanding of the real estate landscape to the table. We are dedicated to simplifying the condo conversion process, ensuring your projects are completed efficiently, and providing you with the financing and development support you require to achieve your goals.

Embarking on your condo conversion journey in Washington, DC is just a click away. Zed Condos is here to guide you through every step of the process.

1. Complete the Get Started Form: Begin by clicking the Get Started page. This allows us to gather essential information about your project and how to reach you.
2. Customized Engagement Letter and Quote: After receiving your project details, we’ll send you a customized engagement letter and quote. This document outlines the terms of our partnership and provides a clear understanding of the fees and scope of work.
3. Schedule a Meeting: We’re always ready to set up meetings to address any questions or concerns you may have. We’re here to support you throughout the process. CONTACT
4. Start the Initial Process: Once you’re engaged, we’ll kickstart the initial process, which includes the Eligibility to Convert to ideally get you exempt from the 5% condo conversion fee. We’ll guide you through each stage, ensuring a smooth and efficient journey.

Ready to get started on your condo conversion project? Click the link to begin the process today Get Started. We’re eager to assist you in bringing your condo vision to life!

Financing options for condo conversion developers and property owners in Washington, DC are diverse, catering to various project sizes and requirements. At Zed Condos, we offer expertise not only in condo conversion processing but also real estate development financing via its sister company at Zed Funding. Here are some financing options to consider:

1. Traditional Mortgages: Property owners may secure traditional mortgages or loans to fund their condo conversion projects. These loans are offered by banks and financial institutions and typically require a solid credit history and down payment.
2. Private Loans: These short-term, asset-based loans are often easier to qualify for than traditional mortgages. They can provide quick access to capital for renovation and conversion expenses.
3. Private Investors: Some condo conversion developers seek private investors or equity partners who are willing to invest in the project in exchange for a share of the profits.
4. Zed Funding: Zed Condos offers a unique advantage through Zed Funding (zedfunding.com). As experts in real estate, we can connect developers with financing options tailored to their specific condo conversion projects. By leveraging our industry knowledge and network, we assist in obtaining competitive financing quotes to support your project’s financial needs.

Whether you’re a seasoned developer or new to condo conversions, exploring your financing options is a critical step. Reach out to Zed Funding to learn more about financing options to achieve your condo conversion goals.

The Department of Housing and Community Development mandates providing a Warranty against potential “structural defects” of all Units and common areas conveyed in a condominium conversion, per § 42–1903.16 of the Code of the District of Columbia. The warranty security shall be an amount equal to 10% of the estimated hard construction and conversion costs, including labor and materials, to satisfy costs that arise from a declarant’s failure to fulfill the requirements of Condominium Warranty Claims Clarification Amendment Act of 2022. The Declarant gives no warranty with respect to consumer products or appliances sold with the unit except as required by the security warranty. The warranty amount can be made payable as a bond, letter of credit, or other security form approved by the District. It is held by the Mayor’s Office and if no claims are made within two years, the funds are fully dispersed back.

Filing Fees for Condo Conversions When filing for a condo conversion in the District, it’s important to be aware of the associated fees:

The Department of Housing and Community Development charges a condominium Conversion Fee equivalent to 5% of each Unit’s sales figure, payable within 30 business days from the date of settlement, per § 42–3402.04 of the Code of the District of Columbia. Some main exemptions to the Conversion Fee include:

• Conversions granted a “Not a Housing Accommodation Exemption,” indicating the Property was previously solely owner-occupied or registered vacant for at least 12 months.
• Sales to low-income households (>80% of area median income)
• Sales to senior persons (62+ years of age)
• Sales to disabled persons (as defined by ADA)
• Sales to tenants who lived in the Property for at least 12 months prior to its conversion to condominium.

The primary exhibits to the Public Offering Statement include the following:

1. Declaration & Bylaws (commonly referred to as “Condo Documents”): Condominium documents outlining the rules, regulations, and governance of the Condominium Unit Owner’s Association.
2. Condominium Plat & Plan Survey: A detailed map or drawing of the property, illustrating the division into individual condo units and common areas.
3. Architect or Engineer’s Report: An evaluation of the property’s structural and safety aspects as well as the property’s useful life for its building components.
4. Certificate of Limited Warranty: A document providing a 2-Year Structural Limited Warranty for new construction or renovations. It is equal to 10% of the project’s conversion cost budget.
5. Construction Budget: An itemized list of expenses related to the construction or renovation of condo units. This is required to calculate the 2-Year Structural Limited Warranty.
6. Condominium Association Budget: A financial plan outlining expected condominium dues and expenses for the condominium association.
7. Sample Purchase Agreement: A condo conversion-specific template contract outlining the terms and conditions for unit sales.
8. Sample Deed: A template legal document transferring ownership of a condo unit to a buyer.
9. Contractor’s Contact Information: Contact details for the contractor responsible for the construction or renovation work.
10. Management Agreement (if applicable): A contract outlining the responsibilities of a property management company hired to oversee the condo association.
11. Estimated Settlement Charges: An approximation of the costs associated with the settlement of condo unit sales.
12. Building Permit(s): Official approvals from the Department of Buildings (DOB) allowing construction or renovation work.
13. Condominium Association Bill of Rights and Responsibilities: A document outlining the rights and responsibilities of condo unit owners and the association. A copy of the document is linked here.

The Architect’s or Engineer’s Report for Condo Conversions, as outlined in § 42–1904.08 of the District of Columbia’s legal code, plays a critical role in the conversion condominium process. Here’s a breakdown of what it entails:

1. Structural Assessment: The report begins with a comprehensive evaluation of the current condition of all structural components within the condominium. This assessment includes details such as:
   • Approximate dates of construction, installation, and any major repairs performed on structural elements.
   • A general description of each installed system, specifying whether it is suitable or unsuitable for use in the conversion condominium.
2. Adequacy Evaluation: The report assesses the adequacy of each system to fulfill its intended function both before and after the completion of the condominium conversion. This evaluation helps ensure that all structural components and utility installations meet the necessary requirements.
3. Estimated System Lifespan: It provides an estimate of the expected lifespan of the system components. This is crucial for understanding the longevity of various elements within the structure.
4. Replacement Cost Estimate: The report also includes an estimation, in current dollars, of the cost to replace each component that has a rated life shorter than the rated life of the entire structure. This information is valuable for budgeting and planning purposes.

The Architect’s or Engineer’s Report serves as a critical document in the condo conversion process, providing essential information about the structural integrity and utility systems of the property. This report must be submitted to the Mayor as part of the application for condominium registration to ensure compliance with legal requirements and to provide prospective buyers with transparent and vital information about the property’s condition.

The Condo Plat and Plan Survey is a detailed survey and set of plans that illustrate the layout, boundaries, and features of condominium properties, including units, common areas, and convertible spaces, essential for compliance and buyer transparency in condominium conversions.

You will need to hire a licensed surveyor to perform a condo plat and a plan survey. Here is list of licensed survey companies who are registered with DC Surveyors Office that you can use.

Here’s an overview explanation as stipulated in § 42–1902.14 of the District of Columbia’s legal code:

Recording Plats of Survey:

1. Location and Dimensions: Upon the recordation of the condominium’s declaration, one or more plats of survey must be promptly recorded. These plats illustrate several crucial aspects of the property:
   • The location and dimensions of the submitted land.
   • The location and dimensions of any convertible lands within the submitted land.
   • The location and dimensions of any existing improvements on the property.
   • The intended location and dimensions of any contemplated improvements not within the convertible lands.
   • The location and dimensions of all easements associated with the submitted land or common elements.
2. Convertible Lands and Withdrawable Lands: Plats must clearly label each convertible land and withdrawable land, assigning unique identifiers to differentiate them. These identifiers should not coincide with unit numbers.
3. Leased Lands: If certain portions of the submitted land are to be leased, these areas must be indicated and labeled as leased lands.
4. Withdrawable Lands: Any withdrawable lands should also be marked as such.
5. Encroachments: Plats should identify any encroachments on the property.
6. Construction Status: In cases where improvements have not yet commenced, this should be clearly indicated. Similarly, any improvements that have begun but are not yet substantially completed must be labeled as such.
7. Certification: Each plat must be certified for accuracy and compliance by a registered land surveyor. Additionally, the surveyor must certify the substantial completion of any units or portions depicted on the plats.

Recording Plans for Structures:

1. Structural Plans: Plans for every structure containing one or more units that are not within the convertible lands must be recorded concurrently with the declaration. These plans should depict the location and dimensions of the vertical boundaries of each unit within these structures.
2. Convertible Spaces: Any convertible spaces within these structures must be labeled as such.
3. Horizontal Boundaries: Horizontal boundaries of units with horizontal boundaries should be identified with reference to established datum. The presumption is that they extend at the same elevation for any part of the unit outside the structures, except for specific cases.
4. Certification: Plans must be certified for accuracy and compliance by a registered architect or registered engineer. The certification should also confirm the substantial completion of units or portions depicted.

Ongoing Updates:

• When converting or adding additional land to an expandable condominium, new plats of survey conforming to these requirements must be recorded.
• Any changes to convertible lands, structures, or units must be reflected in updated plats, plans, or certifications, as applicable.

The Condo Plat and Plan Survey is a vital component of condominium conversions, ensuring that comprehensive information about the property’s layout, improvements, and legal status is accurately documented and disclosed to potential buyers.

Yes. If your property is currently occupied by residential tenants during a condo conversion, it’s essential to navigate the process in compliance with DC’s legal requirements. This process is known as Tenant Elections to Convert to Condominium, regulated by DC’s Code of the District of Columbia § 42–3402.03.

Tenant Elections to Convert to Condominium: Under the Rental Housing Conversion and Sale Act of 1980, property owners can initiate an election among tenants to convert the property, such as an apartment building, into individual condominium units in Washington, D.C.

Timeline:

• Tenants have 30 calendar days from the date they receive the Owner’s Request for Tenant Election To Convert letter to organize a tenant organization and schedule an election.
• The election itself must occur within 60 calendar days of receiving the letter.
• In cases where no election is scheduled within 30 days, individual tenants have 15 days to contact the Department of Housing and Community Development, Rental Conversion and Sale Division, to schedule an election.

Voting Requirements: For the property to convert, at least 51% of the qualified heads of household in the occupied units must vote in favor of the conversion. If this threshold isn’t met, the property cannot be converted, and another tenant election cannot be requested for one year.

Protection for Vulnerable Tenants:

• The law offers protection to tenants who are low-income, elderly (aged 62 or older), or low-income and disabled. They retain the right to stay in their units and continue renting after the conversion.
• This right remains intact regardless of the election outcome, and these tenants can only be evicted for specific reasons such as lease violations, unpaid rent, or illegal activities.
• Tenants have the right to receive a summary of their rights and obligations, a list of voter qualifications and disqualifications, and information on where to seek technical assistance. For technical help, contact any of these agencies or organizations:
  • Housing Counseling Services (202) 667-7006
  • Latino Economic Development Corporation (202) 588-5102
  • D.C. Office of the Tenant Advocate (202) 719-6560
  • DHCD, Rental Conversion and Sale Division (202) 442-4407

Participation of Eligible Tenants:

• Low-income elderly or low-income disabled tenants are typically not eligible to vote in the tenant election unless they provide a written waiver of their right to stay in their unit after the conversion.
• It’s important to note that waiving this right could potentially subject them to eviction or notices to vacate if they don’t purchase their unit.

No Election Scenario: If no election is held, the property owner may proceed with the conversion without through Certificate of Eligibility to Convert a Housing Accommodation–Conversion in Lieu of Tenant Election

Navigating a condo conversion with tenants in place can be complex, and it’s crucial to ensure compliance with the law and respect tenants’ rights. For personalized guidance and assistance with the condo conversion process, including tenant elections, contact us today to get started on your condo conversion project Zed Condos.

In some scenarios, property owners may seek to proceed with their condominium conversion when tenants that reside in the property being converted fail to organize or schedule an election. This alternative pathway is referred to as the “Certificate of Eligibility to Convert a Housing Accommodation–Conversion in Lieu of Tenant Election.” Here’s an overview explanation:

• Approval Notification: Property owners who choose this option will receive an official approval notification from the Rental Conversion and Sale Division. This notice confirms the eligibility of the housing accommodation for conversion to condominium ownership.
• Posting the Notice: Property owners are required to post this approval notice conspicuously in common areas within the housing accommodation. This serves as a formal declaration of the property’s eligibility for conversion.
• Tenant Election Requirements: According to the Rental Housing Conversion and Sale Act of 1980 (Conversion Act), tenants have specific responsibilities when it comes to organizing and scheduling an election. They must establish a tenant organization within 30 days of receiving the owner’s request for an election. This organization is responsible for coordinating election arrangements and scheduling an election within 30 days of receiving the request.
• Request for Division Intervention: If tenants do not schedule an election within the initial 30-day period, the owner or any eligible tenant may request that the Division schedule and conduct the election. In such cases, the election must take place within 60 days of the tenants’ receipt of the owner’s election request.
• Conversion in Lieu of Election: When tenants do not organize an election or fail to request one, the conversion in lieu of a tenant election is approved. Property owners are required to post verification of the property’s eligibility for conversion in conspicuous common areas within the housing accommodation.
• Timeliness of Actions: Property owners must act promptly. This certificate of eligibility to convert is valid for 180 days from the date of the approval letter. If the property is to be converted into a condominium, the registration application must be submitted no later than the 180th day. If the property will become a cooperative, the notice of intent to convert must be provided to each tenant within the same timeframe.
• 120-Day Notice of Intent to Convert: Owners planning to convert to condominiums must provide each tenant with a 120-day notice of intent to convert. This notice serves as a bona fide offer to sell each tenant a condominium unit, with specific details included. The notice must be provided no sooner than ten business days after the cooperative association’s incorporation.
• Conversion Fee and Exemptions: Property owners are required to pay a conversion fee based on 5% of the sales price of each condominium unit or cooperative share. Some transactions are exempt from conversion fees, including those involving low-income households, long-term tenants, or low-income elderly or disabled purchasers.
• Relocation Payments: Owners must provide relocation payments to tenants who decline to purchase a condominium unit. Specific requirements and payment amounts can be found in the Conversion Act.
• Property Tax Abatement: Owners leasing converted units to low-income tenants may be eligible for property tax abatement. Applications for abatement must be submitted annually, and eligibility criteria should be discussed with the Division.

Navigating the intricacies of these processes is essential, and Zed Condos can provide expert guidance and support for property owners embarking on condominium conversions. For personalized assistance, reach out to Zed Condos to ensure a smooth conversion journey. Get Started today.

Yes. When it comes to condo conversions for mixed-use properties, the process can vary depending on the composition of the building. Here’s a breakdown:

1. Solely Commercial Units:

If your building consists entirely of commercial units, the conversion process becomes more straightforward. You will typically only need to record the essential documents, including the Declaration, Bylaws, and Condominium Plat and Plat Survey, just as you would for residential conversions. These documents outline the governance and boundaries of the condominium association.

2. Mix of Residential and Commercial Units:

When your building comprises a mix of residential and commercial units, the conversion process largely follows the residential guidelines. However, there are crucial distinctions to consider:

• Condominium Documents: The Condominium Documents for mixed-use properties will need to incorporate specific language that distinguishes the commercial units and outlines their applicable uses. This ensures that the rights, responsibilities, and usage guidelines for commercial and residential units are clearly defined.
• Lease Considerations: If there are existing commercial leases in place, these need to be reviewed and factored into the conversion process. Some commercial tenants may have lease provisions that affect their rights during and after the conversion.
• Future Management: Determine how the mixed-use property will be managed post-conversion. Will there be separate condominium associations for residential and commercial units, or will they be managed together? Develop a comprehensive management plan to ensure the smooth operation of the property.

The condo conversion process for mixed-use properties differs based on whether the building comprises solely commercial units or a mix of residential and commercial units. For the former, focus on recording essential documents. For the latter, follow the residential guidelines while incorporating specific language to address the commercial units’ distinctions and applicable uses. By navigating these considerations thoughtfully, you can successfully complete your mixed-use condo conversion project.

Yes, it is possible to convert a commercial (non-residential) building into residential condominiums in Washington, D.C. The condominium conversion process for commercial buildings in Washington DC, bears several similarities to typical residential-to-residential conversions. However, there are specific considerations when dealing with commercial tenants as they are typically bound by their lease agreements.

Converting a commercial building into residential condominiums in Washington DC, can be a complex endeavor, but Zed Condos is here to simplify the process. Get Started today.

Yes. New construction projects on vacant land may be exempt from submitting the “Eligibility to Convert” application and the associated 5% conversion fee. These exemptions can result in cost savings for developers.

At Zed Condos, we’re well-versed in the intricacies of new construction projects on vacant land, and we’re here to assist you in navigating this process efficiently. If you’re contemplating the conversion of vacant, undeveloped land into residential condos in D.C., we encourage you to provide this information in your application on the Get Started page. Doing so allows us to assess your project and explore potential discounts tailored to the reduced scope of work involved.

Condominium units may only contract or be marketed “for sale” when the condominium has been registered with DHCD and the Public Offering Statement has been approved. Until then, you may only market the units as “coming soon” and online and physical marketing should include clear disclaimer such as “Units are not yet registered with the Department of Housing and Community Development, Rental Conversion and Sale Division. No units will be offered for sale prior to Registration.” A non-binding reservation agreement may be accepted before the Public Offering Statement is approved, at which point the buyer may elect to engage in a binding purchase agreement.

After receiving approval for the Public Offering Statement (POS), you can commence advertising your condo units for sale and accepting binding contracts. Once at least 75% of the units are successfully sold, the next step involves organizing a handover meeting. This meeting can be scheduled either by your chosen management company or, if applicable, by Zed Condos for self-managed units.

If you’re not immediately prepared to sell the units after receiving approval for condo conversion, you can opt for a strategy known as “condo shelving.” Condo shelving involves obtaining approval for the conversion process but delaying or “shelving” the actual sale of individual condo units. The condo shelf approach can be useful for various reasons, such as waiting for a more favorable market, completing necessary construction work, or even if you intend to lease the property first.

Condo shelving essentially means putting the conversion on hold without initiating unit sales. It allows you to secure the necessary approvals for the condominiums without immediately transitioning to selling them as separate condo units.

One significant advantage of condo shelving is that, since you haven’t subdivided the property into individual condo lots yet, you only need to pay property taxes for the original property, rather than separate taxes for each condo lot number. This may lead to cost savings while you prepare for the next steps in your condo conversion project.

At Zed Condos, we offer flexibility in our condo conversion services to accommodate various project timelines and goals. If you choose condo shelving, or if you plan to lease your property first, you can indicate your preferences in your application on the Get Started page or learn more about the associated “Starter Option” on the Pricing page.

Condo conversions represent a more intricate endeavor compared to a standard house “flip.” This complexity arises from the involvement of zoning regulations, permitting prerequisites, and a larger construction scope. However, the decision to tackle this greater real estate investment challenge often reaps higher financial rewards. The potential for increased unit count allows for a broader target market due to lower price points per unit, which, in turn, frequently translates into significantly augmented profits, especially for seasoned D.C. rehabbers. In certain scenarios, a condo conversion has the potential to yield returns three times greater than a conventional flip. It’s vital to acknowledge that the permitting and construction phases for condo conversions are notably more intricate and time-consuming. Thus, before embarking on a condo conversion project, it’s crucial to assess whether you and your contractors are equipped to handle the intricacies of a larger-scale condo endeavor that may extend over 12 to 24 months for permitting and construction. With the right team, resources, and a strong commitment, condo conversions can be a rewarding and profitable journey in the ever-evolving landscape of Washington, D.C.’s real estate market.

No, a property management company is not required for a condominium association, but its necessity often depends on the size and complexity of the association. For larger condominium associations, typically consisting of 10 or more units, hiring a property management company is encouraged and often advantageous. Here’s why:

Larger associations tend to have more extensive responsibilities, higher transaction volumes, and greater financial complexity. Property management companies can offer valuable expertise in handling these aspects, which can lead to more efficient operations, better financial management, and improved overall living conditions for residents.

However, smaller condominium associations with fewer units might choose to self-manage to reduce costs associated with hiring a management company. In such cases, engaged and capable unit owners or board members can take on the responsibilities of managing the association. Self-management can be a viable option for smaller associations, provided that the individuals involved have the time and expertise required for the role.

Ultimately, the decision to hire a property management company or self-manage a condominium association depends on factors such as the association’s size, budget, and the availability of qualified individuals willing to take on management responsibilities.

Property owners may choose to hire a condo management company or self-manage the association, depending on their preferences and expertise. A condo management company offers a wide range of services to facilitate the transition and efficient operation of the condominium association. Here are some common roles and services typically provided by a full-service management company:

1. Collection of Assessments: The management company oversees the collection of condominium assessments from unit owners, ensuring that these fees are collected in a timely manner.
2. Payments of Invoices and Mortgages: Managing the association’s financial transactions, including the payment of invoices and mortgages.
3. Monthly Financial Reporting: Preparing and delivering monthly financial reports and statements to the condominium association, enabling the association to monitor its financial health.
4. Preparation of Annual Budgets: Assisting in the preparation of the annual budget, which outlines expected expenses and income for the association.
5. Administrative Duties and Recordkeeping: Handling administrative tasks, maintaining records, and ensuring compliance with regulations to streamline the association’s operations.
6. Coordination of Third-Party Vendors: Coordinating and managing contracts with third-party vendors for various services, such as landscaping and snow removal.
7. Repairs and Maintenance Pass-Through: The management company is reimbursed by the association for compensation costs related to maintenance technicians, encompassing salaries, benefits, healthcare, payroll taxes, and insurance.
8. Additional Services: These may encompass routine maintenance work, carpentry, electrical, and plumbing services, as well as addressing after-hours maintenance emergencies. Costs for these services are typically based on hourly rates plus materials.
9. Capital Upgrades: Assisting in the management of capital upgrade projects through a competitive bidding process, with the company’s fee usually being a percentage of the total project cost.

A condo management company plays a multifaceted role in ensuring the smooth operation of a condominium association during and after the conversion process. Their services encompass financial management, administrative support, and maintenance coordination, benefiting both property owners and the association.

The Code of the District of Columbia, specifically § 42–1904.02, outlines important regulations regarding the sale of condominium units in Washington DC. These regulations are designed to protect the rights and interests of purchasers in condo transactions. Here’s a breakdown of the key points:

1. Registration Requirement: Declarants (usually property developers or sellers) are prohibited from offering or selling any interest in a condominium unit located in the District of Columbia until the condominium, including that unit, is properly registered with Department of Housing and Community Development (DHCD).
2. Public Offering Statement: During the registration period and until all units have been sold to bona fide purchasers, the declarant must provide prospective buyers with a “current public offering statement” before disposing of any condominium unit not previously sold. This statement contains essential information about the condo project, association, and unit.
3. Purchaser’s Right to Cancel: Purchasers have the right to cancel the contract within 15 days after signing it or within 15 days after receiving the current public offering statement, whichever is later. This right allows buyers to back out of the purchase without penalty during this period, and any deposit made must be refunded in full.
4. Notification of Cancellation: If a purchaser decides to cancel, they must do so by delivering a notice of cancellation either by hand-delivery or by sending it through the United States mail with return receipt requested.
5. Mandatory Clause: The public offering statement and sales contract must include a clause that clearly states the purchaser’s right to cancel. This clause must be in a form prescribed by the Mayor of the District of Columbia.
6. Declarant’s Liability: Declarants are held liable under these regulations for any false or misleading statements in the public offering statement or any material omissions. Declarants are also liable for statements or omissions in the statement that they prepared or caused to be prepared. However, if they did not prepare or cause the preparation of any part of the statement, they are only liable if they had actual knowledge of false statements or omissions or should have known about them through reasonable care.

These regulations are in place to ensure transparency and fairness in condo sales and protect buyers from misleading or incomplete information. Compliance with these rules is essential for both declarants and purchasers involved in condo transactions in the District of Columbia.

If you choose to work with Zed Condos, we will ensure that all necessary documents, including the public offering statement, are prepared accurately. We’ll also ensure to include the mandatory cancellation clause in your sales contracts. Ready to get started on your condo conversion project? Click the link to begin the process today Get Started

Condo conversions in Washington, D.C. are subject to compliance and reporting requirements to ensure that the process adheres to local regulations and laws. Some of the key compliance and reporting requirements include:

• Public Offering Statement (POS): Property owners must prepare and submit a Public Offering Statement to the Department of Housing and Community Development (DHCD). This document provides detailed information about the condominium units and the condominium association.
• Recordation of Documents: Essential documents, such as the Declaration, Bylaws, and Condominium Plat and Plan Survey, must be recorded with the District of Columbia’s Recorder of Deeds and the Office of the Surveyor.
• Tenant Rights: The Rental Housing Conversion and Sale Act (RCSA) requires property owners to inform tenants (if any) about their rights during the conversion process. This includes providing tenants with the opportunity to purchase their units and ensuring their rights are protected.
• Eligibility Requirements: Property owners must meet certain eligibility requirements, and the property itself must meet specific criteria to be eligible for condo conversion.
• Reporting to DHCD: Throughout the conversion process, property owners may need to submit updates and reports to DHCD to demonstrate compliance with RCSA and other regulations.

It’s essential to work with experienced professionals, like Zed Condos, who are well-versed in the compliance and reporting requirements to ensure a smooth and compliant condo conversion process.

Condominiums, Homeowners’ Associations (HOAs), and Cooperative Housing Corporations (Co-ops) are all common forms of shared housing arrangements, but they have distinct differences:

1. Ownership Structure:
   • Condominiums: Condo owners have individual ownership of their units, including the interior spaces. They also share ownership of common areas and amenities with other condo owners. They have more control over their units.
   • HOAs: HOA members typically own their individual homes but collectively own and maintain common areas and amenities within a planned community, such as a neighborhood or a gated community.
   • Co-Ops: Co-op residents do not own individual units; instead, they own shares in the entire cooperative housing corporation. This share ownership entitles them to occupy a specific unit within the cooperative.
2. Governance:
   • Condominiums: Condos are governed by an elected condominium association board. Unit owners have a say in decisions regarding common areas and building management.
   • HOAs: HOAs are governed by an elected board as well, but they typically have more control over exterior appearances and rules within the community.
   • Co-Ops: Co-ops have a cooperative board that can have significant control over who becomes a member and who can reside in the cooperative. They often have strict approval processes for new residents.
3. Fees and Assessments:
   • Condominiums: Condo owners pay regular association fees to maintain common areas and amenities. Special assessments may be levied for major repairs or improvements.
   • HOAs: HOA members pay fees to cover maintenance and upkeep of common areas, and they might also face special assessments.
   • Co-Ops: Co-op members pay a monthly fee that typically covers mortgage, property taxes, and maintenance costs. This fee can be higher due to the collective ownership structure.
4. Resale and Rental Restrictions:
   • Condominiums: Condo owners often have more flexibility to rent out their units or sell them to anyone, subject to association rules.
   • HOAs: HOAs may have more restrictions on renting out homes or selling to non-members, as they aim to maintain the community’s character and quality.
   • Co-Ops: Co-ops usually have strict rules regarding who can become a member and occupy a unit. They often require board approval for new residents.
5. Financing:
   • Condominiums: Financing for condo purchases is similar to that of traditional homes, and individual units can be mortgaged.
   • HOAs: Financing for HOA properties is also similar to traditional homes.
   • Co-Ops: Financing for co-ops can be more complex, as buyers often need to secure shares in the cooperative rather than taking out a traditional mortgage.

It’s essential to thoroughly understand the differences between these housing options and carefully review their respective governing documents and rules before deciding which one aligns best with your preferences and lifestyle. Each has its advantages and drawbacks, and the right choice depends on your individual needs and priorities.

Condo conversions in D.C. may have tax implications, including property tax changes and potential capital gains tax. It’s advisable to consult with a tax professional or accountant who is familiar with local tax laws to understand and plan for any tax obligations associated with condo conversions.

Here are some considerations for both developers and individual condo owners:

1. Homestead Deduction: D.C. offers a Homestead Deduction to residents who own and occupy their primary residence, including condominiums. This deduction reduces the assessed value of the property for tax purposes, potentially resulting in lower property taxes.
2. Capital Gains Tax: Condo owners may be subject to capital gains tax when they sell their units, depending on factors such as the length of ownership and profit earned from the sale. However, there are provisions in the tax code that can provide exclusions or reductions in certain cases.
3. Property Taxes: Individual condo owners are responsible for property taxes on their units. The tax amount is determined by the assessed value of each unit, and it can vary depending on the property’s location and size.
4. Transfer Taxes: It’s important to note that typically, in Washington, D.C., developers and buyers often share the responsibility for paying these taxes, with each party contributing their portion. The specific arrangements may vary, but these taxes are a standard part of property transactions in the District.
   1. Deed Recordation Tax: This tax is applied when deeds to real estate in the District of Columbia are recorded. The tax is calculated based on the value of the consideration given for the property. However, in cases where there is no consideration or the consideration is nominal, the tax is imposed based on the fair market value of the property. The tax rate for deed recordation is as follows:
      1. 1.1% of the consideration or fair market value for residential property transfers less than $400,000.
      2. 1.45%of the consideration or fair market value on the entire amount if the transfer is greater than $400,000.
   2. Deed Transfer Tax: This tax is applied to each transfer of real property at the time the deed is submitted for recordation. Like the deed recordation tax, it’s also based on the consideration paid for the transfer. In cases where there is no consideration or only nominal consideration, the tax is determined based on the fair market value of the property conveyed. The tax rate for deed transfer is the same as for deed recordation:
      1. 1.1% of the consideration or fair market value for residential property transfers less than $400,000.
      2. 1.45% of the consideration or fair market value on the entire amount if the transfer is greater than $400,000.

Buyers, especially in residential property transactions, should be aware of these taxes as they can significantly affect the overall cost of purchasing a property. It’s advisable for both developers and buyers to consult with tax professionals and legal experts to ensure that they understand their obligations and can plan for these tax liabilities accordingly when engaging in property transactions in D.C.