Converting NYC Apartment Building to Condos - can it be done?

[Maura Paler]

We live in a 4 unit building that is currently apartments in NYC. 

The owner would like to convert to condo, but apparently this is a very tricky and expensive thing to do in NYC with tenants in place. If he is able to do this we would like to buy ours and possibly another of the units. 

Does anyone have any experience with this? Apparently the best way is for each of the four tenants to remain in their respective apt and each of us buys our individual unit, which is a possiblility. Otherwise the owner has to vacate the whole building to convert to condos, which seems bizarre and is certainly impractical. 

Any ideas would be much appreciated....thanks! 

Maura 

[Travis Lloyd]

The answer above is very accurate as far as the process. But I can say from experience that in NYC it is tremendously challenging and expensive (for the landlord) as legislation was passed at the state level in New York a few years ago, and then enhanced even further in the city specifically.

1) 60% (or 51%? don't remember) of current tenants must agree to purchase their unit.

2) The price will be high, because the landlord is going to factor in the costs of the condo-conversion (it will cost the landlord 100-300k for a smaller building).

3) The landlord cannot vacate the building to convert to condos. Not anymore, and in your case it may pose a real problem. There is a percentage of vacancy limitation for the preceding 12 months (or 24 months?) from the date of application for the conversion. See, the landlord has to apply to the state's attorney general, and they will look at the occupancy. If more than 10% of the residents were "vacated" during that time, the landlords application will be denied.

So if all 4 of you agree to purchase the condos, other than the time it takes and the expense, it should go smoothly. If 1 of your neighbors does not want to buy, you may have a problem as 1 would equate to 25% of the occupants.

Now all of this is true and accurate from my experience having done this in the city - BUT, I never tried with less than 16 units. It is VERY possible that there are exceptions for buildings of 4 or less units. 4 or less units qualify for FHA mortgages under a federal guideline - so perhaps the prohibitive New York legislation only applies to 5+ units?