Condominium with commercial first floor

[Carnivore]

I dont know or care if the condo project is approved or not approved with any particular type of lender.

My major concern is the cost to maintain and run the building and site. Who is responsible for what?

This situtation leaves the condo association wide open to problems. What happens if the developer convinces the local yokel town council to allow
a change in use of the commercial property after the fact.

What if a Bail-bondsmen, tatoo parlor, T_tty bar and most importantly a methadone clinic are now your neighbors? Some people would think this is great! Me, I would be mad! I have a car I dont need these places within walking distance!

 

[Jim Onderisin]

I've not run across this type situation, either. Usually, the commercial units are part of the condominium association or are leased from the association. I'd do what Brian suggests. The answer has to lie in the way the declarations are written.

I can't imagine a separate condominium building on TOP of a commercial building. Please let us know what you find out.

 

[Don Clark]

Similar operation in my market

This is a similar operation in my market. Hotel as well as a Condo.

http://www.residencesattowncenter.com/

 

[Lost Cause]

It is not at all uncommon here to have separate condominium associations in a single structure. Somewhere in the documentation there must be language specifying who is responsible for expenses relating to common elements in the property. This could be crucial in your valuation. I have seen a condop (similar to this but where one part is owned by a condo association and the other part is owned as a coop) where the coop went bankrupt as it was burdened by an unreasonable portion of the expenses. The condo owners thought they had a real good deal until the coop went bust and suddenly all of the burden shifted back to the condo.

 

[William K]

Just wanted to post updated info on thread as people have asked . The building is legally divided into 2 entities - 1 residential (condo units) with it's own legal, and another Commercial with it's own legal. There is a RECIPROCAL EASEMENT AGREEMeNT for the building between both parties. The commerical has some use restricitions and the residential (condo units) have granted easements in favor of the Commercial property ( maintenance of exterior is residential units responsibility). My client is now deciding if they wish to lend on said condo unit (the first scheduled to close). The realtor involved is making a fuss of course stating none of the other appraisers questioned this? (yada, yada, yada). Then made a mistake by telling the borrower this other company (lender) had no problem doing 2 of the loans in here (again loans not closed). So borrower calls realtors lender and informs of the possibility that they won't get financing from my client because of this issue, and lender states " We didn't know about this at all, we were under the assumption commercial was part of the condo association" OOOOOOPS! Now the realtor may have a bunch of deals falling apart. Again for new appraiser's out there ASK questions, ask questions ,ask questions! Don't take for granted what you think you know!

 

[Abzntminded]

It looks as though your client was lucky hiring you for the assignment.

 

[Jim Onderisin]

Good work, William. Not long ago, I appraised a townhouse unit in condominium development. I asked the sales lady if it was condominium ownership. She said, "No, it's not...it's a townhouse. I should know, I've lived in the development for years." You can't believe anything you hear, and only half of what you see.

 

[William K]

I get the whole "No it's a Townhouse" at least 6 times a year. I even gave a short presentation at an Association of Realtors and Loan underwriters gathering about 15yrs ago where I explained "Townhouse is a style just like a Ranch is a style". Then went into the Differences as to , Condos and PUD's. Then the first question afterwards and I qoute " I don't mean to sound stupid but do you mean if it's part of a Condo association then it really is a CONDO?". At that point I wanted to say "Sir you can no longer reproduce! We can't take the chance you will pass your genes to some child that will be ridiculed for the rest of their life!".

 

[George Hatch]

Sometimes the value isn't the most important thing in an appraisal.