Condominium Conversion

A condominium is a subdivision of a building or other parcel of land into two or more units and areas to be used in common called "common elements." Such entities are solely creatures of statute, the first Maryland condominium statute having been passed in 1957.

A condominium unit has all the incidents of real property. It can be mortgaged, sold, rented, etc. It enjoys a separate tax parcel and tax account with the local jurisdiction, and stands alone as a discrete parcel of land. (Actually, in most cases it would be more accurate to describe it as a discrete "cube of airspace" since there are usually upper and lower boundaries to the unit, unlike most parcels of land.) The difficulty is in describing the limits of the units and in identifying all the interactions between them. Those interactions (who has access to what, who is responsible for this repair or that, etc.) reflect how the place is to be used and enjoyed in the future, and thus must be carefully thought through at the regime creation.

Condominium Sheet
(Click to enlarge)

The current version of the statute requires that, along with by-laws and a document called a "declaration," plats signed by a licenced surveyor depicting various features be recorded among the land records of the county in which the land is located. Those "features" include a boundary survey, "diagrammetric floor plans ... which show the measured dimensions, floor area and location of each unit...," "the elevation or average elevation...of the upper and lower boundaries of each unit," and similar detail on the common elements.

One important consideration: the statute requires that the plat show the location of each unit and the common elements as constructed. Thus, condominiums of proposed buildings are not allowed under the current wording of the statute.

Condominiums also have their downsides. Owners of units are bound together in the ongoing maintenance of the common elements, and are subject to by-laws and other rules created at the time of the creation of the regime. Some argue that condominium units are not as desirable and therefore fetch lower prices on the market than other forms of real estate. Our expertise does not extend into that area, so we cannot comment on whether that is true or not. We can say that there are lots of condominiums around, and they appear to be owned and occupied!

Condominium or Subdivision?

Occasionally the question of whether to subdivide a parcel via the normal subdivision process or via the condominium statute arises. Generally, when the functional separation of the buildings would be cost-prohibitive, a condominium is the best route. Many sites, such as churches with various buildings on the same lot or commercial sites with multiple structures, are constructed so as to share heating plants and other utilites across the buildings. The normal subdivision process requires that all utilities connecting the proposed lots be severed, to the effect that each lot stands alone. Although that sounds good in the abstract, actually severing those utilites and installing replacements can run into the hundreds of thousands of dollars. In those instances, a condominium regime may be the best solution. In that manner, the existing infrastructure can be preserved and used, albeit with additional legal structures to protect the various unit owners. It can turn a "dead-on-arrival" idea into a workable plan.

We here at Martenet have lots of experience in condominium surveys and would be delighted to discuss your project with you.

Copyright © 2015 S.J. Martenet & Co., Inc.