Conversion condominium may have been an apartment

Posted10/24/2020 7:00 AM

Q: I am looking to purchase my first condominium unit. My real estate agent referred to one of the properties I am looking at as a new "conversion condominium." What does that mean?

A: A "conversion condominium" means a property that contains structures which are, or have previously been, wholly or partially occupied prior to the recording of a condominium declaration, by persons other than those who have contracted for the purchase of condominium units. In other words, the property is not newly constructed for condominium ownership, and was previously occupied.


A common example of a conversion condominium is an apartment building, previously or currently occupied by tenants, that is "converted" to a condominium form of ownership. For a while there, it was very popular to convert industrial buildings to residential condominium units.

Purchasers of conversions condominiums should pay particular attention to the property report provided by the developer. For conversion condominiums of more than six units, the property report must include an engineer's report furnished by the developer as to the present condition of all structural components and major utility installations in the condominium. This statement must include the approximate dates of construction, installation, major repairs and the expected useful life of such items, together with the estimated cost (in current dollars) of replacing such items.

In a conversion condominium, the purchaser from the developer will be the first person to own and occupy the condominium. However, the unit may have been occupied by someone else prior to the date the property was converted to condominium form of ownership.

Q: I asked the developer's sales person at a condominium project for a copy of the property report. The developer's sales person said I would receive the property report if and when I sign a contract to purchase a unit. A friend of mine said I should have received the property report at the time I looked at a unit. Which is correct?

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A: Section 22 of the Illinois Condominium Property Act addresses this issue. In relation to the initial sale or offering for sale of any condominium unit, the seller must make full disclosure of, and provide copies to the prospective buyer of, certain information relative to the condominium project. That information is included in what is commonly referred to as a "property report." The property report should have been provided to you at the time you were looking at a unit in the condominium development; you do not have to sign a purchase contract in order to receive the property report. The approach followed by the sales person in your case was probably either out of ignorance, or an attempt by the developer to save money due to the cost of printing a property report.

Q: I live in a condominium. As the result of a storm, my unit was damaged. As it turns out, both my personal insurance and the condominium association's property insurance cover a portion of the damage to my unit. Should my insurance or the association's insurance cover this "overlapping" coverage, or is it split, say 50-50?

A: This situation is contemplated by Section 12(f) of the Illinois Condominium Property Act. If at the time of a loss under the association's policy there is other insurance in the name of a unit owner covering the same property covered by the association's policy, the association's policy is primary insurance. This means the association's insurance would pay the claim first. The owner's insurance would only pay a portion of the claim if the association's insurance policy proceeds are insufficient to cover the loss to the property covered by both insurance policies.

• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in the Chicago suburbs. Send questions for the column to him at The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.

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