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Old 08-05-2016, 12:59 PM
 
2 posts, read 2,156 times
Reputation: 11

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I'm presently living in a one-bedroom apartment which is on the 2nd floor of a 3-family house. Recently I offered to buy it from my landlord and we negotiated a price and were supposed to sign the P&S today.

According to the deed and condo documents, the condo is 837 square feet and includes 5 rooms plus one bathroom. The rooms are a kitchen, living room, dining room, bedroom, and an enclosed porch. My lawyer said the deed looked suspicious as the enclosed porch should not be included as part of the living space. It is not finished (there are no walls inside, just the frame, and no insulation). And it is not heated. And since it has a separate entrance and is attached to the front of the building it is technically outside the exterior walls. Additionally, it appears that the landing of the stairway outside my unit (my unit is on the 2nd of 3 floors) is also included in my livable space. This is also unusual as the tenants of the 3rd floor have to use that landing to get to their unit.

I have no idea why the deed was written the way it was. Perhaps they were trying to pad the sq footage of the 2nd floor unit for some reason. The building was converted to condos by my landlord (the present owner) so it has never been sold before.

The plans in the deed aren't detailed enough to make a good estimate of the real square footage. Without the landing and enclosed porch the condo might actually be as small as 725 sq feet. A big red flag is that the first floor unit is listed as 821 sq ft, which is smaller than the 837 sq ft of my unit even though the first floor appears to have more livable space (it has a longer hallway and an additional closet under where the stairs to my unit is).

I am definitely working on getting this all straightened out but I really have no idea what the consequences are of such an error. Maybe this is common and the sq footage numbers are never exact? Or maybe enclosed porches and common stairway landings are included all the time?

I still want to buy the condo but I'm not sure what to do. I did the comps assuming the condo was 837 sq ft and I'm assuming my landlord had her appraisal done with the appraiser under the impression it was 837 sq qt. So, I feel that if the condo does turn out to be 100 sq ft smaller, perhaps I should renegotiate the offer? Presently I am paying around $585/sq ft for the condo so a 100 sq ft difference is nearly $60,000. Or to put it another way, I'd be paying $664/sq ft, instead.

That said, it is still the same place, despite what it said on paper. Its not like the size of the place will change because the documents are modified. I will still have exclusive use of the front porch even though it would be included in the living space.

This is my first real estate purchase and I am not using a realtor since it is a private party sale. I'd appreciate any advice anyone may have.
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Old 08-05-2016, 01:53 PM
 
Location: Austin
7,205 posts, read 19,268,910 times
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Dish out the $400-500 for an appraisal. That will help with the measurement and also put that appraiser's opinion of value on paper. It's a small price to potentially save $60k.
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Old 08-05-2016, 02:24 PM
 
28,461 posts, read 76,240,392 times
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There is more fundamental issue here -- the terms of any condo purchase have to spell out what constituents a "common element" as down the road any potential issue with maintenance or liability is going to be a major, major headache.

If your attorney is not well versed in handling initial sales of a converted condo you need to find one that is capable of protecting your rights.

I am not saying that the landlord that did the conversion is in the wrong, or that they are trying to pull a fast one, just that without having all the I's dotted and T's crossed you could end in a very messy situation...
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Old 08-05-2016, 03:23 PM
 
2 posts, read 2,156 times
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Thanks. My attorney knows a lot about condo conversions and he has draw up several condo documents for conversions himself. It is very common in my city where every building is a multi-family house and there are very few single family houses or new construction.

He is presently working with the seller's attorney to work this out and update the documents. Right now I'm just waiting to hear what their resolution is.

I'm going to work on getting an appraisal but I don't have much time before I have to sign the P&S.
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Old 08-07-2016, 02:16 PM
 
774 posts, read 504,801 times
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Another thing to consider is that you'll want to have it correctly documented when it comes time to pay property taxes.
Why pay taxes for a 837 sq ft place if you only have 725?
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Old 08-07-2016, 03:16 PM
 
Location: Columbia SC
11,741 posts, read 9,980,675 times
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My last home was listed at about 400sq ft less. Turns out the reason was the builder had submitted the information on the base model when I had an optional FROG (400sq ft) added
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Old 08-08-2016, 09:58 AM
 
28,461 posts, read 76,240,392 times
Reputation: 18535
Default Rely on the expert you've hired...

Quote:
Originally Posted by mgio View Post
Thanks. My attorney knows a lot about condo conversions and he has draw up several condo documents for conversions himself. It is very common in my city where every building is a multi-family house and there are very few single family houses or new construction.

He is presently working with the seller's attorney to work this out and update the documents. Right now I'm just waiting to hear what their resolution is.

I'm going to work on getting an appraisal but I don't have much time before I have to sign the P&S.
If you have an attorney that you trust then rely on them for the legal opinions.

If you are still wondering about the other "elements" that may be "pumping up" your sq. ft. you really should not but too much weight on these things either way -- The appraiser will almost certainly focus on just the space that constitutes the "traditional" part of your condo -- they won't really assign much if any value to things that may or may not be shared. Even if there is something like a "rooftop deck" unless the access is exclusively from within you unit the appraisers will have a hard time saying this is a feature that adds value to your unit. Even in some "conversion" type condos where space that used to be kind of a grand entry for an older office building or something that space that is only good for "passing through" rarely by itself boosts the value of the actual units. While I understand how the stair space and back porch are different in a smaller conversion situation folks really won't willing to pay more for these. On the converse, if the 'increased' sq ft makes it seems like your "cost per sq ft" is lowered than the other unit(s) in similarly configured nearby building -- comparisons are going to be the closer units, which is this case is the 825 sq ft 1st unit which really is withing the margin or error for your unit listed as 837 sq ft. I can see no reason to get worked up about artificially be "credited" with just a bit more space from a financial stand point. Sure, the 1st unit probably "lives bigger" as it does have that closest under the stairs and the associated hallway space, but if the seller was really being nefarious this seems like an unlikely avenue...
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