Converting a Condo to a Townhome? is it possible?

13 Replies

So here is the situation. I purchased a condo in an a development that does not have an HOA. The original developer of the Condos went bankrupt and after that point there has not been a functioning HOA. One of the owners who owns 20 out of 32 units tried to institute an HOA a couple of years back but he failed to get the other owners on board. He took them to court and lost so for several years this place has been without any HOA.

I pay my own taxes for my part of the building and land so I'm not in risk of loosing it even if the other people don't pay their taxes. Also I was able to get homeowners insurance to cover the outside of my section of the building in case something happens. 

My question is how can I legally get my unit changed from a Condo to a Townhome?

The property is located in TN.

You probably can't.   Townhomes usually are defined by controlling the land underneath the property.   Your condo probably shares the underlying land with the units above or below.  

In my state there is a condominium declaration, which is a legal process to subdivide a property into individual condo units.  The tax authority issues separate "PINs"  or parcel identification numbers.   I suspect that condo law has many similarities throughout the country.

Look at the condominium declaration paperwork. This is different than the fact there is no HOA.

A condo which is side-by-side is essentially a townhome anyway.  I think you have what you want.   What are the shared elements of this property?

I don't know about Tennessee, but in Texas Condo Associations and HOAs are regulated by the state. There are specific requirements for dissolving an association. I would start there, which would mean at least getting some advice from an attorney.

@Steve Racicot no one is collecting a monthly fee and everyone handles there own things, except there is one person who owns 20 of the units who has been mowing all the grass but no one is paying him. I did offer to pay him for my share of the mowing.

@Fred Heller As far as I can tell the association has already been dissolved. Apparently the court even made a ruling to keep it dissolved. It does seem like this is a question for an attorney so I have already reached out to one to find out. I was just hoping someone on here knew something before I went to the attorney. In any case I will post on here what the attorney says so that in the future if anyone has the same question they can use this thread as a reference. 

What did the attorney say? I bought a townhome that has no HOA. There was one in the past, but it was dissolved. All the townhomes in this neighborhood have staggered roof lines, so I had no problem replacing the roof. My problem is that the parking areas in front of all the townhomes is deteriorating, and I can't seem to find out if the city will replace the crumpled paving or if each owner is responsible. With no HOA, It will be next to impossible to get all the owners together to replace the parking area, especially since most of these units are rentals. Any advice would be welcome!

Regardless of whether there is an HOA or not, condominium is a legal type of ownership. Possibly it could be dissolved but that would take whatever the condo bylaws and state reg.s require which would likely be more 2/3 agreement by all owners, and may not be possible even then.

Sorry I forgot to update this post. So the condo association was dissolved and then reinstated by the state. But the problem is that the current HOA has no legal representation currently no board, no valid address etc. now another investor came in and bought about 70% of the units and they plan on trying to get the HOA up and running at the annual meeting in February. We will see if they succeed I believe they need 3 other owners to back them.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here