I understand that your buyers do not want to own a condo. But Austin and other Texas cities do not allow small lot subdivisions. So here we are.
When I was growing up, the idea I had of a condo was a glamourous box made of glass perched high on a tower in the sky. Although that still exists, many condos today look just like, well, houses. No wonder buyers, realtors, insurance agents, lenders and appraisers are confused.
In my first few years of doing two unit condo conversions in Austin, I spent a lot of my time explaining to everyone involved in the transaction why this was a condo. I thought that after 17 years of doing condo conversions these conversations might stop, but I still have them weekly: Yes it is a condo. No don't use a 1-4 family contract. No you can't dissolve it. Well you can, but then you and the other owner both have equal right to use your living room.
“ No wonder buyers, realtors, insurance agents, lenders and appraisers are confused.”
When I approach a small unit condo conversion, I do my best to make it function like what people think it is - a house. However, I have to use the same Texas condo laws whether I am working on a 2 unit condo conversion or a 200 unit condo conversion. So, some formalities of a condo regime may not be avoided. But owning a condo unit in a small unit condo regime does not have to be as burdensome as owning a condo unit in a larger condo development. Simplicity can be worked into the condo regime. However, the buyer demand for simplicity needs to be balanced with condo developer protections.
Especially in detached main house and ADU condo conversions, I strive to make the two unit condos function like separate houses. Each owner owns and is responsible for the maintenance of his or her unit. Very few expenses, if any, are shared. Clear processes for making any shared decisions are laid out, and dispute resolution provisions are detailed.
So, yes, it is a condo not a house. But that can still be okay.
Need to form a condo? Contact Julie Alexander at Julie@TexasCondoLaw.com.
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