(June 5, 2020) CHICAGO—Kovitz Shifrin Nesbit (KSN) handled the closing of a 36-unit condominium association deconversion deal amidst Coronavirus setbacks. KSN Attorney Omar Malik describes this deconversion sale as, “Unique in that it was able to close, despite the turmoil caused by COVID-19”.

 

Located in Lake County, the sale of the Deerfield Gardens Condominium Association to be converted into apartments was approved by a vote of the unit owners under Section 15 of the Illinois Condominium Property Act. A deconversion is a process by which a buyer makes an offer to purchase all units in the association and requires the approval of not less than 75% of the ownership. Deerfield Gardens Condominium Association was approved with an 83.945% vote – well over the minimum requirement.

 

Deerfield Gardens Condominium Association which was represented by KSN throughout the Section 15 sale, was purchased for a price of $6.15 million. The purchase which began in October 2019, encompasses all 24 condominium buildings consisting of the 36 residential units, and 60 parking spaces.

 

“Once the COVID-19 pandemic occurred, many deals fell apart, with buyers walking away from their earnest money and unable to close due to frozen debt markets” said Malik. But that didn’t deter the broker, 33 Realty, from advocating for their client. No matter a pandemic or government Stay-At-Home Order, 33 Realty remained devoted and focused on the initial end goal.

 

“In order to satisfy the buyer and its lender, KSN and 33 Realty worked tirelessly to ensure that the occupancy rate at the time of closing would meet the requirements of the buyer and its lender, and to satisfy all of the buyer’s questions and concerns to facilitate a smooth closing, which is one of the first deconversions to close since the pandemic began” describes Malik.

 

During a deconversion sale, an investor may often pay more for an entire condominium association than a unit owner would receive on a single sale. And as this pandemic has caused the real estate market to come to a practical halt, deconversion sales are an easy way for unit owners to gain back lost value on their property and investors to join the rapidly increasing rental market in Illinois.

 

As best said by KSN Attorney Omar Malik, “Buyer, broker, and seller worked together to overcome all obstacles posed by the current, unprecedented conditions, and complete this sale in a smooth, efficient, and timely fashion”.

 

KSN attorneys have handled over thirty condominium deconversions for buildings as small as 6 units and as large as 924 units (the largest deconversion project attempted to date in Illinois), including:

 

  • River City – a downtown high rise-condominium association with 449 units, closed in December 2018
  • Flats on LaSalle – a downtown condominium association with 250 units, closed in December 2018
  • Surfside Condominium Association – a high-rise association located on N. Sheridan with 188 units, closed in December 2018
  • Century Tower – a downtown high-rise condominium association located in The Loop with 296 units, closed in February 2018
  • 625 Wrightwood – a Lincoln Park condominium association with 98 units (residential and parking), closed in January 2017
  • Clifton Village – a Northside Chicago condominium association with 38 residential units, closed in August 2017
  • Loyolton – a Northside Chicago condominium association with 42 residential units, closed in December 2017
  • 2625 N. Clark Street – a Northside Chicago condominium association with 272 units (residential and parking), closed in November 2016

 

If your condominium association has been approached by an interested buyer, your association is in the middle of a potential sale or de-conversion, or you are a buyer interested in converting income property into condominiums, please contact KSN to discuss your legal needs. Please visit www.ksnlaw.com or call 1-855-537-0500.

 

Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collectionslandlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin.

 

Please note the material contained in this article is for educational and informational purposes only and does not constitute legal advice. No attorney-client relationship is established by your review or receipt of the information contained in this article. You should not act on the information discussed in this article without first obtaining legal advice from an attorney duly licensed to practice law in your State. While KSN has made every effort to include up-to-date information in this article, the law can change quickly. Accordingly, please understand that information discussed in this article may not yet reflect the most recent legal developments. Material is not guaranteed to be correct, complete, or up to date. KSN reserves the right to revise or update the information and statements of law discussed in the article law at any time, without notice, and disclaims any liability for your use of information or statements of law discussed on the article, or the accessibility of the article generally. This article may be considered advertising in some jurisdictions under applicable law/s and/or ethical rules/regulations. © 2020 Kovitz Shifrin Nesbit, A Professional Corporation.