Investing in a multi-unit residential property in Hollywood can be quite the lucrative venture, but only if planned appropriately. Yet there are drawbacks to such an investment; building a new complex of condominiums can prove costly, and some may not want to assume the long-term commitment that comes from owning rental units.
Yet those with such concerns may be able to blend the best of owning both types of properties by converting an existing building of rental units into condominiums. The question then becomes how does one deal with the current tenants.
Informing tenants of the intent of doing a condo conversion
One might assume that a tenant will choose to rent rather than assume the potential burdens that can come with owning a residence, and therefore not consider them as a potential buyer when converting to a condominium complex. Yet the current tenants one has in a location undergoing a condo conversion represent a potential pool of buyers. Plus, one has a legal obligation to them. Per Section 718.612 of Florida’s state statutes, a property owner engaged in a condo conversion has to offer current tenants the first right of refusal for purchasing their property.
Presenting options to current tenants
When fulfilling this obligation, Florida state law says that a property owner should provide tenants with a notification stating their intentions and presenting them with the following options:
- To purchase their individual unit
- To remain as a resident until the expiration of their current rental agreement
- To extend their rental agreement for a further 45 days while they ponder their next move (if their rental agreement expires in the next 45 days)
- To cancel their current rental agreement without any penalty
One has 180 days from sending this notification to follow-up with individuals tenants with purchasing information (including the propose purchase price of their unit).