No No No, I'm not pregnant. Besides, don't you know it's (at this point in time) biologically impossible males to propogate the human species? In fact, this is what the woman at the San Francisco Department of Building Inspection told me as I submitted my application and fees to have the building in which I reside inspected as part of the condominium conversion process.
What's that you say? It's the two year process that I, and the couple that owns the other unit in our building, have embarked on to legally separate our homes. Currently, our two unit building must be sold as one entity and thereby can have only one mortgage. Because of the high cost of housing in San Francisco, purchasing a home as part of a Tenancy-In-Common (TIC) is a standard practice. I have thrown my hat into the home-owning game with another couple and the three of us are financially tied to one another. Every legal document pertaining to the building that is 121-123 Cortland Avenue has all three of our names on it.
The city of San Francisco does, however, have a method to turn a building such as mine into two legally separate residences. As a lawyer friend of mine tells me that ownership of this type is called "free, clear, simple". Right now I have a 54% stake in the building. Even though I don't intend on moving and needing to sell the place, my desire to get on this process started and completed as soon as possible is because there is always rumblings about changing a certain portion of the condo conversion law from which my building mates and I currently benefit.
Because San Francisco is a city with such a high percentage of its residents being renters, the tenants rights advocacy groups are a strong political force. Every condominium conversion that occurs represents, in most cases, units that will be occupied by homeowners (DUH) and thereby reducing the supply of apartments. The law currently states that only a certain number of units (200 as of this time) can be converted into condos within a calender year. A lottery is thereby run to determine which units in the city will change from apartments to condos. At this time, all buildings with three or more units must go through the lottery. Two unit buildings are exempt from the lottery and bypass it. An unlimited number of two unit buildings can be converted every year. Just this year, Mayor Gavin Newson vetoed legislation that had been passed by the SF Board of Supervisors that would have made it harder for two unit buildings to bypass the lottery. Because of this, getting the process became imperative.
The ultimate benefit is not any physical and/or material improvement to the building, but it lies in a huge gain in resale value. A condo that you can purchase that is "free, clear, simple" is much more attractive than a building in which you are tied at the waist to others who are, at best, friends and business partners.
This condo conversion process is no easy task nor inexpensive. There are lawyers in this city who deal completely with condo conversions. To tell you how crazy the world of real estate is in San Francicso, my partners and I have what we call "the bible" which is a 35 page TIC operating agreement written by THE lawyer in town who specializes in TIC agreements.
Our first move was to retain the services of a firm to help us initially with the application to the city and to coordinate all the minutiae of the process. $3,200 right off the bat. Next, we had to hire a Deed Company (free but there is an unspoken quid pro quo to use them when the new deeds are to be issued upon completion of the condos) and a surveying company ($6,000). This surveying company will take all the measurements inside and outside the builing and of the lot itself. The surveying company then produces the "mylar" sheets that will be submitted to the Planning Department.
$480 for the city inspection which will occur sometime 11 months from now. The city requires a fee of $8,600 for the process of condo conversion. I didn't mean to fixate on the costs, but because these have all been up front, they have tended to have a multiplicative effect in my mind.
So for the next couple years, you'll occasionally be updated on this process and be amazed at the glacial pace this will occur.
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