by Andy Sirkin, Rosemarie MacGuinness and Cam Perridge (July 20, 2013)
This article answers the questions we are most frequently asked by clients who are converting their San Francisco properties to condominiums. The article does not discuss the requirements for qualifying a building for condominium conversion; for a discussion of that topic, see San Francisco Condominium Conversion Laws and Instructions.
Most owners will also incur fees in obtaining permits and addressing the citations in the building inspection report. Also, condominium buildings require different insurance policies, and these generally are more expensive than policies for apartment buildings. Finally, many of the benefits of condominium conversion cannot be realized without refinancing. The refinance process involves cost and, depending on market conditions, may increase monthly payments.
Buildings converting under the Expedited Conversion Program must pay an "Impact Fee" ranging from $4,000 per unit (if the building has entered and lost five or more condo lotteries) to 20,000 per unit (if the building has never participated in the condo lottery).
For 5-6 unit properties, state law requires that the California Bureau of Real Estate (“BRE”) approve the conversion and all associated legal documents in certain cases. To determine whether BRE will require this for a particular building, please call or office. If BRE approval is required, these buildings will incur the cost of professional budget preparation (+/-$4,500) and the BRE application fee (+/-$1,700).