There’s an article in today’s SF Examiner detailing changes in the condo conversion lottery process. In the 2006 lottery, held earlier this year, buildings that had been waiting for six and seven years were given the green light to start the process.
That’s really, really good news for people who have been hanging around buying lottery tickets for the last several years, but the downside is for new applicants: “With the number of condo conversion applicants increasing each year, the odds will get worse for each incoming group. For example, an applicant who entered the condo lottery in 2002 becomes an automatic winner in 2007. However, applicants who enter the lottery four years from now, in 2010, could face a waiting period of up to 24 years, the DPW report notes.” Ouch!
In the same article but on another topic, the reporter has this to say about why people buy TICs: “Although a tenancy-in-common, which has a shared mortgage, is one form of home ownership, it’s not as profitable as the individually owned condominium, which is why many TIC owners buy their units with the hope of converting them to condos.” People who buy property — any kind of property — want it to be a good investment and be profitable when it’s time to sell. But to name the desire for profitability as the only reason that TIC owners plan to convert their buildings is missing a large part of the picture. Condo conversion provides more immediate benefits than potential profit at the time of sale: it gets all the owners off a joint mortgage and onto separate deeds, mortgages, and property tax bills; it makes refinancing a whole lot easier; and yes, it makes selling much easier.
If you have any questions about TICs, please don’t hesitate to get in touch.