Common Mistakes in Condo Conversions—And How to Avoid Them

Condominium conversions can be a smart investment strategy, but they also present legal and logistical challenges that require thoughtful planning. Many of the most costly mistakes arise from skipping critical steps or underestimating the legal complexity of converting a multi-unit building into a condo regime. 

Here are the most common pitfalls—and how to avoid them. 

Mistake 1: Marketing or Selling Units Before the Condo Regime Is Established 

Attempting to sell or market units before filing the required condominium declaration and plat is one of the most common—and serious—errors. Without this structure, the property cannot be legally divided, and title insurance cannot be issued. 

Solution: Work with a legal professional early to prepare and file all required documents before listing or selling units. 

Mistake 2: Relying on Boilerplate Declarations or Bylaws 

Using generic forms that fail to address the specifics of your property can lead to confusion and disputes. Important considerations—such as shared utility systems, parking allocations, and short-term rental rules—must be tailored to the unique layout and purpose of the property. 

Solution: Customize your governing documents with the help of an experienced attorney to reflect your specific needs and risks. 

Mistake 3: Failing to Properly Allocate Common Element Ownership and Maintenance 

Ambiguities in the declaration regarding who maintains HVAC systems, pipes in shared walls, or exterior structures can lead to conflict and unexpected costs. 

Solution: Clearly define maintenance responsibilities and cost-sharing formulas in the declaration and bylaws. 

Mistake 4: Not Planning for Long-Term Reserves 

New associations often underestimate the need to fund long-term repairs or replacements for roofs, elevators, or foundations. Without reserves, associations may have no choice but to issue large special assessments when major repairs arise. 

Solution: Create a reserve plan at the outset and include reserve funding in the initial budget. 

At Title Stream, we help developers and property owners avoid common pitfalls and build solid legal foundations for condominium conversions that are attractive, compliant, and financially sustainable.