Behind the walls
Buyers must take a careful inside look at the final
result of condo conversion
By Jeffrey Steele
Special to the Tribune
Published July 8, 2006
When home inspector Allan Monat conducted an inspection of a suburban
condominium conversion unit in February, his initial thought was, "This is
But when he got around to checking the functional flow of the plumbing system,
he discovered not much hot water emerged from the unit's sinks and showers.
"The structure was built prior to 1960, and there were galvanized water supply
lines going through the complex," said Monat, owner of Northbrook-based Metro
Real Estate Inspections Inc. "Around 1960, some municipal codes mandated that
lines be copper, because galvanized corrodes from the inside ... the flow gets
lower and lower, and frequently it clogs up."
The result can be no water flow at all, as Monat, a certified real estate
When Monat's clients learned of the water flow issue, they promptly backed out
of their planned purchase.
The situation he found points up a fundamental truth about buying a unit in a
building being converted from apartments to condos. For buyers, it's a time to
Some developers undertaking condo conversions lavish attention and money on
fixing up individual condominium units, but spend little time or cash addressing
costly building systems, say home inspectors and real estate agents.
That's why it's critical for buyers, relying on the services of experts, to
learn as much as they can about the building as a whole, not just the
condominium units they're purchasing.
"Regardless of what you're buying, you want to know what the developer did to
the building," said Michael Golden, co-founder of @properties, a leading
residential real estate brokerage firm in Chicago.
"There is a wide spectrum of condominium conversions. On one hand, there are
conversions where the units are converted as is or there is minimal kitchen and
bath rehab--and no work done on the building. On the other end of the spectrum
is a complete gut rehab of the building, with all new building systems, new
plumbing, new electric, new roof and new windows."
Buyers contemplating the purchase of a condo conversion need to determine the
age of the building and understand what has been done "behind the walls," he
They need to know, for instance, the condition of the electrical wiring, the
state of the heating and cooling system and whether the plumbing is 75 years old
or brand new. These, along with windows, roof and tuck-pointing, are among the
big-ticket items some developers skimp on when converting apartments to condos,
"That doesn't mean you shouldn't buy [the unit]," he hastened to add. "But you
need to know what's coming down the road. ... All these things are relative to
the price you pay. You need to go in with your eyes open, and understand the
expenses you may face--and ensure those are factored in to the price you pay."
What appears to be a great condominium deal may not turn out so if major systems
have not been addressed. On the other hand, a price that seems too high at first
may be a value if the building has been renovated and set up for long-term
health, he said.
Joe Keller was about to sign a six-month lease for a Gurnee apartment in June of
last year when he learned about Deer Creek Condominiums and decided to take a
look. He soon decided he would be better off buying than renting.
"It ultimately turned out to be something I thought was better constructed" than
the apartment building, said Keller, 32, who works in single-family home
development in the area. "And for the price I'd be paying, it would also be a
lot less per month than it would be to rent. I thought it would be only a matter
of time before it appreciated."
He and his new bride, Maria, 22, moved into a two-bedroom, two-bath, third-floor
condominium overlooking the forest preserve and walking paths in September. He
even helped persuade a friend to buy in the building.
"It was definitely a better value," he said. "It's very well built."
Prospective buyers can inspect condominiums for a few basic problems on their
own, Monat said. For instance, they can turn on taps and check water pressure,
examine appliances to ensure they're operational and in good condition, and open
and close all windows to check for smooth operation and no cracked or broken
Beyond these readily observable facets of a condo's condition, buyers should
turn to a qualified home inspector for a far more detailed scrutiny of the
For instance, in many condo conversions, builders will install thermopane
windows, Monat said. "But it's difficult for the average home buyer to spot a
broken seal in the window," he added. "A home inspector should be able to spot
Home inspectors also give the electrical system a thorough going-over. Some
older buildings feature obsolete 60-amp service running into the units, Monat
said. Inspectors can check to ensure there are no signs of overheating in the
main electrical panel.
"If there is burned insulation on the wires, that would indicate overheating,"
he explained. "I did an inspection of a brand new condominium building a couple
weeks ago, and found overfusing in the main panel, and two outlets that were
Many condo conversions suffer from potential electrical safety hazards, agrees
Nick Gromicko, chief executive of the Boulder, Colo.-based National Association
of Certified Home Inspectors. He has discovered outlets in kitchens and
bathrooms sometimes lack ground fault protection, and outlets in bedrooms often
lack arc fault protection.
Water leaks and resulting mold problems can also plague condo conversions.
Condos are more prone to water and mold problems than single-family homes for
several reasons, Gromicko said. First, water may be leaking into a unit from
another unit in the building and not be discovered until it does damage.
"A water leak in a tub above you is something you can't investigate," he said.
"You don't have complete access to all the water sources that can affect your
In addition, because they have fewer outside walls and frequently don't feature
forced air heating, condos don't benefit from the air exchange found in a
single-family house. Lack of air movement prevents evaporation of water leaks,
helping breed mold.
Heating systems also merit home inspectors' close attention, noted William
Decker, senior inspector with Skokie-based Decker Home Services and president of
the Chicago chapter of NACHI. In many of today's condo conversions, the
renovated units are each given their own furnaces, air conditioners and water
"The problem with sticking a furnace and a water heater into a little closet is
you don't have enough combustion," Decker said. "Both have flames, which require
oxygen, and where are they going to get oxygen? If they install the furnace and
water heater correctly, you'll see separate PVC lines for intake air and exhaust
"I have literally seen 80 condo conversions where they haven't installed the
furnace correctly," he said. "It will become very inefficient and the furnace
will die in half the time, or worse, the furnace will begin to produce carbon
Decker also warns buyers in buildings being converted from apartments to
condominiums to be watchful for an all too typical problem.
"The bait and switch with condo conversions in general, but particularly in
Chicago, is the developer getting the condominium association to take ownership
of the condo before the work is fully completed, and/or completed properly," he
said. "In that case, the condo association winds up buying the liability. That's
becoming commonplace now."
Home shoppers should hire home inspectors to examine converted condos before
purchasing. For what Monat estimates is an industry average of $250 to $300 per
inspection, it's money well spent, he said.
A reason that having an inspection is vital is that "sooner or later, every
component of a building will wear out," said home inspector Frank Lesh, of Home
Sweet Home Inspection Co., based in Indian Head Park.In Chicago, it is important
to look at the exterior stonework of a building, which can be very costly to
"The city has really clamped down on stonework, because there is a risk of
injury or death if it falls," he said.
Lesh said an inspector can tell a prospective buyer whether interior remodeling
has been done well.
"A lot depends on the quality of the contractor and the workers who did the
work," he said.
Additionally, get an inspector to look at the water heater that serves your unit
and the heating and air-conditioning systems that serve the building, Lesh said.
"If any of these systems break down, it can cost the owners plenty," he said.
Finally, he said, get the inspector to examine the roof. How old is it? Is it in
"When you own a unit, the repairs will be up to you and your fellow owners,"
Two currently proceeding condominium conversions whose developers report major
investments in building and property infrastructure are Deer Creek Condominiums
in Gurnee, and 12 Oaks in Schaumburg.
Deer Creek Condominiums features 198 units equally dispersed across three
24-year-old buildings featuring brick and concrete construction. The selection
of condos includes one- and two-bedroom units with one to 2 1/2 baths, ranging
from 750 to 1,050 square feet, said Steve Rubin, president of Oak Brook-based
Midwest Real Estate Equities Inc., the developer. Prices range from $104,900 to
Reporting "plumbing and electric were in great shape" in the former apartment
community, Rubin said his company has added new roofs, laundry rooms, lobbies
and lighting to the buildings. "We're on 33 acres, a much larger site than you
need for this many units," he said. "We're adjacent to wetlands and a forest
preserve that we can't build on, but that are great for bird watching. Then we
have a `Field of Your Dreams,' including a full-size baseball field, football
field, soccer field and basketball courts."
Two-bedroom units at Deer Creek Condominiums haven't been upgraded as part of
Midwest Real Estate Equities is providing a $10,000 incentive package to buyers
of two-bedroom units, allowing them to upgrade their condos or earmark the money
for assessments or closing costs. The money could also go to replacing in-unit
HVAC systems. The systems are operable, but are being replaced by buyers intent
on staying at Deer Creek long term, Rubin said.
In the northwest suburbs, 12 Oaks features 460 units across 10 different floor
plans, including manor homes and town homes as well as condominiums. Units
feature one and two bedrooms with 1, 1 1/2 and 2 bathrooms. Prices start at
$135,000 and range up to $270,000, said Nick Helmer Jr., managing member of B.B.
Schaumburg LLC, a condominium conversion marketing company in Schaumburg.
Noting "we got lucky," Helmer reports his company is converting an 18-year-old
complex whose buildings just five years ago received new roofs. Approximately 40
percent of the HVAC systems were replaced during the past three years, and B.B.
Schaumburg is in the process of replacing the balance. "Each unit has its own
hot-water heater," Helmer said. "One third were replaced over the last three
years, and we're replacing the other two-thirds. The suburbs have required
all-copper plumbing for many years, and that's all in good shape. Electrical is
in the same condition."
A big part of the conversion budget is being used outdoors, thanks to a $400,000
allocation for landscaping.
Improvements will include a redesigned pool area, the installation of 45- and
55-foot high fountains, the planting of an assortment of mature and smaller
trees and other new landscaping touches throughout the development and around
the two-acre lake adjoining the complex.
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