Co-ops to Condos
This is in response to the Sept. 23 letter from Herbert H. Fisher regarding our article titled “Southland Hot Spot: Converting Co-Ops to Condos” (July 22).
Fisher’s letter contained the following incorrect statements regarding co-ops and their conversion to condominiums:
1--”Property taxes could be affected by a conversion.”
In California property taxes are unaffected by a conversion from a co-op to a condominium. Reassessment will apply only to units sold. The conversion itself does not trigger a reassessment.
2--”Community control over property is significantly altered.”
In California the laws, statutes and procedures governing the homeowners association control over comunity projects are the same for co-ops and condominiums.
3--”The individual owner now assumes personal mortgage liability as a condo owner, which the shareholder did not have as a cooperative.”
In most co-ops in California the shareholders already have individual loans on their co-op units along with the associated personal mortgage liability. This liability is the same as that of an owner of a condo with a mortgage.
In co-ops with one blanket loan for the entire project, each shareholder is personally responsible for payment of the entire loan amount throgh the association. If one co-op shareholder does not make his loan payment, then all the other owners must make up that amount, otherwise the lender can foreclose on the entire project.
In a condominium, the owner is responsible only for his own loan.
4--”They (co-op owners) have no desire to be part of a more expensive . . . form of mutual home ownership.”
It is not clear when Mr. Fisher uses the term “more expensive” if he is referring to the operating expense of the association or the value of the unit as a condo versus a co-op. The value of a co-op typically increases when it becomes a condo. The conversion almost never changes the operating expenses.
Fisher also states that financing is available for co-ops. This financing is very limited in California.
STEVEN J. SOLOMON, Redondo Beach. Solomon is president of Condominium Conversions Inc.
