December 24, 2010

A Little Over (Half) For A Little Under (Half) At 873 Van Ness

873 Van Ness

Purchased as a 4,285 square foot two-unit Inner Mission building for $1,500,000 in July 2006, a little over half the building (2,337 square feet) is back on the market today, remodeled and asking $729,000 as a tenancy in common (TIC).

And while the listing touts "EZ CONDO READY!!," understand how the "bonus/entertainment room w/ kitchen+bath included with the unit" could affect the not always so EZ conversion process.

∙ Listing: 873 South Van Ness (2/1) 2,337 sqft - $729,000 [MLS]

First Published: December 24, 2010 9:45 AM

Comments from "Plugged In" Readers

as the editor comments, that psuedo-inlaw could make condo converting a lottery instead of a bypass affair, but only after things end up messy.

In-Law units count as a separate unit for lottery purposes, but what if said in-law does not have a separate entrance, effectively making an occupying tenant a boarder, not a renter? Would probably come down to how frequently the tenant used the additional kitchen, as shared common space is what they use to distinguish for rent-control and protection status, IIRC.

Posted by: rr at December 24, 2010 11:30 AM

something about that sq.ftg. seems off to me. a 2300+sq.ft. flat with only 5 rooms?

is the in-law occupied? if not then the city knows this as two units and they do not care about the 'bonus space' as long as it meets basic habitability criteria. worst case you remove the plumbing fixtures and voila- deeded storage space!

Posted by: anonee at December 24, 2010 12:45 PM

I'm assuming they are counting the square footage in the bonus space, which would probably need to become "storage space" in the condo conversion. But could, of course, be converted back to usable space after the condo conversion.

Posted by: curmudgeon at December 24, 2010 12:57 PM

i think you are right. so i guess the real issue here is whether there is a tenant or not.

Posted by: anonee at December 24, 2010 1:03 PM

I thought buildings under 4 units didn't have to enter the lottery?

Posted by: MarinaBoy at December 24, 2010 2:51 PM

Three units or more enter the lottery. Unpermitted living space is a no-no in conversion. Worst case scenario you don't just remove the fixtures...you have to cement the plumbing!

Posted by: Michael at December 24, 2010 4:38 PM

if there is no tenant living there then the inspector does not 'classify this as a 3 unit'.
they go by the 3r report. so the buyer gets the flat and the 'bonus space' to use as he/she wishes.
i've never seen anyone turn down bonus space.
i've also rarely seen brokers counting the 'bonus space' as part of the official sq.ftg. so this seems strange.

wonder if the broker reads the site and cares to comment?

Posted by: anonee at December 26, 2010 8:54 AM

The owners tried selling this unit about 2 years ago but the deal was sunk by the downstairs neighbors which are **difficult** and practically insolvent, thus cannot get a loan or afford any alterations that may be required in order to condo convert. The takeaway: Big, beautiful unit with great bonus in-law but the downstairs neighbors make this one to avoid.

Posted by: killbotkondo at December 28, 2010 2:53 PM

In light of killbotkondo's comment, if anyone on this site knows the sellers or their broker, please advise them to contact an experienced real estate lawyer regarding the common law remedy of "partition."

Partition is an unconditional right of tenants in common to split up the property--dividing it in kind, or forcing a sale of the whole and division of the proceeds--in the event that one tenant "wants out" of the TIC arangement. The right of partition can be limited by contract, but only to a limited ("reasonable") degree. The TIC agreement in place here may well limit the right of partition--for example, by requiring the co-owner to make a good faith effort to sell his fractional interest before invoking the partition right. But if the limitation is severe, it may well be deemed unenforceable by a court.

The situation described by killbotkondo is exactly why the partition right exists. The co-ownership arrangement has broken down, and the co-tenant who wishes to remain in possession is so patently unattractive as a partner that no one in his or her right mind will buy the seller's fractional interest (except at a severe discount). The right of partition preserves the value of the seller's interest, and ensures that the property can be put to good use, by enabling the seller terminate ownership of the property by co-tenancy rather than simply divesting his or her fractional interest.

(The forgoing should not be treated as legal advice. Thank you.)

Posted by: observantneighbor at December 28, 2010 9:04 PM

The sale of 873 Van Ness Avenue closed escrow today with a reported contract price of $720,000.

Posted by: SocketSite at March 22, 2011 4:16 PM

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