Condominium conversion and unit sales: legal preparation before selling units

Converting an apartment building and selling individual units changes more than its marketing. A single property becomes a structure of condominium units, co-ownership shares, common parts and an owners’ association. Existing leases continue and must be allocated to the correct future units. Every sale depends on the building file, actual stock, valuation report, condominium agreement, land register instruments and buyer records describing the same structure.

Legal preparation is therefore staged. First the approved and actual building are checked. Unit formation and values follow, then the future association is organised, rented units are documented and a consistent sales package is assembled. A prospective buyer should make a binding commitment only when responsibilities, cost and open matters are transparent. This article explains the sequence and separates the detailed specialist reviews.

Define the project objective, units and sales sequence

The first decision identifies which apartments, shops and parking spaces will be sold as units and which areas remain common. The project should also state whether all units are sold, sales proceed gradually or a mixed long term holding remains. That choice affects management, finance, renovation and buyer profile. It should precede the valuation report because intended dedication forms part of the ownership structure.

A project matrix connects each future unit with its plan, use, lease status, appurtenances, intended sale and open tasks. It prevents technical, legal and commercial lists from diverging. The condominium conversion and unit sales topic page provides the overview. This process article focuses on the sequence to a reliable individual sale.

Use the building file and actual stock as one basis

Before conversion, the land register, building file, approved plans and actual building are compared. Different layouts, later bathrooms, combined shops, attic works and changed uses can affect unit formation. A new survey does not regularise missing permission. Conversely, a historical label should not determine current use and future dedication without review.

The output is an approved building basis with identified open points. It states which discrepancy will be corrected before valuation or sale and which may be addressed transparently as a project condition. The data room completeness check supports the record structure. Building law, leases and intended ownership boundaries are then assessed together.

Form eligible units and values consistently

Section 2 WEG 2002 defines eligible units, appurtenances and common parts. Section 3 requires the scheme to cover all eligible objects intended as units and excludes condominium ownership over common parts. For registration, section 6 requires the establishing instrument, evidence of eligible objects and the valuation report among its core documents.

Sections 7 and 8 derive condominium value from floor area and relevant additions or deductions. The report is not a sale price but a basis for minimum shares. Ancillary areas and shared access need clear treatment before commissioning. The dedicated article on the condominium valuation report covers discrepancies and later correction.

Prepare the condominium agreement and registration package

The condominium agreement connects the unit schedule and values with future administration. It addresses use arrangements, expense issues and organisational matters to the extent legally available. Common parts cannot become appurtenances by wording alone. Mandatory WEG rules remain relevant to alterations, resolutions, management and expenses.

Registration instruments and required consents are prepared in parallel. Existing charges, mortgages and project finance must be adapted to the future shares. The article on the condominium agreement after conversion covers management, reserve and special use. A document matrix should confirm identical labels before filing.

Allocate existing leases to the future units

Conversion does not end leases. Section 2(1) MRG binds successors to valid main leases; once condominium ownership is established, the landlord position for the premises passes to its condominium owner. Each future unit should therefore be matched with the lease, amendments, deposit, payments and actual use.

Cellars, gardens or parking included in a lease can be particularly sensitive if the conversion plan allocates them elsewhere. Unusual side agreements also require disclosure. The article on selling rented units after conversion explains buyer information and value. The project needs a separate tenancy sheet for every unit.

Organise renovation and cost before the first sales statement

Maintenance, improvements and contracted work should be separated by project phase. A single owner does not yet use WEG resolutions. After condominium ownership, sections 24, 28 and 29 govern decision making and measures, with reserve and expense allocation under sections 31 and 32.

Buyers need a status matrix recording measure, resolution, contract, cost, finance, timing and responsibility after closing. The article on renovation before unit sales develops that distinction. A contract should neither describe planned work as complete nor leave responsibility for outstanding defects unclear.

Create one controlled sale package for each unit

The package includes land register information, plan, valuation records, condominium agreement, energy certificate, tenancy sheet, cost summary, management records and a unit specific contract draft. Attachments should be version controlled. Marketing and data room must not promise characteristics that the contract or plan cannot support.

A release checklist reviews the unit name, appurtenances, use rights, lease, price assumptions, reserve, ongoing expenses, renovation, handover and known discrepancies. The apartment building risk check can supplement the overall view. Release always relates to a particular document version; later changes trigger another comparison.

Account for applicant protection and payment structure

A project that organises and promises condominium ownership must consider special WEG safeguards. Section 40 provides for noting the grant of condominium ownership in the land register. Section 37 protects payments before that notation. Whether additional safeguards such as BTVG apply depends on the specific contract and project and should be resolved before issuing the first payment schedule.

The sales process must examine reservation, offer, payment schedule, escrow and registration together. Reservations or unfair restrictions may also fail under section 38 WEG 2002. A standard distribution process is useful only when it rests on the reviewed property structure and its statutory safeguards.

Plan handover and management launch in advance

The first transfer starts the practical multi-owner structure. Accounts, insurance, maintenance contracts, resolutions, reserve and running work must move into association management. At the same time, a buyer of a rented unit becomes the landlord. The two levels need separate tasks and coordinated contact information.

The sale contract allocates benefits, burdens, rents, deposits, open invoices, defects and records at the effective date. The handover and effective date topic page explains the wider process. Early preparation prevents a buyer entering the land register while management, rent payments and project records still point only to the former single owner.

Use a binding quality gate for every unit sale

The quality gate confirms that building basis, valuation, agreement, register position, lease file, expenses and buyer records are consistent for the specific unit. Open matters are assigned to a responsible person, target step and contract consequence. A binding buyer commitment is prepared after material gaps have been resolved or transparently structured.

This discipline protects both sides and prevents one template error from being repeated across many contracts. Specialist work remains focused where needed: valuation, rented unit, renovation or condominium agreement. The overall process combines those results without duplicating their detailed analysis.