Investor's  Frequently Asked Questions

What is a medical or professional office condominium?

Simply put, a condominium is a form of real estate ownership that allows multiple entities to own a portion of a larger building.  A medical or professional office condominium is created by filing a plat and condominium declaration which defines a space within the walls of a building as a unique parcel of property with its own tax identification number.  The owner investor owns a unit or units as they are defined in the declaration.  The owner also owns an undivided interest in the common areas of the building proportionate to the square footage of a unit in relationship to the total square footage of all the units in the condominium.  

Professional medical and office condominiums are primarily purchased by three types of owners:

1031 Exchange investors.
Real estate investors who want to lease out the unit to the occupant or other tenant.
Owner occupants who would rather own than rent their new or existing office suite.

Do professional office condominiums have a condominium association?

Yes, simultaneously with the recording of the condominium plat for a new or existing building, a condominium association is formed and a set of articles of incorporation for the association are recorded with the secretary of state.  This is very similar to formation of an association for a residential condominium project.  

The association is responsible for the management of the common elements of the condominium building such as the exterior (shell), interior common areas (hallways and lobbies) and exterior common areas (parking lots).  The association hires a management company to be responsible for the maintenance and care of the common areas, paying all bills related to the common areas and collecting association dues.  Each owner of a medical or professional office condominium has the right to vote on matters affecting the governance and operation of the association as set forth in the declaration for the condominium.  Associations typically meet annually to discuss the operations of the building.  You may attend these meetings or send a designee.  

As the owner of a professional office condominium what are my responsibilities to the current tenants?

When you purchase a condominium with an in-place lease, you are obligated to honor the terms and conditions of the present lease through its expiration.  Prior to purchasing the unit, you and your advisors will have the opportunity to review the in-place lease.

Who collects the rent from my professional office condominium?

As an owner, you are free to self manage your professional office condominium or choose a management company to handle all issues such as collecting rent, paying bills, handling maintenance requests and other tenant services.  Most often, owners choose the same management company that represents the condominium association; however, others designate a separate company for this purpose.  

Who leases my unit if it should become vacant?

Decisions on how and who leases your unit or units are controlled entirely by you, the owner.  You have several options in this regard.  If you hire a management company, a leasing agent from that company can usually provide leasing services.  If you hire the management company that manages the association they may be able provide this service or you may lease the unit yourself.