Expert: Sue Bernstein - 8/4/2004

Question
My wife and I are planning to buy a 2 unit house with another couple in San Francisco.  If the house is not condominium yet, we plan to convert it after we bought it.  My understanding is that we should not have problem to convert it since each couple will take 1 unit.  Since the house will have upper and lower unit and may have a studio, how can I split the ownership to be 50-50?  I'm thinking about taking the upper unit but I know it is usually worth more so there may need some arrangement.  What do you suggest?  Can the other couple use the house as collateral without our signature?  
We already own another house by ourselves and we plan to keep it and move to the new house.

Answer
Dear Peter,

Once the property is converted to 2 separate condos the other couple can encumber their unit without involving you.  You really need to talk to an attorney for all aspects of creating the conversion as it is beyond a realtor's expertise.
You and the other couple should decide whether the split is 50-50 or any other arrangement as there is no hard and fast rule.  You probably need to make sure that both sides have enough money to pay for all costs involved in the conversion to condos.

I hoppe this helps and good luck.

Sue Bernstein