Chicago has become the country's most active condo deconversion market. Since around 2016, dozens of Chicago condominium buildings have been deconverted — meaning the entire condominium was sold as a single asset to an investor who operates the building as rental apartments. Under 765 ILCS 605/15 of the Illinois Condominium Property Act, a deconversion requires approval of 75 percent of owners (or higher, depending on what the declaration specifies). Successful deconversions force minority owners to sell at the deconversion price.

For an individual condo buyer in Chicago, the structural minority-position risk is a distinctive Illinois consideration that does not exist in most other states. It belongs in the diligence package.

How Section 15 actually works

The Illinois Condominium Property Act §15 governs the sale of the entire condominium as a unit. The statutory framework:

1. A buyer (typically an investor) proposes to acquire the entire condominium at a stated price.
2. The owners vote on the proposal. Under §15(a)(1), 75 percent of unit owners must approve — unless the declaration specifies a higher threshold (some require 80, 85, or 90 percent).
3. If approved, all owners must sell at their pro-rata share of the deconversion price.
4. Minority owners can dispute the price by demanding an appraisal, which the statute requires reflect "fair market value" of the unit.
5. The transaction closes and the condominium dissolves; the buyer takes the building as a single owner.

The minority owner's only meaningful protection is the appraisal mechanism. The minority cannot block the transaction.

Why Chicago became the deconversion capital

Several factors converged in Chicago that have not occurred in the same combination elsewhere:

• A large inventory of 1980s–1990s mid-rise and high-rise condos
• Strong rental demand in downtown and inner-ring neighborhoods
• An investor environment where bulk-purchase pricing routinely exceeded individual-condo pricing
• A statutory framework (Section 15) that made deconversion procedurally tractable
• Declaration thresholds (often the 75-percent statutory default) that made approvals achievable

The result was a sustained wave of deconversions. Buildings that traded at one set of valuations were assembled into rental portfolios at materially different valuations.

Reading the documents for deconversion exposure

Several specific items:

The declaration's Section 15 vote threshold. This is the most important number for deconversion risk. The default is 75 percent. Some well-drafted declarations require 80, 85, or 90 percent — substantially harder to achieve. A few require unanimity for certain decisions. Read the specific provision.

The current owner mix. Investor-heavy buildings have higher deconversion exposure because investors are generally more receptive to bulk-sale proposals. Owner-occupant-heavy buildings tend to resist deconversion. Request the owner-occupancy ratio.

Building age and condition. Older buildings with substantial deferred maintenance are more attractive deconversion targets. A building facing $5 million in upcoming capital programs but lacking the reserves to fund them is a prime candidate.

Recent deconversion activity in the immediate area. If similar buildings nearby have deconverted, the investor framework is established and your building may face similar approaches.

Board minutes and owner communications. Active deconversion exploration shows up in minutes. Look for any board discussion of unsolicited offers, deconversion analyses, or owner inquiries about Section 15.

What an offer-and-vote process looks like in practice

A deconversion proposal typically unfolds over 6–18 months:

1. Investor approaches the board (sometimes directly to owners)
2. Initial price proposal and feasibility analysis
3. Board commissions independent appraisal and legal review
4. Owners receive disclosure package and vote
5. If approved, sales contract executed and closing scheduled
6. Minority owners may demand appraisal; disputed prices resolved
7. Building closes as a single transaction; condominium dissolves

For a buyer holding through this process, the experience is procedurally formal but substantively determined by the vote outcome. Minority owners get the appraised price; majority owners get the negotiated price.

What buyers can do about it

Three practical responses:

Buy in buildings with strong anti-deconversion provisions. Declarations requiring 80–90 percent approval (or supermajorities plus minimum-time provisions) materially reduce deconversion probability.

Buy in owner-occupant-heavy buildings. Resident owners typically resist deconversion. Investor-heavy buildings are more vulnerable.

Understand the appraisal floor. If deconversion does occur, the statute requires fair market value. Your downside is bounded by appraised value, not by the deconversion price itself.

For a buyer planning to hold for 5+ years in a Chicago condominium, deconversion exposure should be part of the diligence package — alongside FISP compliance, reserve adequacy, and standard capital-program review.

What CondoSignal surfaces

We pull the declaration's Section 15 vote threshold, owner-occupancy ratio (when disclosed), recent board minutes for deconversion-related activity, building age and capital-program history, and known deconversion activity in the immediate market into a single risk summary. We flag buildings with the 75-percent default threshold (versus higher), heavily-investor mixes, and active deconversion discussion in minutes. The goal is to give Chicago buyers a clear read on a uniquely Illinois exposure that the standard Section 22.1 resale certificate does not address.