Mr. SCHWENGEL. Generally, the rule of thumb that we argued in Iowa, was that the per unit cost would be about one-half the cost of building a home.

And you have many in the present modern apartment buildings that are being built, many conveniences that you cannot have in an individual home.

Mr. MAKI. Right. Absolutely, because when you concentrate it into an apartment building you can put in, oh, disposals and air conditioning and all of these little things that make life for the tenants just a little bit better.

Mr. SCHWENGEL. And a swimming pool for the kids?

Mr. MAKI. A swimming pool, that is right.

Mr. SCHWENGEL. I am impressed with the development in Southwest. I think it is a great asset to this community.

I remember going through that area before those old buildings were torn down and, my, what a slum area it was. It was a disgrace. And this has been a fine transition, fine average cost apartments there now. I do not think they have any arrangement where they can individually own the apartments, but it is a wonderful development for the District.

Mr. MAKI. I believe there is one co-op unit down there, and I believe Tiberland is being built co-op, but this act can be passed, perhaps we can have condominiums down there, too.

Mr. SCHWENGEL. It will be something else besides "condominium”. I am beginning to learn what it is myself, but▬▬

Mr. HUDDLESTON. Well, we are going to move along unless you have further questions, Mr. Schwengel.

Mr. SCHWENGEL. No, go ahead. I am sorry to have taken so much time.

Mr. HUDDLESTON. Thank you, Mr. Maki.
(Mr. Maki's prepared statement follows:)

Re condominium act for the District of Columbia.
Hon. GEORGE HUDDLESTON, Jr.,

Chairman, Subcommittee, House District Committee,
Washington, D.C.

APRIL 30, 1963.

GENTLEMEN: H.R. 4276 of the 88th Congress is a revision of H.R. 12256 of the 87th Congress, revised to accommodate the technical comments of Housing and Home Finance Agency to the Hon. Alan Bible under said Agency's letter of October 19, 1962.

The bill is an adaptation of the condominium legislation enacted in

to conform the same as nearly as possible to the practice prevailing in the District of Columbia in real estate transfers.

The bill is essential to provide for separate real estate taxation of the individual units and to permit the creation of horizontal subdivision plats. While these primary purposes are being accomplished, the bill also contains detailed authority for the creation of a quasi-corporation to manage the building, to restrain partition, to provide means to levy, collect and enforce the lien for common expenses, to provide for separate release of the individual units from the liens of judgments or mechanics' liens, all to the end that the ownership of an individual unit will be as similar as possible to the incidents of ownership of an individual home.

The definitions of section 2 conform to the Arkansas act; the Virginia act and to the FHA model condominium act.

2(e) has been revised to conform to HHFA's technical comments of October 19, 1962.

2(f) (1) has been revised to require a leasehold condominium interest be separable.

2(h) has been revised to conform to HHFA's technical comments. 2(n) and 2(0) are taken from the FHA's model act.

Section 3 conforms this new concept of ownership to the prevailing District of Columbia custom of subdivision by plat rather than the use of filed floor plans. The legislation recently enacted in Utah and Maryland also follows this form. Sections 4 and 5 follow in form the previously enacted legislation in other States. Section 6 is from the 1962 act, revised in conformity HHFA's technical comments. The use of the word "may" in line 13 on page 8 has been agreed to by the HHFA and the FHA to the end that in FHA insured units, these items may be required and be a matter of choice in conventionally financed units. Also, as presently written, this section will not conflict with section 10.

Section 7, restrains judicial partition of the project while the same is subject to a horizontal property regime. This is an essential element to assure purchasers or lenders of the continued existence of the particular project in condominium form.

Section 8 is common to the legislation enacted in other States and designed to prevent one unit from becoming a hazard to other owners or to the public. Section 9 details the form to be used in the creation of a plat of condominium subdivision. It parallels existing District of Columbia Code provisions for land subdivisions, permits condominiums only upon duly subdivided lots in order that the unit dividing lines may be definitely fixed by the surveyor to established lot

lines.

In line 13, page 10 the words "bearing walls" appearing in the bill of 1962 have been eliminated and "unit dividing walls" substituted therefor, to conform to modern architectural techniques.

Section 10 provides for a short form of description of individual units to avoid metes and bounds descriptions of a cube to the end that the present short code form of deed may also be used in conveyance of condominium units.

Section 11 provides for termination of the regime. A method of judicial termination has been added to permit termination where the coowners neglect or refuse to act in a situation where a partially damaged or destroyed building may become a hazard to the public.

Section 12 providing for reconstitution is common to the legislation of the other States.

Sections 13, 14, and 15 provide for the management of the project and are similar to other legislation on the subject.

Sections 16, 17, and 18 provide for the levy and collection of a lien for common expenses. The last paragraphs of sections 17 and 18 have been revised to conform to HHFA technical comments.

Section 19 is a supplementary method to enforce the lien for common expenses, to provide for a quick method of enforcement in a form parallel to the District of Columbia method of foreclosures under deeds of trust.

Section 20 provides for insurance and follows the FHA model act.

Section 21 follows previously enacted legislation.

Section 22 has been revised to conform to HHFA technical comments.

Section 23 parallels existing District of Columbia Code provisions for assessment and taxation of real property and provides for separate taxation of the individual units. This fulfills an essential need.

Sections 24 and 25 provide for an orderly manner of litigation and enables individual owners to obtain separate releases of judgments or mechanics' liens. Section 25 now conforms to HHFA's technical comments following the FHA model act.

Section 26 is intended to prevent zoning regulations being used to thwart establishment of condominium subdivision, yet permit regulation by the Zoning Commission of the project when considered as an entity.

Section 27 is to supplement the existing code to the end that section by section revision will not be necessary to adapt the present code to this new concept and to give the horizontal property regime exemption, where necessary, from existing code provisions such as the rule against perpetuities. Section 28 is a standard severability provision.

W. V. MAKI,

(For the Real Property Law Subcommittee
of the District of Columbia Bar Association).

Mr. HUDDLESTON. The next witness is Joseph C. Murray, of the Washington Board of Realtors.

Will you come around please?

STATEMENT OF JOSEPH C. MURRAY, WASHINGTON BOARD OF REALTORS

Mr. HUDDLESTON. If you have a prepared statement, Mr. Murray, we would appreciate it if you would file that in the record and then subject yourself to a few questions by the members of the committee. Mr. MURRAY. This is a very brief statement, although it is somewhat repetitive.

(The statement follows:)

STATEMENT OF THE WASHINGTON BOARD OF REALTORS

Mr. Chairman, my name is Joseph C. Murray, vice chairman of the cooperative Housing Committee of the Washington Board of Realtors. I am here to represent the board and its more than 1,200 members to testify on behalf of H.R. 4276, a bill to provide for the creation of horizontal property regimes in the District of Columbia. This is the concept of apartment ownership known as condominium. This is a new and growing idea in the United States, giving purchasers of individual apartments legal title to the apartment in much the same way and to the same extent that they would buy a subdivision lot and home. This is new to the United States because no such estate in real property existed under the English common law, but the estate has long been established in other parts of the world having its origin in the ancient Grecian and Roman codes. In short it entails the subdividing of a building and each and every story thereof and placing the individual units on the land records in the same general manner that tracts of land are now divided into lots and the subdivision recorded. Although it is considered primarily for residential ownership, the condominium concept may also be adapted for office building or other commercial use. The rights of the individual owners and their obligations are spelled out in a master deed or lease in much the same manner as convenants are now imposed on land subdivisions. The floor plan of the building with proper legends are recorded in the manner of subdivision plats. Conveyancing of the individual apartments or units is accomplished by reference to these plans and the master deed. These apartments or units may be conveyed in the same manner that subdividsion lots are now conveyed, may be mortgaged individually, insured individually, and may be held in any type of estate as land is now conveyed and held.

This type of estate has now been established by law in Virginia, Maryland, Arkansas, Puerto Rico, Hawaii, and legislation is pending in a number of other States.

The financing of such individual units is approved by Congress for the insurance of such loans by the Federal Housing Administration and is only available where legislation exists. Legislation to create such estates has been relatively uniform in States where it has been enacted and where it has been introduced. The laws have been quite lengthy and carefully detailed; most of the provisions involve the spelling out of rights and protections to the individual purchasers while still maintaining the rights of others to liens of judgments, etc., against the individual

owners.

The principal advantage in this type of estate over the prevailing cooperative type of ownership is that each individual unit, standing in its individual ownership, is a separate and distinct entity separately financed or owned outright, separately insured and taxed, and is in no wise subservient to, or its owner subject to ouster by default of other coowners within the particular overall property. It encourages property ownership and is made available to persons of all income levels.

To our knowledge, the bill is noncontroversial and similar legislation has already been adopted by our neighboring States, Maryland and Virginia. We therefore recommend your favorable consideration.

Thank you.

Mr. HUDDLESTON. Briefly, Mr. Murray, what is the position of the Washington Board of Realtors on the bill?

Mr. MURRAY. Well, representing more than 1,200 of the members which is the membership of the board, we are very much in favor of it. We recommend its adoption, and I have outlined some of the reasons why, although much of it is repetitive of what previous witnesses have testified to.

Mr. HUDDLESTON. Did the Washington Board of Realtors participate in drafting of this legislation or was it submitted to representatives of the board for comments prior to the time that it was recommended to the Congress?

Mr. MURRAY. Yes, the cooperative housing committee did review it. Judge Munter, 1 think, did most of the work, of course, for the bar association on it.

We have just one detailed change to recommend, and that is in section 11. It would require that all of the coowners would be needed to terminate or waive the regime.

We feel that any one person, therefore, could hold it up, which we do not think would be very wise. We feel that it should be more like 75 percent instead of 100 percent.

Mr. HUDDLESTON. 75 percent of the coowners?
Mr. MURRAY. Could change the regime, yes.

We feel that any one person could have the other 99 percent held up really before he would sign over, and I think that would be unwise. Mr. SCHWENGEL. This question came up when we were considering this legislation in Iowa, and it seems to me that they agreed on 80 percent.

Mr. MURRAY. That sounds like a very fair figure.

We suggested 75 but

Mr. SCHWENGEL. I am not sure of that, however.

Mr. MURRAY. We think that gives it the necessary flexibility. It is almost impossible to get 100 percent of people to agree on anything today.

Mr. SCHWENGEL. If someone would die, you would have to wait until the estate was settled and somebody authorized to speak for the owner, and so forth; is that right?

Mr. MURRAY. That is right, and also when people are in mental institutions

Mr. SCHWENGEL. Mr Chairman, I think that is a very good suggestion.

Mr. HUDDLESTON. We will keep that in mind, Mr. Murray, and we appreciate your coming before the committee.

Mr. SCHWENGEL. As a real estate man, can you think of a better word than "condominium?"

Mr. MURRAY. I tried hard to think of one while you were asking the other witnesses.

I have come up with only one word and that would be outright "co-op" or something like that, to distinguish it from a "cooperative" as it has already been known.

I do agree that it is going to be confusing.

Mr. SCHWENGEL. And when you are advertising the sale of property you look for things in terms and phrases to get through to the people because you want them to look at your property.

You do not want them to just glance over it and be enamored by the glamor of the language.

You want them to be moved into action and to do that they have got to understand the advertisement?

Mr. MURRAY. That is right. We do not want to confuse them. I do not think any reputable real estate man wants to confuse his purchaser or his tenant.

I was very interested in hearing your comments, incidentally, on Southwest Washington because I have been involved in that since 1956.

Mr. SCHWENGEL. That is what needs to happen all over this District. That will do something for the crime, too.

There is no crime down there to speak of, by comparison with the crime that they had there.

Mr. MURRAY. That is true. There has been some criticism about the delays, but I think they have been very beneficial.

Mr. HUDDLESTON. Thank you, Mr. Murray.

Charles R. Richey, Esq.

STATEMENT OF CHARLES R. RICHEY, ESQ., WASHINGTON, D.C.

Mr. HUDDLESTON. I guess that "Esquire" means that you are an attorney, Mr. Richey?

Mr. RICHEY. Well, I guess so.

Is that right, Judge?

Mr. SCHWENGEL. What kind of an attorney do you have to be to get that title?

Mr. RICHEY. You have to be able to try divorce cases when Judge Munter was on the court here, and that entitles you to that title.

Mr. HUDDLESTON. Are you representing anyone here?

Mr. RICHEY. No. Several months ago, I had a client who was interested in acquiring a project and converting it to a condominium, over in Virginia, which he did not get.

As a result of that I became interested in the subject and have talked to several people, lawyers and builders and developers around the country, and accumulated quite a file.

I say to the committee that I spoke Saturday night to an alumni group down at the University of Richmond, and had a statement and a draft of some technical amendments, clarifying amendments, to the legislation, which were transferred from my briefcase to somebody else's car.

I ended up with his briefcase rather than my own. As a result, I do not have the statement with me. But I would like, if the Chairman please, just to make a few very brief observations, and one is that in the definition of a "condominium"; on page 2, you refer to the definition there of a "condominium project" as being five or more apartments or office units.

It would be my recommendation and suggestion that that be changed to provide for a condominium project with two or more units. I think that this probably comes from the FHA model act and requirements set forth in section 234 of the Housing Act, and the FHA regulations dealing with their opportunity to finance these Government-insured mortgages, and they would not do it unless there are five or more units.

The general counsel of the Equitable Life Insurance Co. of New York has written me, and he has indicated, and I certainly agree