Guide to Selling a Condemned Apartment Complex in Texas

It’s honestly scary when the city slaps a red tag on your building. One minute you’re collecting rent, and the next you’ve got an official condemnation notice telling you everyone needs to vacate. Your income will stop immediately, but your mortgage payments and property taxes sure don’t.

Note, though, that condemned doesn’t mean you’re completely stuck. There are buyers out there who actually want properties like yours. You can either put money into fixing the violations or sell it as-is and move on. Check out this whole guide to learn more!

If you’d rather skip the repairs and the stress, contact us for a no-obligation cash offer—we’ll review your property as-is and help you move forward quickly.

What Does It Mean When a Property Is Condemned?

Condemnation means the local government has officially declared your property unsafe for occupancy. The city or county has found violations serious enough that people can’t legally live there. You still own it, you’re just not allowed to rent units or have anyone occupy the building until the issues get resolved.

The government posts notices on the building and sends you documentation that outlines the issues. They’ll clear out any remaining tenants and restrict access to the property.

This differs from eminent domain, where the government actually takes your land. With condemnation, ownership stays with you. However, the property sits empty until you either fix it or sell it to someone else.

What Are the Typical Reasons for Condemnation in Texas

Cities in Texas condemn apartment buildings when they find serious problems that pose a risk to people. The violations usually fall into a few main categories that inspectors focus on during their assessments.

Structural Damage and Safety Hazards

Foundation issues are prevalent in Texas due to the soil’s tendency to shift significantly. When foundations crack and shift, everything above them also begins to fail. Walls separate, floors slope, and doors won’t close properly.

Roofs that have leaked for years can ultimately damage the structural supports underneath. Balconies with rotted wood or rusted railings are basically accidents waiting to happen. Inspectors will shut those down immediately.

Code Violations and Lack of Maintenance

Electrical systems that are thirty or forty years old typically don’t meet current codes and pose significant fire hazards. Plumbing issues that occur throughout the building, such as sewer lines backing up or the water supply becoming contaminated, affect every tenant and are promptly addressed.

HVAC systems matter, too, especially when people don’t have working heat during cold snaps or air conditioning when it’s 105 degrees outside.

Health and Sanitation Issues

Mold growth that has taken over multiple units signals larger moisture problems that have been ignored for too long. Black mold and other toxic varieties can actually make people sick, so cities shut down buildings when they get out of control.

Severe pest infestations, where rats or roaches have essentially taken up permanent residence, will also trigger condemnation. Sewage problems are likely the fastest way to get red-tagged, as raw sewage constitutes a health emergency.

Fire Code Violations

Those blocked or missing fire exits are a significant concern in multi-family properties, where a single fire could potentially trap dozens of people. Additionally, sprinkler systems that are not functioning or were never installed in buildings where the code requires them will result in condemnation.

Some other things that inspectors won’t overlook include broken smoke detectors throughout the property, fire alarms that haven’t functioned in ages, and fire doors that have been propped open.

What’s The Condemnation Process in Texas

Cities don’t just wake up one day and slap a red tag on your building. There’s usually a sequence of events that leads up to it.

Phase 1: Initial inspection and violation notice

A code enforcement officer or building inspector visits your property, either because of a complaint or a routine inspection. They document the violations and send you a condemnation notice listing all the issues. This initial notice typically provides a deadline to address the problems.

Phase 2: Follow-up inspection

If you don’t address the violations by the deadline, inspectors will come back to check. They’re looking to see if you’ve made any progress or if the situation has gotten worse.

Phase 3: Formal condemnation hearing

The city schedules a hearing where it presents its case for why your property should be condemned. You get a chance to respond, present evidence, or explain your plan to fix things. This is your opportunity to contest the condemnation if you think it’s unfair.

Phase 4: Condemnation order issued

If the city moves forward with condemnation, it issues an official order. This document spells out exactly what’s wrong with the property and what needs to happen next. They post notices on the building itself and file the order with the county.

Phase 5: Tenant evacuation

Once the condemnation order is official, all remaining tenants must vacate the premises. The city enforces this. They won’t let people stay in a condemned building even if those tenants want to.

Phase 6: Compliance deadline

The condemnation order includes a deadline for you to either fix the violations or take other action. If you miss this deadline, the city may proceed with demolition or other enforcement actions.

Some orders provide 30 days, while others offer 90 days or more, depending on the severity of the violations.

Texas Eminent Domain vs. Condemnation: What’s the Difference?

People often confuse eminent domain and condemnation, but they’re two entirely different situations.

As we’ve shared earlier, condemnation means that the city has declared your property unsafe due to code violations or structural problems. You still own it, but you can’t use it until you fix the issues.

Eminent domain is when the government actually forces you to sell your property because they need the land for something like a highway or school. They have to pay you fair market value.

With regular condemnation, the city isn’t trying to take your property. They’re just telling you it’s too dangerous for people to live there, and you need to handle it. With eminent domain, the government is literally forcing the sale, whether you like it or not, because they need your land for public use.

How Condemnation Affects Your Tenants

Condemnation really affects your tenants hard because they have to leave right away, with basically no warning. The city kicks everyone out immediately, and all these people need to find new places to live.

Your tenants can break their lease without any penalties because the property became uninhabitable through no fault of theirs. They get their security deposits back, and they don’t owe you rent for any time after the condemnation happened. Some tenants might qualify for relocation assistance, depending on local laws and the circumstances surrounding the condemnation.

You must return security deposits, as Texas law typically allows you about 30 days to do so. You also need to provide them with last month’s rent or any other deposits they paid, minus any actual damages that existed before the condemnation.

Send them a written notice explaining the condemnation and confirming that their leases have been terminated. Put the lease terminations in writing, specifying the official condemnation date and clearly stating that this is due to government action, not any wrongdoing on the part of the tenant. Document everything to avoid tenant disputes over this stuff.

What Are Your Rights as the Property Owner?

You still have rights even after your property is condemned. The Texas Property Code safeguards property owners from arbitrary decisions, and the city must adhere to proper procedures at every step.

You can appeal the condemnation if you believe the assessment is incorrect or if the alleged violations do not actually exist. Most cities have an appeals process through their municipal court or a local appeals board, but you need to act quickly because these deadlines are usually quite tight.

You also have the right to make repairs and bring the property back into compliance. The condemnation order clearly outlines what needs to be fixed. Once you complete the work, you request a re-inspection. If everything checks out, the city lifts the condemnation.

Some owners go this route to preserve their investment. Others look at the repair bill and decide selling is the more brilliant financial move.

Steps to Sell a Condemned Apartment Complex in Texas

Selling a condemned property takes some planning, but it’s possible when you break it into manageable chunks. Think of it like building a case for why someone should take this property off your hands.

Step 1: Review the Condemnation Notice

That condemnation notice isn’t just paperwork to file away. It gives you an idea of what’s to come next.

The city listed every violation they found, and you need to understand each one. Foundation problems cost tens of thousands to fix. Updating smoke detectors costs a few hundred bucks. Knowing the difference helps you determine whether repairs are even worth considering or if you should sell as-is and be done with it.

Pay attention to the deadlines, too, because those are serious. The city gave you a specific window to either rectify the situation or take action. If you blow past those dates, they can start demolition proceedings without you.

Set calendar reminders for every single deadline so you don’t accidentally make your situation worse by missing something important.

Step 2: Assess Your Property’s Current Condition

Hire your own inspector, even though the city has already done so. Their inspection focused on code violations, but a private inspector gives you the whole story of what’s actually broken.

You need a private inspection to price your property accurately and to answer the numerous questions buyers will ask before committing to a purchase.

Walk the property yourself if the city lets you in. Take photos and videos of every problem spot you can find. Buyers want to see exactly what they’re buying. Having all this documentation ready makes you look organized and honest. That actually matters when you’re trying to sell a condemned building. Trust goes a long way in these deals.

Step 3: Understand the Market Value of Your Condemned House

Your condemned apartment complex is worth way less than what it would sell for in good condition. That’s just how it is. The value is primarily in the land and its location. The building itself might actually have negative value if a buyer has to pay for demolition before they can do anything with the property. If you’re trying to sell your apartment for cash in Texas, it’s essential to understand this reality.

Check out what other distressed properties sold for recently in your area. Real estate agents who work with investors can pull these comps for you, or you can look into sold listings yourself.

Buyers are going to calculate how much repairs or demo will cost them, so you should run those exact numbers. You need to price it realistically from the start, rather than being stubborn about what you think it should be worth.

Step 4: Gather All Property Documentation

Next, gather every piece of paper you’ve got related to this property. The condemnation notice, all the letters from the city, inspection reports, any repair estimates you got, and receipts for work you already did.

You also need your deed, property survey, tax records, and documentation of any liens or other claims against the property.

Buyers want to see this stuff immediately. The faster you hand it over, the faster your deal moves forward. Missing documents can make buyers nervous and slow down the process. Get it all in one folder now, so when someone’s ready to make an offer, you won’t have to hunt through boxes trying to find the one form they need.

Step 5: Determine Your Selling Strategy

You have two options when selling a condemned apartment complex: fix the place up or dump it as-is. Fixing it means you’ll get more money and have more potential buyers. However, you’re also investing cash in repairs with no guarantee that you’ll recoup your investment.

Meanwhile, selling as-is allows you to get out quickly without the need for repairs. You’re taking less money and limiting yourself to buyers who can deal with condemned properties.

Your bank account makes this decision clear. If you have the funds to cover major repairs and the patience to see it through, perhaps fixing makes sense. If you’re already maxed out or just want to be done with this headache, selling as-is is probably where you’re headed. Neither choice is wrong. It just depends on what you can actually handle at the moment.

Step 6: Decide Between Repair and Remediate or Sell As-Is

Get actual repair quotes from contractors who’ve worked on condemned buildings before. You don’t need estimates. You need real numbers on what it’ll cost to fix everything the city flagged.

Add it all up, then determine what the property would sell for after repairs compared to its current market value. Sometimes the math makes the decision obvious.

Time costs money, too. Repairs on condemned properties can take months to complete, especially when involving foundation work or mold remediation. You’re still paying property taxes, insurance, and maybe a mortgage every month you own this thing. Selling as-is might net you less on paper, but when you factor in all those carrying costs, sometimes it’s actually the better move.

Repair and Remediate: Is It Worth It?

Fixing a condemned property sounds like the responsible move until you start calling contractors and hearing what it’ll actually cost. The numbers get really ugly in reality. Most things are technically fixable if you throw enough money at them, but that doesn’t mean fixing makes sense for your situation.

Cost Analysis of Repairs

Call at least three contractors who’ve actually dealt with condemned buildings before. Regular contractors sometimes quote you low because they don’t really get what they’re signing up for.

Foundation work in Texas runs anywhere from $20,000 to $100,000, depending on how screwed up it is. Mold remediation for multiple units can easily cost $30,000 or more.

Add electrical upgrades, roof replacement, plumbing overhauls, and it stacks up so fast your head spins. You need actual quotes, not somebody’s best guess over the phone.

Timeline Considerations

Money isn’t even the only issue. Time kills you, too. Permits can take a considerable amount of time to get approved, and you typically need them for almost everything. City inspectors must visit at various stages to sign off on the work, and if something fails inspection, you have to start over.

Major structural repairs on a condemned building can take anywhere from six months to a year before anyone can legally reside there again. That’s a long time to own a property that’s making you zero dollars while costing you thousands every month in taxes and insurance.

Working with Contractors and Inspectors

Good luck finding contractors who are willing to work on a property that has been condemned. Many will simply pass because it’s too much hassle, or they don’t want to take on the liability. The ones who do this work know they’re your only option, so they charge accordingly.

You’ll also have city inspectors inspecting everything, as they need to verify that everything meets the code. One failed inspection can throw your entire schedule off and cost you more money when the contractor has to tear out and redo the work.

Selling a Condemned Apartment Complex in Texas As-Is

Selling as-is means you’re done. No more contractor calls, no more inspections, no more dumping money into a building that might never break even. You hand over the keys in whatever condition the property is in at the time, and the buyer is responsible for addressing any issues that may arise.

You’ll make less money than if you fixed everything, but sometimes getting out clean is worth more than getting top dollar out of a bad situation.

If you’re ready to walk away without the hassle, Commercial Property Offer can make you a straightforward, as-is cash offer and take the property precisely as it stands—no repairs, no inspections, no delays.

Disclosure Requirements in Texas

Texas is strict about disclosures. That means with condemned properties, you have to disclose everything to buyers. The condemnation itself, every violation the city found, and any other problems you know about. Everything must be disclosed.

This isn’t negotiable; it’s the law. Buyers looking at condemned properties expect the worst anyway. Being honest up front actually makes you look better, not worse.

Set a Realistic Price

Pricing a condemned building is weird because you can’t just look at what similar apartments sold for last month. You’re basically a land of sales with a problem sitting on it.

You need to determine what empty land costs in your area, then deduct some if the buyer has to pay for demolition. Maybe they can salvage parts of the building; perhaps they can’t. Don’t price it as if they will, because that’s setting yourself up for disappointment.

Market Your Condemned Property

Avoid regular real estate sites where typical buyers are searching for their next investment. You need to find investors and cash buyers who specifically want distressed properties.

Hit up real estate investor meetups, online forums, and wholesaler networks. Basically, all the places where people are actively hunting for deals like yours. Some sellers use agents who specialize in investment properties because those agents already know buyers who want exactly what you’re selling.

Who Buys Condemned Properties in Texas?

You’d be surprised how many people are actively looking for condemned properties. They’re not your typical homebuyers, but they’re serious about what they do, and they’ve got cash ready to go.

Real Estate Investors

Real estate investors love condemned properties because most people are reluctant to compete with them for the deal. They’re looking at the numbers differently than you are. They calculate what it’ll cost to fix everything, what they can rent or sell it for afterward, and whether the profit margin works.

Some of them flip properties for a living and do this daily. They’ve already lined up contractor relationships, are familiar with the permit process, and move quickly because time is money in their business.

Developers Looking for Redevelopment Opportunities

Developers aren’t necessarily interested in your building. They want your land. If your condemned apartment complex sits in an area that’s growing or gentrifying, developers see it as a blank slate. They’ll tear down what’s there and build something new that fits current market demand.

Location also matters way more than the condition of your building when you’re dealing with developers. They’re thinking five or ten years down the road about what that neighborhood will look like.

Cash Buyers Who Specialize in Distressed Properties

Cash buyers who focus on distressed real estate are probably your fastest path to closing. They buy condemned properties all the time, so nothing about your situation fazes them—they’ve seen worse. These buyers can close in a week or two because they’re not messing around with bank financing or appraisals.

They make you an offer based on what they think they can do with the property. If you accept, the deal moves incredibly fast compared to traditional sales.

Frequently Asked Questions:

Can you sell a condemned property in Texas?

Yes, you can sell a condemned property in Texas. You still own it, so you’ve got every right to sell it. The buyer pool is smaller because most traditional buyers and their lenders are reluctant to touch condemned buildings. Still, investors and cash buyers who specialize in distressed properties often purchase them frequently.

How much is a condemned apartment complex worth?

A condemned apartment complex is worth way less than it would be in good condition. It’s usually close to land value or sometimes even less if demolition costs are high. The exact amount depends on your location and the severity of the violations. It also matters whether any part of the structure is salvageable. Get some comps on raw land in your area and work backward from there.

Do I have to fix my condemned property before selling it?

Not at all. Plenty of people sell condemned properties as-is without making any repairs. Cash buyers and investors often prefer to purchase properties in their current condition because they have their own contractors and want to control the renovation process themselves. Selling as-is is faster and eliminates the risk of investing money in repairs that may not be recouped.

How long does it take to sell a condemned apartment complex?

If you’re selling as-is to a cash buyer, you can close in as little as one to two weeks. If you decide to make repairs first and then sell through traditional channels, you’re looking at six months to over a year just for the repair work, plus however long it takes to find a buyer after that.

What happens if I don’t sell or fix my condemned property?

The city can eventually move forward with demolition and bill you for the costs. They might also place a lien on your property for unpaid fines or demolition expenses. Some municipalities can even take legal action to compel the sale of the property if it remains condemned for an excessive period. Those deadlines in your condemnation notice are serious.

Will I owe taxes on the sale of my condemned property?

That depends on your specific situation, including whether you’re selling at a gain or loss, how long you’ve owned it, and other relevant factors. Talk to a tax professional about your circumstances because tax implications vary. Some owners actually take a loss on condemned property sales, which can have different tax treatments than profitable sales.

Key Takeaways: How to Sell an Apartment Complex That Is Condemned in Texas

A condemned apartment complex in Texas isn’t the end of the road; it’s just a different kind of sale. The most significant decision you’re facing is whether to sink money into repairs or sell as-is and be done with it. Both paths work, but one gets you out quickly, while the other ties up your time and money for months with no guarantee that the numbers will work out in your favor. Watch those deadlines in your condemnation notice because the city won’t wait around forever. Missing them just makes everything more complicated.

If you want to skip the repair headaches and sell your condemned property fast, Commercial Property Offer buys distressed apartment buildings throughout Texas. We close in as little as a week, and you don’t have to fix a single thing. Call us at (855) 806-3337 for a no-obligation cash offer, and let’s discuss your property.