Even though the most recent condominium conversion craze has slowed, many Chicago renters are still at risk for losing their leases.

When the real estate market boomed a few years ago, many developers started buying apartment buildings and converting them to condominiums. The high demand for real estate meant that selling units was more profitable than renting them. The surge of 2004-06 was the latest in a pattern of condo conversions dating back to the 1970s.

As the market for real estate has slowed so has the conversion trend. The trend peaked last year, according to John Bartlett, executive director at the Metropolitan Tenants Organization, which helps tenants learn their rights in scenarios like condo conversions. But, he said, "It's still a problem."

In February 2006, Zakiyya Muhammad found a memo on the door of her Bronzeville apartment saying the building was sold and she should attend a meeting at the local church.  Muhammad said residents were then asked if they intended to buy.

Many of the residents were Section 8 (subsidized housing) tenants and could not afford to purchase their apartments. Eventually, their leases were renewed with a clause requiring them to move within 90 days if someone wanted to buy their space, Muhammad said. She added that renters paying market rate were allowed to stay without the 90-day moving stipulation.

With the real estate downturn, even former hot-spots are experiencing a housing lag. Muhammad said the first building in her complex to convert to condominiums has been experiencing slow sales. Her building is now part of a rent-to-buy program where residents rent for six to eight months with the option of buying and having their payments transferred to a mortgage.

"Not all buildings lend themselves to be conversions," said George Carlson, president of Conversion Specialist Incorporated, a condominium conversion firm that works in Chicago's suburbs. Muhammad said that her building has an assortment of problems including bad plumbing.

Carlson explained that Chicago's real estate market is slowing less than other regions of the country. "If you have a good locations you know people are going to buy," he said. "I think there's a pent-up demand out there."

That pent-up demand was probably what led to the interest in Muhammad's complex; Bronzeville has been gentrifying recently.

"Gentrification, urban flight, black flight, those are the terminologies that we use," Muhammad said.

Condo conversion is part of gentrification. Problems arise when people in the apartments can't afford to buy. Legally, the apartment resident has first option for buying, but many don't have the money to purchase right away.

According to Carlson, about 10 to 15 percent of people who live in a property will buy it if it converts, but the number can be as high as 20 percent or more. He adds that, with tax benefits and appreciation, it can actually be cheaper to own, provided the resident can make the down payment. With the credit crunch, however, even though interest rates are low, some lenders are reluctant to give mortgages to low-income buyers.

At the height of the condo conversion boom came more protection for tenants. They are now legally guaranteed 120 days to move, 180 for the disabled or elderly.

In Summer 2007 the Illinois General Assembly passed a bill allowing former tenants to receive up to $10,000 in damages if a developer misrepresented its intention to convert a building to condominiums.

According to Bartlett, though, "There's certainly not enough regulation [for condo conversions], especially if there's any problems."