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Condominium Conversions
The local governing body (city or county) will have specific requirements for the approval of a conversion from an apartment to condominiums which will include noticing, relocation benefits and a tenant’s right to purchase their unit.
The Subdivision Map Act, Section 66427.1, outlines the noticing requirements and references other sections of the Map Act that are relevant to conversions. The following is a summary of the tenant notices which are required at this time. The Map Act is updated annually and any changes affecting condominium conversions should be noted.
The local governing body may impose additional conditions but, at a minimum, the Map Act requires:
• 60 Day notice prior to filing a tentative map application, pursuant to Section 66452
• Notice of the public hearing for approval of the conversion, pursuant to Section 66451.3 and any appeals, pursuant to Section 66452.5
• 10 Day notice that an application for a Public Report will be or has been submitted to the DRE
• 10 Day notice of the approval of the final map by the City or County
• 5 Day notice that the developer has received the Public Report from the DRE
• After final map approval, notice to prospective tenants of a 90 day first right to buy
• 180 Day notice of intention to convert prior to termination of tenancy due to the conversion, pursuant to Section 66452.11, but not before the city has approved the tentative map
• Notice of tenant’s exclusive right to buy their unit for a period of not less than 90 days from the date of issuance of the Public Report, unless the tenant gives prior written notice of their intent not to purchase
Some of the notices referenced above have specific wording outlined in Sections 66452.8, 66452.9, 66459 and 66452.51 of the Map Act. You should consult with your engineer, attorney or condominium conversion consultant for the appropriate wording and timing of these notices.
The Department of Real Estate (DRE) also has additional filing requirements for condominium conversion projects of 5 units or more. They are:
• Submission of a Form RE 639, Conversion Questionnaire which asks for the age of the building and certain common area components and information regarding renovation and other matters
• Copy of the tenant’s notice of intention to convert and notice of tenant’s first refusal right
• Statement of defects
• Inspection reports
• Income and expense statements applicable to the project for the last three (3) years
NOTE: If you will not be recording a new loan, you should discuss the conversion with the existing lender. Some lenders will not cooperate and you may be forced to obtain a loan from a lender willing to sign the subdivision map, Condominium Plan, CC&R Subordination, and issue partial releases to close individual escrows.
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