Department of Public Works: Condo Conversion in San Francisco

Condo Conversion in San Francisco

2009 Condominium Conversion Lottery Information

2008 Condominium Conversion Lottery Breakdown

2 Unit Lottery Bypass Condo Conversion Process Flowchart
2 - 6 Unit Lottery Winner Condo Conversion Process Flowchart

What is a Condominium?
What Properties Qualify for Conversion?
What is the Fee Schedule?
What are the Owner-Occupancy Requirements?
How does the Conversion Lottery Work?
What are the "Tenant Rights" Rules?
What Building Code Requirements Apply to Conversion?
How does Qualifying Properties Begin Conversion?
What Steps Remain after an Application is Tentatively/Conditionally Approved?
How can I Get Additional Information?

2008 Condominium Conversion Lottery Results - a report of all the condo conversion lottery results for the February 2008 draw. This link will take you to the report screen where you can search for lottery winners and standby list. The first 200 units drawn are eligible to apply for condo conversion that year.

WHAT IS A CONDOMINIUM?

A condominium consists of an individually owned “Unit” and a share of group owned “Common Area”. The “Unit” is the space within the walls, floors and ceilings of a particular dwelling, and the “Common Area” is the remainder of the property. Owners pay their own mortgages, property taxes, and utilities, plus monthly “Homeowners’ Association Dues” to cover repair and insurance of the Common Area. A lengthy document called the “Covenants, Conditions and Restrictions” or “CC&Rs” establishes the rights and duties of condominium owners in a particular property.

WHAT PROPERTIES QUALIFY FOR CONVERSION?

Only 2 to 6-unit residential buildings may be eligible to convert. They will qualify if they (i) meet owner occupancy requirements, (ii) win a conversion lottery, and (iii) satisfy “tenant rights” rules. The conversion lottery may be by-passed for 2-unit buildings with owners occupying both units.

WHAT IS THE FEE SCHEDULE?

The complete Fee Schedule can be found here.

WHAT ARE THE OWNER-OCCUPANCY REQUIREMENTS?

For 2 to 4- unit buildings, at least one unit must be owner-occupied for three years; for 5 or 6-unit buildings, at least three units must be owner-occupied for three years. The term “owner-occupied” means that the occupant can be a tenant for three years so long as he/she is an owner at the time of registration for the lottery and at the time of application for the lottery. For lottery ticket purchase, the following items are required in order to show owner occupancy. 1) a notarized affidavit for owner occupancy (provided in the lottery ticket purchase application), 2) copy(ies) of your grant deed listing all owners of record, 3) homeowner tax exemption records to prove occupancy. If you have not applied for your homeowner tax exemption you may do so at room 190 City Hall (keep a copy of your receipt for your records). The three-year period is measured backwards from the day of the lottery entry deadline. Buildings with 2 units by-pass the conversion lottery if both units have been owner-occupied for one year at the time of application.

HOW DOES THE CONVERSION LOTTERY WORK?

First year applicant of each building may register only one lottery ticket for the annual lottery at Room 460 - 875 Stevenson Street. On lottery day, buildings are assigned priority according to order drawn. The first 200 units drawn are eligible to apply for conversion that year, and all remaining units are wait-listed in case others are rejected or withdrawn. Losing properties may re-register the following year and are entitled to additional tickets for losing years.* Additional tickets are allowed provided the applicant submits documents, as requested by The City showing, continued occupancy. All applicant must continue to meet owner occupancy requirements. The number of lottery registrants has been over 200 buildings, totaling over 700 units in each of the 1997 and 1998 lotteries.

* For all losing years up to 1994 – one additional ticket

For years 1995 to present – one ticket for each year loss (must have confirming letter of Standby Certification).

WHAT ARE THE “TENANT RIGHTS” RULES?

Tenants have a right to purchase their unit at a price established by the owner. Tenants who decline are entitled to remain at their current rent (with allowed increases based on the Consumer Price Index, and/or Rent Control Ordinance, as applicable) for one year after completion of conversion. Tenants over 62 are entitled to lifetime leases. Tenants who elect to move within the first 120 days after conversion are entitled to up to $1,000 in moving expenses. All tenants must be notified of these rights and at least 40% of the owners and/or tenants, from separate units, must sign “Tenant Intent To Purchase” forms. See the chart below for details. The intent to purchase forms, once signed by a tenant, shall be irrevocable by said tenant, for purposes of compliance with this Section, provided, however, that the Director shall invalidate any such form upon a determination that the subdivider has used coercion, fraud, duress, misrepresentation or threat in connection with obtaining or soliciting such form.

2 residential units	3 - 5 residential units	6 residential units
One signed Tenant Intent to purchase form required upon application submittal.	Two signed Tenant Intent to purchase forms required upon application submittal.	Three signed Tenant Intent to purchase forms required upon application submittal

WHAT BUILDING CODE REQUIREMENTS APPLY TO CONVERSION?

As part of the conversion process, the owner must request building, plumbing, and electrical inspectors from the City to inspect the property for any code violations and prepare a written report. Some typical findings include violations with: Work which was completed without required permits (e.g. kitchen renovations, in-law units, etc.), and conditions which present safety hazards (e.g. poor fire egress, dangerous electrical wiring, etc).

The owner must correct all violations cited on the report before completing conversion. Owners also must comply with the Energy and Water Conservation Ordinances. The owner shall correct all code violations cited within six months from the issuance of the report. Converted Condominiums have to maintain all existing off-street parkings. It may be possible to anticipate the work required by obtaining an inspection by a private contractor/consultant. If a City Physical Inspection is requested, the Physical Inspection Report will normally be considered valid for a year for the purpose of satisfying the requirement in a condominium conversion application. Questions concerning permits, inspections, building code requirements and other building related issues should be directed to Department of Building Inspection.

HOW DOES QUALIFYING PROPERTIES BEGIN CONVERSION?

Owners of qualifying buildings (either lottery winners or owner-occupied duplexes) must submit an application package to the Department of Public Works. Some major components of the package are:

Application Packet:

Owner can obtain blank application packet and return completed application to 875 Stevenson Street, Room 460 - Bureau of Street-Use & Mapping, Department of Public Works.

Inspection:

Owner can apply to the Department of Building Inspection for Physical Inspection Report and 3-R Report. Backlogs can delay the issuance of inspection report, and early request for inspection is recommended.

Survey:

Conversion requires a survey “Map” prepared by a licensed land surveyor or civil engineer (licensed before 1982) who will locate the boundaries of the property and the condominium units. The survey may take 3 to 6 weeks or more to complete depending on the individual consultant.

Proof of Occupancy:

Owners must prove occupancy with a signed notarized copy of Form Number 11 from the condominium conversion application and homeowner tax exemption record.

Tenant Intent To Purchase Form:

See paragraph regarding “Tenant Rights” earlier.

The package must also include the following:

A “3-R Report” describing the permit history of the property
Description of building history, photos of the front and rear of the property
A title report
A five-year tenant history
Approximate value for each unit
Identification of current tenants and their units
A statement of tenant contacts
Proposition M Findings showing the conversion complies with The City’s Master Plan

Applications for 5-6 units also require:

A diagram and a list of owners and addresses
One set of stamped, addressed envelopes for all properties within a 300’ radius, one set of mailing labels, mailing list and 300’ radius map.

Note: Some owners choose to hire attorneys and/or consultants to compile and submit the application for them.

WHAT STEPS REMAIN AFTER AN APPLICATION IS TENTATIVELY/CONDITIONALLY APPROVED?

Upon issuance of Tentative map decision Department of Public works will request, two updated check prints and a copy of the CFC issued by Department of Building Inspection
After necessary adjustments on the preliminary submitted map by the owner’s surveyor/engineer, the map to be recorded shall have Proper signatures in accordance with the Subdivision Map Act. Then, the surveyor/engineer will submit the signed map to the Department of Public Works, and Tax Certificate showing property taxes are paid current.
For 2 to 4-unit buildings, the Department of Public Works will then request a subdivision guarantee and record the map when the report is issued.
For 5 to 6-unit buildings, the Department of Public Works will submit legislation to the Board of Supervisors for approval before the final map is ready for recordation. When the subdivision guarantee is issued, Department of Public Works will record the condominium map.
Buildings with 5 to 6-units are required by the State of California to obtain a “Final Report” from the California Department of Real Estate by submitting a separate application package. Information is available by consulting the State Department of Real Estate.

HOW CAN I GET ADDITIONAL INFORMATION?

In San Francisco, the condominium conversion process is regulated by the California State Subdivision Map Act, the San Francisco Subdivision Code, and Regulations. The information, which is of most concern to the property owners, is in Article 9 of the San Francisco Subdivision Code, which is readily available for reference in San Francisco Public Libraries. Blank Condominium Conversion Application Packets and additional information are available in Room 460, 875 Stevenson Street or by calling 415-554-5827. Professional practitioners may also be consulted for assistance.