25.34.050 Residential Condominium Conversions
A. Purpose. The purpose of this chapter is to:
1. Provide standards and criteria for regulating the conversion of rental housing to residential condominium units or rental housing to a condominium hotel, community apartment, or stock cooperative types of ownership and for determining when such conversions are appropriate.
2. Mitigate any hardship to tenants caused by their displacement.
3. Provide for the public health, safety, and general welfare.
B. General requirements.
1. Where Permitted. If approved under the provisions of this chapter and Title 25, Zoning, of this code, condominium conversion projects may be allowed in any district in which residential uses are permitted, including specific plan areas, subject to the approval of a conditional use permit, a tentative map, and all other provisions and requirements of this chapter.
2. Review Responsibilities. Condominium conversion projects shall be approved by the Commission pursuant to a conditional use permit. A tentative and final tract map shall be required for all subdivisions creating five or more condominiums, five or more parcels as defined in Section 783 of the California Civil Code, a community apartment project containing five or more parcels for the conversion of a dwelling to a stock cooperative containing five or more dwelling units, or for the creation of five or more condominium hotel units.
3. Parcel Map. A parcel map shall be required for all subdivisions creating four or fewer condominiums, four or fewer parcels as defined in Section 783 of the California Civil Code, a community apartment project containing four or fewer parcels, or for the conversion of a dwelling to a stock cooperative containing four or fewer dwelling units.
4. Applicable Standards. Condominium conversion projects shall conform to: (1) the applicable standards and requirements of the zoning district in which the project is located at the time of approval; (2) Section 25.34.050 of the Palm Desert Charter and Municipal Code; and (3) all other applicable local, state, and/or federal laws and codes.
C. Tenant notification and public hearing notice.
1. Tenant Notification. The applicant for a condominium conversion project shall be responsible for notifying existing tenants of the proposed conversion in accordance with Government Code Sections 66452.8 and 66452.9 of the Subdivision Map Act. The applicant shall provide each tenant with a copy of all City staff reports on the application pursuant to Government Code Section 66452.3. In addition, the applicant shall give notice to tenants residing in units proposed to be converted that a final map for the proposed conversion has been approved in accordance with Section 66427.1(b) of the Subdivision Map Act. If the condominium conversion project is approved, the applicant shall give all tenants written notice of the termination of their tenancies in accordance with Section 66427.1 of the Subdivision Map Act.
2. All Other Notices. The applicant shall give all other notices required by applicable federal, state, and local law.
3. Evidence of Tenant Notification. The applicant shall submit evidence in writing to the Director, certified under penalty of perjury, that all applicant-required notification specified in subsections A and B of this section have been satisfied.
D. Standards for condominium conversions. Condominium conversions shall conform to the applicable local, state, and federal laws in place at the time of the conversion, subject to any valid, applicable exceptions thereto. In addition, the following general requirements shall apply:
1. That all condominium conversion projects provide off-street parking as required herein for condominium projects of the Palm Desert Charter and Municipal Code, unless a parking study performed to the satisfaction of the City Manager or designee demonstrates that existing off-street parking successfully meets the needs of all dwelling units.
2. That all condominium conversion projects shall include provisions to demonstrate compliance with the Palm Desert energy standards as provided in Ordinance No. 1124, or as it may be amended.
3. Surveying. Permanent survey monuments shall be installed at all parcel/lot corners of a map required per this division by a California-licensed land surveyor or registered civil engineer authorized to practice land surveying, in accordance with Government Code Section 66495.
E. Tenant purchase option. The property owner shall provide each tenant of a rental unit to be converted pursuant to this chapter with a 90-day right of first refusal to purchase his or her respective unit in accordance with Section 66427.1 of the Subdivision Map Act.
F. Tenant relocation plan. The applicant shall submit a tenant relocation plan containing and complying with the following:
1. A detailed report describing the relocation and moving assistance information to be given to each tenant. The report shall state in detail what assistance will be provided for special category tenants.
2. The applicant shall provide a tenant information handout and a questionnaire to each tenant with an envelope, postage prepaid, addressed to the Department. The questionnaire shall include questions regarding tenant income, length of tenancy, age, disability, and household size, and shall request that the tenant return the completed form directly to the Department.
G. Consumer protection provisions. In addition to the tenant protection provisions set forth in the Subdivision Map Act, the applicant shall comply with the following provisions, as conditions of any condominium conversion use permit for a condominium conversion project approved pursuant to this chapter:
1. Relocation Assistance. The applicant shall offer to each eligible tenant a plan for relocation to alternative housing.
i. The relocation plan shall provide for the following: assistance to each eligible tenant in locating alternative housing, including but not limited to providing availability reports where necessary.
ii. Payment of a relocation fee to each eligible tenant who does not choose to purchase a condominium unit. The payment shall be a one-time lump sum cash payment of at least $1,500 in 2006 (calendar year) dollars, escalated annually by the Consumer Price Index for Los Angeles-Riverside-Orange County. An otherwise eligible tenant is not entitled to a relocation fee pursuant to this subsection if the tenant has been evicted for just cause. In addition, a cash payment of actual deposit costs shall be made to each eligible tenant who does not choose to stay for utility deposits and hook-up costs.
iii. In the case of eligible tenants who are also special category tenants as defined herein, the applicant shall provide to the displaced special category tenant, in addition to the relocation fee specified in subsection (A)(2) of this section, a one-time lump sum payment not to exceed a total of $1,000 in 2006 dollars, escalated annually by the Consumer Price Index for Los Angeles-Riverside-Orange County, of the first month’s rent in the alternative housing, if required upon moving in, and the transfer to the new complex of all key, utility, and pet deposits to which the special category tenant is entitled upon vacating the unit.
iv. The relocation assistance payments referenced herein shall be paid at the time the tenant vacates the unit.
v. The applicant’s offer to each eligible tenant of relocation assistance shall be free of any coercion, intimidation, inducement, or promise not herein specified and shall not cause the tenant to vacate in advance of a timetable or schedule for relocation as approved in the application for approval of conversion.
2. Antidiscrimination. The applicant or owner of any condominium unit within a project shall not discriminate in the sale, or in the terms and conditions of sale, of any dwelling unit against any person who is or was a lessee or tenant of any such dwelling unit because such person opposed, in any manner, the conversion of such building into a condominium.
H. Applications for condominium conversions. After preliminary applications are accepted for further discretionary review, the applicant shall submit all the information required for a conditional use permit application and a tentative map pursuant to this code. In addition, the applicant shall submit information demonstrating that the project as a whole will be in good repair on the interior and the exterior when offered for sale.
Recognizing that the conversion of existing structures which have been previously occupied and constructed as rental units presents unique problems to present tenants and future buyers, the application for a condominium conversion project conditional use permit shall include the following information in addition to that required by other sections of this code:
1. Pest Inspection Report. A report by a California-licensed structural termite and pest control specialist certifying whether or not all attached and detached structures are free of infestation and structural damage caused by pests and dry rot.
2. Building History Report. A building history report identifying the date of construction of all elements of the project and permit history.
3. Plot Plans. Scaled plot plans and elevations indicating the type and location of all buildings and structures, parking and landscape areas, signs and any other plans that may be deemed necessary by the City Manager or designee. Screening, landscape, and irrigation plans shall be included in the plans.
4. As a condition of approval, all condominium conversion projects shall be required to provide, at applicant’s cost, each buyer with a housing inspection report prepared by an architect or structural engineer licensed by the State of California and in good standing with the California Architects Board or the Board for Professional Engineers and Land Surveyors, respectively. Said housing inspection report shall detail the structural condition and use life of all elements of the property, including but not limited to foundations, roofs, electricity, plumbing, utilities, walls, ceilings, windows, frames, recreational facilities, sound transmissions of each building, mechanical equipment, parking facilities, and drainage facilities. Such report also shall describe the condition of refuse disposal facilities; swimming pools, saunas, and fountains; stone and brickwork; and fireplaces, exterior lighting, appliances, mechanical equipment for heating and cooling, interior and exterior paint and/or stucco.
I. Affordable housing. In higher-density multifamily residential developments, the City encourages inclusion of affordable units. As part of the application package, the applicant shall submit an affordable housing implementation plan (AHIP) showing how the project will assist in meeting the affordable housing needs of the City. The AHIP shall include specific information concerning the demographic and financial characteristics of the project, including but not limited to the following:
1. The square footage and number of rooms in each unit.
2. The rental rate history for each type of unit for the previous three years.
3. The monthly vacancy rate for each month during the preceding three years.
4. A complete list of the number of tenants and tenant households in the project, including the following information:
i. Households with persons 62 years or older.
ii. The family side of households, including a breakdown of households with children five years and younger, and between six and eighteen years.
iii. Households with handicapped persons.
iv. The length of residence.
v. The age of tenants.
vi. The designation of low- and moderate-income households and whether any are receiving federal or state rent subsidies.
5. When the subdivider can demonstrate that demographic information is not available, this requirement may be modified by the City Manager or designee.
6. The proposed price of each of the units.
7. The proposed homeowners’ association budget, detailed to include fixed costs, operating costs, reserves, administration, and contingencies.
8. A statement of intent as to the types of financing programs to be made available, including any incentive programs for existing residents.
9. Evidence that a certified letter of notification was sent to each tenant for whom a signed copy of such notice is not submitted. In the event that recorded covenants and/or affordable housing agreements already exist for persons and families of moderate income, low income and/or very low income in a multifamily complex or development which an applicant seeks to convert pursuant to this chapter, the applicant is required, and must demonstrate in its AHIP, that the moderate-income, low-income and very low-income unit(s) will remain available to persons and families of moderate income, low income and very low income, either by the recordation of new affordability covenants for the newly converted units, which shall be subject to prior review and approval by the City Manager or designee and the City attorney, or by continuing to rent converted units to qualified moderate-income, low-income and very low-income persons and families for the duration of the remaining recorded covenants and/or affordable housing agreements.
J. Tentative map review procedures.
1. List of Tenants. In addition to the standard application requirements for tentative maps, the applicant shall submit a complete mailing list of all tenants occupying the subject property and two corresponding sets of address labels. The City Manager or designee shall mail a public hearing notice for the tentative map hearing to each tenant on the mailing list and to owners of property within 300 feet in accordance with the procedures of the Subdivision Map Act and this code.
2. Tentative Map Review. Tentative maps shall be approved, approved subject to conditions, or denied by the Commission. Decisions on tentative maps for condominium conversion projects shall be governed by the Subdivision Map Act and this chapter.
3. Council Findings for Residential Conversions. A final map for a condominium conversion shall not be approved unless the Council makes all of the findings set forth in Section 66427.1 of the Subdivision Map Act regarding tenant notification, right to purchase and other requirements, as well as all other applicable local, state, and federal laws.
K. Findings. The Commission/Council shall not approve conditional use permit for a condominium conversion project unless it finds all of the following:
1. That the condominium conversion project is consistent with the applicable findings specified in Section 25.72.050 (Conditional Use Permits).
2. That the applicant does not seek to convert an apartment complex or development, which received a certificate of occupancy for any unit located therein within the preceding 12 months.
3. That the average rental vacancy rate in apartment dwelling units within the City during the 24 months preceding the filing of the application is equal to or greater than 5 percent. Upon submission of the application, the City Manager or designee shall obtain, at applicant’s sole expense, a written study or report from an objective, unbiased third party which provides such studies and/or reports as part of its ordinary course and scope of business on a statewide or nationwide basis, which, in the reasonable opinion of the City Manager or designee, reflects that the average rental vacancy rate in apartment units then available in the City is 5 percent or higher. If the average rental vacancy rate in the City during the 24 months preceding the filing of the application is less than 5 percent or if as a result of the approval of said condominium conversion the vacancy rate would be less than 5 percent, the condominium conversion project shall be denied unless the Commission/Council determines that at least one of the following overriding considerations exist:
i. Evidence has been submitted that at least 50 percent plus one of the eligible tenants have voted to recommend approval of the conversion.
ii. That the evidence presented to the Commission/Council as part of the application for the project overwhelmingly complies with the policies and intent of this chapter. Applicants shall be able to request that the Commission/Council allow for a condominium conversion project to be considered for approval where the vacancy rate and/or tenant approval percentage requirements of this section have not been met but have been substantially complied with.
4. Conversions of projects containing four units or less shall not be subject to the above vacancy rate provisions.
L. Commission/Council determination. The Commission shall hold a duly noticed public hearing on a condominium conversion project, and the decision of the Commission shall be final unless a timely appeal is filed. When a timely appeal is filed to a decision of the Commission, the Council shall hold a public hearing on a condominium conversion project, and the decision of the Council shall be final and subject to appeal only by way of writ of mandate to a court of appropriate jurisdiction. A condominium conversion project conditional use permit may be approved subject to such conditions as the Commission/ Council may prescribe.
M. Lapse of permit.
1. Notwithstanding the time periods prescribed herein, a conditional use permit for a condominium conversion shall lapse and shall become void two years following the date on which the conversion conditional use permit became effective, unless prior to the expiration of two years, unless one of the following applies: (a) separate property interests have been created and recorded for each unit; (b) a building permit has been issued and reconstruction or other work necessary as a result of the conversion is commenced and diligently pursued toward completion on the site which was the subject of the conversion permit application; or (c) a certificate of occupancy has been issued for the structure(s) which was the subject of the conversion use permit application.
2. A conversion conditional use permit subject to lapse may be renewed for an additional period of one year at the discretion of the Commission, provided that prior to the expiration date, a letter requesting renewal of the conversion conditional use permit is filed with the City Manager or designee.
N. Exemptions. For residential developments, the conversion of existing apartments to a condominium project shall be exempt from the requirements of parkland dedication or parkland in-lieu fees if, on the date of conversion, the apartment complex is at least five years of age and no additional dwelling units are to be added as part of the conversion as provided in Section 66477(d) of the Subdivision Map Act. (Ord. 1259 § 1, 2013)