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Eviction History and Condominium Conversion Eligibility

By Andy Sirkin

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INTRODUCTION

Under San Francisco’s restrictive condominium conversion laws, a building’s eviction history can disqualify or delay the building’s eligibility to convert to condominiums. This means that a building that might otherwise be allowed to convert to condominiums, or to enter the condo conversion lottery, might be prevented from doing so because one or more rental tenants was evicted from the building in the past. The effect of past evictions is the same regardless of whether or not the owners wishing to convert to condominium owned the building when the evictions occurred. Unfortunately, several laws enacted at different times restrict condominium conversion based on past evictions. In practice, this makes the rules relating to conversion and eviction history very confusing. Although this article attempts to collect the various laws and relate them to each other, the required analysis remains complex.

PROTECTED TENANTS AND NO-FAULT EVICTIONS

To apply these rules, it is helpful to understand two concepts. The first is the concept of the “Protected Tenant”, a term that is used frequently in various San Francisco laws, but actually means different things depending on context. In the world of condominium conversion eligibility, a Protected Tenant is someone who is either: (i) catastrophically ill; (ii) disabled; or (iii) has lived in the property for 10 years, and is 60 years old or older. As explained below, eviction of a Protected Tenant has more serious condominium conversion consequences than eviction of a tenant who is not “Protected”.

The second important concept is the “No-Fault Eviction”. In each of the condo conversion eligibility rules, an eviction is a No-Fault Eviction if the grounds for the eviction stated in the eviction notice was: (i) The owner wanted to move in; (ii) The owner wanted a relative to move in; (iii) The owner wanted to demolish the unit; (iii) The owner wanted the tenant to relocate temporarily so the owner could fix up the unit; (iv) The owner wanted to substantially rehabilitate the unit; or (v) The owner wanted to take the unit off the rental market (an “Ellis Act Eviction”). In certain condo conversion eligibility rules, an eviction for substantial rehabilitation or for lead remediation is also deemed a No-Fault Eviction. As explained below, only No-Fault Evictions affect condo conversion eligibility.

EVICTIONS AND TWO-UNIT LOTTERY-BYPASS CONVERSIONS

In general, a building with no more than two residential units can be converted to condominiums after each of the units has been occupied by a separate owner for one year. Buildings that satisfy these conditions bypass the condominium conversion lottery. To determine whether a past eviction might hinder or delay a two-unit bypass conversion, ask the following questions in the following order.

QUESTION 1: Was there a No-Fault Eviction of a Protected Tenant on or after November 16, 2004?

If so, the building cannot use the lottery bypass system to convert unless the Protected Tenant re-occupied the unit from which he/she was evicted.

QUESTION 2: Were there No-Fault Evictions in both units on or after May 1, 2005, where none of those evicted was a “Protected Tenant?

If so, the building cannot use the lottery bypass until each of the units has been occupied by a separate owner for ten years. However, there are two exceptions to this rule: (i) Both units were owner occupied on April 4, 2006; or (ii) The eviction notice was withdrawn before the date when the tenant was required to vacate, and the tenant continued to live in the unit for at least 120 days afterward. If either of these exception situations exist, the building can use the lottery bypass after the normal one-year occupancy.

EVICTIONS AND THE EXPEDITED CONVERSION PROGRAM

The new "Expedited Conversion Program", created in June 2013, allows buildings that lost the 2012 or 2013 conversion lottery, and buildings owned as a TIC as of April 15, 2013, to convert provided they meet certain owner-occupancy requirements. Under this program, a different subset of buildings meeting these requirements are eligible to convert, without winning a lottery, in each year beginning in 2013 and ending in 2020. For detailed information on conversion under the Expedited Conversion Program, see the article entitled New TIC Condo Conversion Law. To determine whether past evictions might hinder or delay a lottery conversion, ask the following questions in the following order.

QUESTION 1: Was there a No-Fault Eviction of a Protected Tenant on or after November 16, 2004?

If so, the building cannot use the lottery bypass system to convert unless the Protected Tenant re-occupied the unit from which he/she was evicted.

QUESTION 2: Were there No-Fault Evictions in two (or more) units on or after May 1, 2005, where none of those evicted was a “Protected Tenant?

If so, the owner-occupancy duration is lengthened to ten years unless eviction notices were withdrawn before the date when the tenants were required to vacate, and the tenants continued to live in the units for at least 120 days afterward.

QUESTION 3: Was there a No-Fault Eviction after March 31, 2013?

If so, the building is no eligible for conversion under the Expedited Conversion Program unless the tenant re-occupied his/her unit after eviction.

EVICTIONS AND LOTTERY CONVERSIONS

The conversion lottery has been suspended at least until 2024. When it returns, a building with 2-4 residential units may enter if all but one of the units have been owner-occupied for three years as of the lottery entry deadline. To determine whether past evictions might hinder or delay a lottery conversion, ask the following questions in the following order.

QUESTION 1: Was there a No-Fault Eviction of a Protected Tenant on or after May 1, 2005?

If so, the building can never be converted to condominiums unless eviction notice was withdrawn before the date when the tenant was required to vacate, and the tenant continued to live in the units for at least 120 days afterward

QUESTION 2: Were there No-Fault Evictions in two (or more) units on or after May 1, 2005, where none of those evicted was a “Protected Tenant?

If so, the occupancy duration is lengthened from three years to ten years unless eviction notices were withdrawn before the date when the tenants were required to vacate, and the tenants continued to live in the units for at least 120 days afterward.

QUESTION 3: Was there a No-Fault Eviction of a Protected Tenant between January 1, 2000 and April 30, 2005?

If so, the building can never qualify to enter “Pool A” of the condominium conversion lottery, meaning the odds of the building winning the condo conversion lottery will be very low. Note that this rule does not apply if the Protected Tenant re-occupied the unit from which he/she was evicted.

QUESTION 4: Was there a No-Fault Eviction of a Protected Tenant between November 16, 2004 and April 30, 2005?

If so, the building will only be eligible to participate in the condominium lottery after the first 175 units have been selected. In practice, this will keep its odds of winning the lottery below 2%. Again, this rule does not apply if the Protected Tenant re-occupied the unit from which he/she was evicted.

QUESTION 5: Was there a No-Fault Eviction after January 2017?

If so, the building may have to delay entering the lottery, depending on the number and type of evictions, and whether or not the evicted tenant(s) re-occupied. These specific rules applicable to post-January 2017 evictions are complex, so please call our office for additional information.


DETERMINING THE DATE OF AN EVICTION

In applying the rules relating to eviction history and condominium conversion, it is necessary to determine the date of each eviction that might affect conversion eligibility. Unfortunately, answering this seemingly straightforward question is complicated by wording variations among the three different laws that apply, and DPW's inconsistency when applying these laws. We recommend that you first obtain a printout of your building's eviction history from the SF Rent Board, then call our office to discuss your situation.


LEARNING MORE

If you need more information about the effect of eviction history on condominium conversion, please call Sirkin & Associates at 415-738-8545. We would be happy to help you apply these complex rules to your particular situation. If you have more general questions about San Francisco’s condominium conversion rules, pleased consult our comprehensive article entitled “Condominium Conversion In San Francisco” which you can find at www.andysirkin.com, or by calling our office. Our website also contains a variety of other specialized articles on condominium conversion, as well as the full original texts of the applicable laws and many helpful links.


ABOUT THE AUTHOR

Sirkin & Associates has been guiding clients through San Francisco condominium conversions and subdivisions for almost 20 years, and have completed more SF conversions than any other firm. Over the years, we have been involved in drafting many of the laws that govern SF condominium conversions, and have helped develop many of the procedures used by the San Francisco Department of Public Works (“DPW”) Bureau of Street Use and Mapping (“BSM”). Our breadth of experience makes it likely that if a glitch appears in the condominium conversion process, we will have seen something similar before and know exactly what to do. And for those rare occasions when a completely new issue arises, we are the recognized masters at developing creative solutions that save our clients time and money.

Experience has taught us that the most important things to our clients are the immediate availability of staff to answer client questions and diligence in following the process of governmental approval. To ensure we achieve these goals, we have a full-time paralegal, Cam Perridge, devoted to client contact, preparation of subdivision applications, and monitoring subdivision approvals. Cam maintains a direct-access telephone line and can be reached easily any weekday to discuss the status of a conversion or subdivision process. And for those occasions when you need to speak with an attorney, Andy Sirkin is committed to being available to you when you call or within the next 24 hours. Andy is known for his diligence in calling clients back quickly, and is more committed than ever to being easily reached.

But while processing the condominium conversion or subdivision quickly and efficiently may be our client’s most immediate priority, the governing documents (the Declaration of Covenants, Conditions and Restrictions, or “CC&Rs” supplemented in some cases by Bylaws and/or Articles) will have much greater long-term impact. The quality of the governing documents will directly affect the quality of life of the owners, as well as their ability to refinance and sell. Andy Sirkin has been co-author of the past 10 editions of The Condominium Bluebook, and his expertise in preparing condominium governing documents is recognized throughout California. Sirkin & Associates governing documents continue to be the ones other firms emulate, and Realtors, lenders and buyers strongly prefer. This leadership results from constant improvement and innovation that makes our documents easier to read and understand, as well as more efficient and less expensive to enforce.

Before you choose a lawyer to handle your condo conversion or new construction subdivision, take a moment to speak with Cam, Andy, or attorney Rosemarie MacGuinness, at Sirkin & Associates. Our practice includes all required City and State applications and filings, as well as preparation of any governing documents you may need. We offer these services on a flat-fee basis, and our rates are generally lower than those of other firms.


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