East Palo Alto Municipal Code Ch. 14.24 Conversion of Apartments to Condominiums

Footnotes:

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Editor's note— Ord. No. 355, § 1, adopted July 3, 2012, amended the Code by adding provisions numbered as Ch. 14.20. In order to avoid conflicts in the numbering of chapters the editor has renumbered the provisions added by Ord. No. 355 as Ch. 14.24.

A. The purpose of this chapter is to regulate the conversion of residential multifamily apartments in order to:

1. Provide a reasonable balance of ownership and rental housing and a variety of choices of tenure, type, price and location of housing;

2. Protect tenants from evictions deriving from incentives to convert rental housing stock to condominiums;

3. Reduce the impact of conversion on residents in rental housing who may be required to relocate due to the conversion of apartments to condominiums by providing procedures for notification and adequate time and assistance for such relocation;

4. Ensure that converted housing achieves a high degree of appearance, safety, quality and is consistent with the goals of the city;

5. Promote homeownership opportunities and increase the amount of owner-occupied housing affordable to all segments of the community; and

6. Recognize that the conversion of rental units to condominium ownership reduces the stock of affordable rental units in the city.

B. In addition to any other applicable requirements of local, state or federal law, conversions of multifamily apartments to condominiums shall be subject to the requirements of this chapter.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

The director of community development shall determine and make public, on an annual basis, on the first of May of each year, the residential vacancy rate, as determined each year by the State of California Department of Finance (DOF) for all housing units in San Mateo County.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

A. No application for consideration of a tentative or preliminary parcel map for a subdivision to be created from a conversion, pursuant to the procedures set forth in the Zoning Ordinance for condominium conversions, may be filed with the city unless there is a vacancy rate of six (6) percent of the total housing inventory for San Mateo County as of the most recent determination pursuant to this chapter.

B. No application may be filed for any building containing less than four (4)units.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

No condominium conversion shall be approved unless all of the following are found:

1. The conversion is consistent with the general plan and will not be detrimental to the health, safety or general welfare of the community.

2. The residential vacancy rate of rental housing in the county has exceeded six (6) percent of the total housing inventory for all units in San Mateo County, as determined by the DOF, for a period of one year prior to the date of filing the application.

3. Vacancies in the project have not been increased for the purpose of preparing the project for conversion.

4. The proposed conversion will not displace a significant percentage of tenants and delete low and moderate income rental units from the city's housing stock at a time when no equivalent replacement housing is readily available in the city.

5. The conversion will not adversely impact the community's ability to provide housing for all economic segments of the community. A conversion may be denied based upon lack of reasonable alternative housing opportunities.

6. A park-in-lieu fee calculated according to standard city formulas is paid.

7. There will be compliance with the city's below market rate housing provisions for new development.

8. An affordable housing mitigation fee, as set forth in this chapter, will be paid.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

All applications for a condominium conversion must meet the following building code standards, in addition to the standards required by Zoning Ordinance Chapter 29.5:

A. Building Code Requirements. A building proposed for conversion, and each unit within the building, shall comply at a minimum with all applicable building code standards in effect at the time of the last alteration, repair, relocation, or reconstruction of the building, necessitating compliance with the building code, or, if none, at the time of first construction; and shall comply with current provisions of the city's housing code. Nothing herein shall be construed to prevent or prohibit the applicant or the city from providing or requiring building standards greater than those set forth in the building code where the greater standards are found to be necessary to carry out the purposes and objectives of this chapter.

B. Building Code Compliance. No building shall be permitted to be converted to condominium ownership unless the building was constructed and subject to a building permit issued under the provisions of the 1952 Uniform Building Code, or subsequently adopted Uniform Building Code.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

Any building or structure proposed to be converted from rental apartments to condominiums shall conform to or shall be found by the planning manager to be in substantial conformance with the development standard contained in East Palo Alto Zoning Ordinance Chapter 29.5. "Condominium Conversions" and with all standards, including off-street vehicular parking and bicycle parking, required of new multiple residential structures provided in the East Palo Alto Zoning Ordinance. Conditions may be imposed on the map to assure that the project is as nearly in conformance with design standards as is practicable. The planning manager may exempt from the requirements of this paragraph conversions in which tenants residing in the building and representing eighty (80) percent or more of the units agree to purchase units or conversions carried out by a government agency or nonprofit organization for the purpose of providing, maintaining or developing housing for senior citizens or persons of low and moderate income.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

A. Notices Generally. With the exception of hearing notices, all notices referred to in this section shall be provided either by the applicant by (i) personal delivery, or (ii) mailing the notice, postage prepaid, by certified letter with return receipt requested. Evidence of compliance with this section shall be submitted with the application for conversion. Notices must be written in nontechnical language comprehensible to all tenants of the building. Notices provided by the applicant shall be in both English and in the language used in the original lease or rental agreement, and any other language necessary to effectively communicate with the tenant population in order to clearly inform them of their rights as required by this chapter. All notices with general information shall be posted on-site in at least one location readily visible to tenants. Copies of notices and forms shall be made available if a tenant indicates the items have been misplaced or lost or are otherwise needed. The applicant shall determine whether a member of the household of each unit can speak English and seek appropriate assistance in communicating the importance of the contents of the notice to any household whose members cannot speak English.

B. Notice of Intent to Convert to Current Tenants. In accordance with California Government Code section 66427.1(a) or any successor statute, at least sixty (60) calendar days prior to the time of the filing of an application for the conversion of rental units to a common interest development, the applicant shall send to each tenant of the rental units to be converted a notice in the form outlined in Government Code section 66452.9 or any successor statute:

To the occupant(s) of

_____

(address)

The owner(s) of this rental development at (address) plans to file an application with the City of East Palo Alto to convert this rental development to a condominium/common interest development. You shall be given notice of each hearing for which notice is required pursuant to sections 66451.3 and 66452.5 of the Government Code, and you have the right to appear and the right to be heard at any such hearing.

_____

(signature of owner or owner's agent)

_____

(date) C.

Notice of Intent to Convert to Prospective Tenants. Commencing at a date not less than sixty (60) calendar days prior to the submittal of an application for the conversion of rental units to a common interest development, the applicant shall give notice of such application to each person applying after such date for rental of a unit of the subject property immediately prior to the acceptance of any rent or deposit from the prospective tenant. The notice shall be in substantially the following form:

To the prospective occupant(s) of

_____

(address)

The owner(s) of these units at (address), has submitted an application or plans to submit an application with the City of East Palo Alto to convert these units to a condominium/common interest development. No units may be sold unless the conversion is approved by the City of East Palo Alto, and until after a public report is issued by the Department of Real Estate when the conversion involves five (5) or more dwelling units. If you become a tenant of this development, you shall be given notice of each hearing for which notice is required pursuant to sections 66451.3 and 66452.5 of the Government Code and you have the right to appear and the right to be heard at any such hearing.

_____

(signature of owner or owner's agent)

_____

(date) I received this notice on_______(date)

_____ (prospective tenant's signature)

If the applicant or his or her agent fails to give notice, the applicant shall pay to each prospective tenant who becomes a tenant and who was entitled to such notice, and who does not purchase his or her unit, an amount equal to the sum of the following:

1. Moving expenses in the amount of one thousand dollars ($1,000.00).

2. The equivalent of three (3) months' rent, based on the highest rent paid by the tenant.

The amount due shall be paid at least one (1) month prior to the vacation date of the unit.

D. Notice that Application to Convert Has Been Submitted. Within ten (10) calendar days after the submittal of an application for the conversion of rental units to a condominium/common interest development, the applicant shall send to each tenant, and provide to each person who becomes a tenant at any time subsequent to such date, a written notice informing the tenants of all rights provided under the East Palo Alto Municipal Code, East Palo Alto Zoning Ordinance and state law, including:

1. That the owner of the development in which the tenant resides has submitted an application to the city to convert the units to a condominium/common interest development, the date such application was made, and if approved, that tenants will eventually be required to move unless they purchase a unit or qualify for and accept an offer of a lease as provided in this chapter.

2. A detailed description of the applicant's plans for relocation of tenants, relocation assistance, compliance with the sales and lease program for qualified low and moderate income tenants, and limitations on rent increases.

3. That an application for a public report has been submitted to the department of real estate and that such report will be made available upon request, in accordance with the provisions of California Government Code section 66427.1(a) or any successor statute.

4. That each tenant will be given at least ten (10) calendar days' prior written notice by the city (at the applicant's expense) of the date, time, and place of any hearing held on the application by the planning commission or city council and the availability of any staff report related to the hearing. The list of names and addresses of the residents of each unit in the conversion project provided by the applicant to the city shall be current as of the day of submittal and shall be certified as such by the applicant.

5. That each tenant will be notified in writing of the approval of the conversion, if it is approved, within ten (10) calendar days of such action.

6. That each tenant will receive ten (10) calendar days' written notification from the applicant that a final map for the conversion has been recorded and the implications of that filing.

7. That tenants have a right to terminate their leases.

Accompanying the sixty (60) calendar days advance notices shall be written information describing, in general terms, what steps and actions the applicant and others, including governmental agencies, must take in order for the units to be converted to a condominium/common interest development. It shall also include information on what rights the tenants have as set forth in this chapter. All documents referred to in this section shall be in a format approved by the planning manager.

E. Notices after Conversion Approved; Notice of Approval. If a conversion application is approved, the applicant must provide a notice of approval to each tenant within ten (10) calendar days of the approval. All notices referred to in this section shall be sent by certified mail by the applicant. Notices provided by the applicant shall be in both English and in the language used in the original lease or rental agreement and any other language necessary to effectively communicate with the tenant population. The notice of approval shall contain:

1. Tenant's right to purchase and the terms thereof;

2. Tenant's right of notification to vacate with approximate date the unit is to be vacated by;

3. Statement of terms and conditions of tenancy;

4. Provisions for relocation and moving expenses; and

5. Other information as required by the department of community development.

F. Notice of Right to Purchase. Each tenant shall receive a written notice of an exclusive right to contract for the purchase of his or her respective unit upon the same terms and conditions that such unit will be initially offered to the general public or on terms more favorable to the tenant. This right shall run for a period of not less than ninety (90) calendar days from the date of issuance of the subdivision public report issued by the department of real estate, unless the tenant gives prior written notice of his or her intention not to exercise the right. At least ten (10) days prior to the submission of an application to the department of real estate for a public report, the applicant shall provide notice to each tenant in the project of the fact that the application for a public report will be submitted and that upon the issuance of the public report the tenant will be granted an exclusive right to contract for the purchase of the unit occupied by the tenant. The notice shall further indicate the project will be subject to conditions, covenants, and restrictions that establish a homeowners' association to manage the project, that may restrict how the property is used, and that impose certain financial obligations on the owners of units within the project, such as the payment of monthly homeowners' association dues. In addition, within ten (10) days of the issuance of the public report, the applicant shall by mail notify each tenant in writing that the public report has been issued and shall in writing grant the tenant the right to purchase the unit as provided in this section. If the notice is not mailed within ten (10) days of the issuance of the public report, the tenant's right to purchase granted pursuant to this section shall be extended for a period equal to eighty (80) days from mailing of the notification.

G. Notice to Vacate. Each tenant shall receive written notice to vacate the unit. In accordance with the provisions of California Government Code section 66427.1(c) or any successor statute, such notice shall be provided at least one hundred eighty (180) calendar days from the first notice to vacate the unit and at least sixty (60) days prior to the filing of a tentative map. Additional notice shall be given at least sixty (60) calendar days after the filing of the final map, provided that approval of a condominium conversion use permit shall not impair the length of term or any other rights of a tenant under a validly existing lease or tenant agreement.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

A survey of all the tenants in the conversion project indicating how long each tenant had been a resident of the project, why each tenant moved into the project, how long each tenant had planned to live in the project, whether or not each tenant would be interested in purchasing a unit within the price range estimated for the project, where each tenant would relocate if the conversion took place and the tenant did not purchase a unit, and the extent of tenant approval in principle of the conversion. To comply with this provision the applicant shall provide a questionnaire, in a form approved by the city, to each tenant with an envelope, postage prepaid, addressed to the department of community development. The questionnaire shall direct the tenant to return the completed form directly to the city. The city may establish and charge a fee to the applicant for the compilation of the survey data.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

The 2010 United States Census identifies that twenty (20) percent more households rent than own housing in East Palo Alto than in the State of California and that 16.6 percent of East Palo Alto households have incomes below the federal poverty level, which is significantly higher than the 13.7 percent of California residents living below the poverty level. The comparatively high median value of owner-occupied housing, (fourteen (14) percent higher in East Palo Alto than in the State of California) and the relatively low median household income of East Palo Alto residents, (twenty (20) percent lower than incomes statewide), indicate that there is a need to mitigate the loss of affordable rental housing.

A. To mitigate the loss of affordable rental housing resulting from conversion, the city will apply an affordable housing mitigation fee to assist with the construction, rehabilitation, or acquisition of permanently affordable rental housing in the city. The city makes the following findings related to the affordable housing mitigation fee imposed by this chapter:

1. Conversions permitted by this chapter will diminish the supply of rental housing affordable to low and very low-income households, thereby creating undue hardships for low and very low-income residents displaced by conversion, and will otherwise adversely affect the availability and cost of housing affordable to low and very low-income families throughout the city.

2. An affordable housing mitigation fee imposed on conversions of existing residential rental units into condominiums (as defined in section 1351 of the Civil Code and sections 11004 and 11003.2 of the Business and Professions Code) will be used to mitigate reduction of the rental housing supply by funding preservation and development of permanently affordable housing for low and very low-income persons in the city.

3. The city council would not permit conversion of rental property to condominiums or cooperatives, except that the adverse effects of such conversions on low and very low-income households in East Palo Alto will be partially mitigated by the affordable housing fee described herein.

B. Conversion of rental housing units to condominium units pursuant to this chapter shall be subject to the payment of an affordable housing mitigation fee, unless otherwise exempted. The fee shall be deposited into a city affordable housing fund. Units resulting from the application of the below market rate housing program provisions shall be exempt from the affordable housing mitigation fee required by this chapter. The purpose of the fee is to mitigate the loss of affordability for low and very low income households that results from the conversion of rental apartment units to condominium units. The formula for calculating this nexus-based mitigation fee is as follows:

1. The costs of occupying a unit as a condominium will be determined by adding monthly mortgage payments, taxes, and homeowners' association fees, and multiplying the sum by twelve (12). Mortgage payments will be calculated at the current (at time of conversion application) average fixed rate 30-year mortgage as reported by the Federal Housing Administration, applied to ninety-five (95) percent of the purchase price.

2. Rental costs shall be the current rent of the unit at the time of filing an application for conversion under this chapter, multiplied by twelve (12). If the unit is owner-occupied or has not been rented within the previous twelve (12) months, the rental costs shall be the monthly rental rate for comparable recently rented dwelling units within in East Palo Alto. "Comparable units" are as defined in California Civil Code Section 1954.51(a).

3. The difference between the condominium ownership costs of the unit less the rental costs shall then be divided by the current fixed mortgage rate as set by the Federal Housing Administration to determine the affordable housing mitigation fee.

In the event a converted unit is sold, the affordable housing mitigation fee under this chapter shall be based on the actual sale price. If the sale price is questioned by the city as being unreasonably low or unreasonably high based on comparable sales or other similar evidence, it must be supported by an objective credible appraisal performed by a certified residential appraiser (AR) licensed by the California Office of Real Estate Appraisers, with no financial or other tie to the proposed conversion project, applicant or tenant. If the appraisal is within ten (10) percent of the actual sales price, the cost of the appraisal shall be deducted from the total mitigation fee amount owed to the city.

C. Fee Reduction.

1. The affordable housing fee may be reduced as set forth in this chapter if the owner converting the property has agreed as part of the application to limit future rent increases for the life of the property for any resident tenants at the time of conversion to no more than eighty (80) percent of the increase in the Consumer Price Index for all Bay Area Consumers.

2. The affordable housing mitigation fee for a unit that is occupied by an owner as his or her principal place of residence for at least five (5) consecutive years immediately prior to the date of sale, including as a tenant in that unit immediately prior to ownership, may be reduced by no more than twenty-five (25) percent.

D. A fee agreement, in a form specified by the city, indicating the formula by which the affordable housing mitigation fee shall be calculated and which implements the requirements of this chapter may be executed and recorded with the county recorder on the date of conversion in lieu of paying the entire fee at the time of project approval. The agreement shall be supplemented by a promissory note and deed of trust in favor of the city in an amount equal to the estimated affordable housing mitigation fee for each converting unit. The city shall agree to subordinate the deed of trust for purposes of refinancing property as long as doing so will not in its reasonable judgment impair the adequacy of its security. Upon full payment to the city of the fee for any unit(s) or for the entire property, the city shall record a release of the promissory note and deed of trust with the county recorder, against any unit(s) for which the fee was paid.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

A. Sales Program for Qualified Low and Moderate Income Tenants. The primary purpose of the sales and lease program is to mitigate the special impact a conversion project has on the low and moderate income tenants living in the project before conversion. This special impact is the result of the conversion project displacing these tenants while at the same time reducing the number of rental housing units in the market. The displaced low and moderate income tenants are more severely affected than other tenants and other individuals because of their inability, in most cases, to purchase the converted unit, their resulting immediate need to find replacement housing, and their lesser financial ability to compete for the remaining available rental units in the market. The proposed sales and lease program addresses the problem by providing ownership opportunities for low and moderate income tenants, thereby taking those tenants out of the rental market along with the converted unit, and by providing renewable leases for those tenants who cannot purchase, thereby retaining those units in the rental market for as long as the tenants are in need of them. A secondary purpose of the sales and lease program is to use condominium conversion projects as a source of low and moderate income ownership housing.

B. Program. The applicant shall offer for sale to all qualified low and moderate income tenants the unit in which each tenant resides at the time the use permit for the conversion project is approved, or a comparable unit within the project, at a price which is affordable to the tenant. A "comparable unit" shall be a unit with the same floor plan, same amount of floor area (as measured in square feet) and the same amenities as the unit in which the tenant resides at the time the special permit is approved. The offer shall be made before or concurrent with the grant of the exclusive right to contract for the purchase of the unit provided for in Section 66427.1(d) of the Government Code and shall remain open for ninety (90) days.

1. Definition—Qualified Low or Moderate Tenant. A qualified low or moderate income tenant shall be a tenant who meets all of the following requirements:

a. The tenant is an eligible tenant.

b. The tenant has an income which is lesser than either one hundred ten percent (110%) or less of the median income as established annually by the U.S. Department of Housing and Urban Development for the Standard Metropolitan Statistical Area in which the proposed conversion project is located, adjusted for the number of members in the tenant's or indexed against a measure published by East Palo Alto in response to the findings of a study, such as a nexus study.

c. The tenant does not, at the time notice of intent to convert is given by the applicant and at the time the offer is made, own any residential real property.

d. The tenant has not previously received assistance under this program.

e. The monthly payments of principal, interest, loan insurance fees, property taxes and assessments, fire and casualty insurance, property maintenance and repairs, utilities (excluding telephone service), and homeowner association fees and assessments associated with the unit if it were to be sold without restrictions would exceed thirty-five (35) percent of the tenant's monthly income.

f. The tenant's assets as defined in this section are not greater than the total of the amount necessary to pay the estimated closing costs and down payment on the unit, the amount necessary to pay six (6) months of the monthly payments described in subsection (e), and five thousand dollars ($5,000.00).

g. The tenant has provided the city with the information substantiating the qualifying criteria set forth in this section, and has supported the information provided with an affidavit or declaration to its truth and accuracy.

h. "Assets" means the value of the tenant's savings and any equity in stocks, bonds, real property, or other forms of capital investment. "Assets" do not include items reasonably necessary for the personal use of the tenant, such as personal effects, furniture, appliances and automobiles.

i. References to the qualified tenant's assets and income shall include the assets and income of those persons eighteen (18) years of age and older who are living with the tenant as a single housekeeping unit.

2. Definitions—Price.

a. A price which is "affordable to the tenant" shall be the maximum at which the tenant can qualify for financing for the unit for a minimum of thirty (30) years and for which the total monthly housing costs described in this section would not exceed thirty-five (35) percent of the tenant's monthly income; provided, that in no event shall the applicant be required to sell the unit under this sales program at a price below the apartment market value of the unit at the time the application for a special permit under this section is filed.

b. "Apartment market value" shall be the value of the unit as an apartment and shall be determined by either a single objective credible appraisal or, at the option of the applicant, by averaging the results of two independent objective appraisals. The appraisal(s) shall be submitted to the planning manager not less than thirty (30) calendar days prior to the first public hearing on the special permit. The appraisal(s) shall be made by fair and objective appraiser(s) selected randomly by the planning manager from a pool of names of qualified appraisers. A "qualified appraiser" shall be an objective appraiser experienced in appraising multiple-family residential property and who is either an active MAI member in good standing of the American Institute of Real Estate Appraisers, or an active SREA or SRPA member in good standing of the Society of Real Estate Appraisers, or an active ASA (urban real estate) member in good standing of the American Society of Appraisers, or a similarly qualified objective appraiser in good standing in a nationally recognized real estate appraisal institute or society with no financial or other tie to the proposed conversion project, applicant or tenant. The value determined by the independent objective appraisal(s) shall be binding on the city and the applicant. The applicant shall pay the fee(s) of the appraiser(s).

c. If, at the time the offer for sale at an affordable price is made under this subsection, the assets of the qualified tenant are not sufficient to cover the down payment and closing costs on the unit required by the financing institution to qualify for financing on the unit, the applicant shall pay all or a portion of the down payment and closing costs, as necessary, in an amount not to exceed two thousand dollars ($2,000.00). The amount paid by the applicant under this subsection shall be added to the amount secured by the second deed of trust on the unit under this section.

3. The qualified tenant shall have ninety (90) calendar days from the date the offer is made to accept the offer of sale. If the tenant does not accept the offer within that time period or fails to secure the necessary financing, the applicant may offer the unit for sale without restriction. The tenant shall be entitled to the renewable lease provisions set forth in this chapter and to all other protections provided in this chapter.

4. Whenever a unit is sold to a qualified tenant under this section, the unit shall be encumbered by a second deed of trust securing an obligation in an amount equal to the difference between the sales price paid by the qualified tenant and the price at which the unit would have sold without the requirements imposed by this section. The beneficiary under the second deed of trust shall be the applicant. The second deed of trust shall provide for the following:

a. Simple interest on the amount secured shall accrue at a rate not exceeding five (5) percent per year.

b. Neither principal nor interest shall be payable until the obligation secured by the second deed of trust has matured. The obligation shall mature when the unit is conveyed, transferred, leased, rented or otherwise alienated by the tenant; provided, that "conveyed, transferred, leased, rented or otherwise alienated" shall not include changes of ownership described in sections 62, 63, and 63.1 of the Revenue and Taxation Code.

C. Qualifications Determined by City.

1. To determine which tenants qualify for assistance under this section, the applicant shall provide to the city, the names and addresses of all the tenants in the proposed conversion project. The city shall notify the tenants of the provisions of this section by mailing, at the applicant's expense, a notice to each household. The notice shall request all information necessary to determine which tenants qualify for assistance. The notice shall instruct the tenants to return to the department of community development within twenty (20) calendar days the information requested, supported by affidavit or declaration under penalty of perjury as to its truth and accuracy. Based on the information received, the planning manager shall determine which tenants qualify for assistance, shall notify those tenants, and shall submit their names to the applicant.

2. Except for name and address, the information supplied by a tenant to the city under this section shall be held in confidence and shall not be disclosed to the public without the express written consent of the tenant.

3. Failure of any tenant to receive the notice advising of the sales program shall not invalidate any proceedings conducted hereunder.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

A. The applicant shall unconditionally offer to each tenant who is terminally ill a written lifetime lease to his or her rental unit. The rental for the first year of the original lease shall be the rental paid by the tenant on the date that the notice of intent to convert was given; thereafter, the rental may be increased annually on the anniversary date of the lease, commencing with the first anniversary date; provided, however, that the annual percentage increase in rent shall not exceed eighty (80) percent of the Consumer Price Index (CPI) for All Items for All Urban Consumers for the San Francisco-Oakland-San Jose Area for the preceding calendar year, as that data is made available by the United States Department of Labor. The lease required by this section shall be recorded by the applicant with the County Recorder and shall not be subordinated to any CC&R provisions related to tenant financial obligations or other liabilities.

B. The applicant shall unconditionally offer to each tenant who is elderly (has reached or will reach the age of sixty (60) years at the end of the calendar year in which that tenant's unit is offered for sale) or disabled a written lease with no less than a five-year term to his or her rental unit. The lease shall include two (2) five (5) year options to extend. The rent for the first year of the original lease shall be the rent paid by the tenant on the date that the notice of intent to convert was given; thereafter, the rent may be increased annually on the anniversary date of the original lease or any extension, commencing with the first anniversary date; provided, however, that the annual percentage increase in rent shall not exceed eighty (80) percent of the Consumer Price Index (CPI) for All Items for All Urban Consumers for the San Francisco-Oakland-San Jose Area for the preceding calendar year, as that data is made available by the United States Department of Labor. The lease required by this section shall be recorded by the applicant with the county recorder and shall not be subordinated to any CC&R provisions related to tenant financial obligations or other liabilities.

C. The applicant shall unconditionally offer to each qualified low or moderate income tenant who does not purchase a unit under the tenant purchase assistance program a written lease for a term of three (3) years on the unit in which the tenant resides (or a comparable unit within the project) at the time the use permit is approved. A "comparable unit" shall be a unit with the same floor plan, same amount of floor area (as measured in square feet) and the same amenities as the unit in which the tenant resides at the time the use permit is approved. Each lease for a qualified very low, low or moderate income tenant shall provide that the tenant shall have four successive options to renew the lease upon the terms and conditions as each original lease required by this section. The rental for the first year of the original lease shall be the rental paid by the tenant on the date that the notice of intent to convert was given; thereafter, the rental may be increased annually on the anniversary date of the lease, commencing with the first anniversary date; provided, however, that the annual percentage increase in rent shall not exceed eighty (80) percent of the Consumer Price Index (CPI) for All Items for All Urban Consumers for the San Francisco-Oakland-San Jose Area for the preceding calendar year, as that data is made available by the United States Department of Labor. The lease required by this section shall be recorded by the applicant with the county recorder and shall not be subordinated to any CC&R provisions related to tenant financial obligations or other liabilities.

D. Leases of at least six (6) months, or completion of the school year, whichever is longer, shall be offered to tenants with a child or children less than eighteen (18) years of age residing with them in their unit at the time of the initial notice to convert. Eligible tenants must provide evidence of enrollment and provide the date of the end of the school year in which the student is in attendance. Such lease rights shall expire no earlier than one hundred eighty(180) days from the date of receipt of a notice from the applicant that a final map has been recorded and any such lease shall be subject to the same conditions as other extended leases in this section.

E. Each extended lease shall further provide that the tenant shall have no power or right to assign the lease, or to rent or sublease the premises or any portion thereof, and that upon the death of the tenant, unless the person in the unit is a surviving spouse not named in the lease, the lease shall terminate. Any lease provision which violates the provisions of this section shall be void, and the balance of the lease shall be valid and enforceable. To the extent that such lease shall not expressly contain the provisions required by this section, the provisions shall be deemed to be incorporated in full therein. Any tenant who has paid rent in excess of the maximum rental specified by this section shall be entitled to a refund in the amount of the excess payment. Such tenants may elect to deduct the amount of the refund due them from future rent payments, provided notice of the intention to do so is given in advance.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

If temporary relocation of any tenant is necessary for renovation or rehabilitation of a unit between the date of submission of the conversion application and the date established for permanent relocation of the tenant, the applicant shall provide equivalent substitute housing for that tenant and his or her household, at no additional cost to the tenant, during the period that tenant's unit is being renovated or rehabilitated. Such substitute housing shall be within the city limits unless a different agreement is made between the applicant and the tenant by mutual consent. Any tenant temporarily relocated shall have the right to return to his or her former unit until the expiration of all rights granted to such tenant under this chapter and applicable provisions of state law. The obligation to relocate the tenant to alternate housing imposed on the applicant by this section shall only apply if the unit being renovated or rehabilitated is not habitable during such construction. The final determination of habitability and suitability shall be made by the building official or his or her designee. The applicant shall avoid the economic displacement of non-purchasing tenants in accordance with California Government Code section 66427.5 or any successor statute.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)

A. Relocation Fee Required: Any applicant who serves a notice of intent to convert on tenants pursuant to this chapter shall pay a relocation fee to each tenant in accordance with the provisions of this section. Such relocation fee shall be due and payable to each tenant who is not in default under his or her tenancy and does not exercise his or her right to purchase his or her unit unless the applicant notifies each tenant in writing of the withdrawal of the notice of intent to convert prior to such time as the tenant has: a) given the applicant notice of his or her last date of occupancy, or b) vacated his or her unit if such notice of the last date of occupancy is not given by the tenant. The applicant must file a copy of such withdrawal notice with the director of community development within one (1) week after serving such notice on the tenant.

B. Amount of Fee: The relocation fee due each tenant shall be calculated as follows:

1. Residing on property for less than two (2) years .....$7,500.00

Residing on property for two (2) years or longer .....$10,000.00

2. A tenant who, at the time of the notice of intent to convert is filed with the city, is a low or very low income tenant, a disabled or elderly tenant or terminally ill tenant, or who is a single head of household with minor children, shall be entitled to receive an additional payment of two thousand five hundred dollars ($2,500.00). If more than one additional payment category applies, the owner shall provide payment for each category.

3. Commencing April 1, 2012 the relocation payments specified in this section shall increase annually at the rate of increase in the Consumer Price Index (CPI) for All Items for All Urban Consumers for the San Francisco-Oakland-San Jose Area for the preceding calendar year, as that data is made available by the United States Department of Labor.

C. Time of Payment. The relocation fee shall be paid to any tenant who vacates the apartment unit at the time he or she vacates.

(Ord. No. 355, § 1(Exh. 1), 7-3-2012)