Article 9 — CONVERSIONS

The Sections of this Article 9 modify the applicable provisions of Article 3 through 8, inclusive, of this Code in the case of Conversions.

SEC. 1380.1. UNITS LEGALIZED PURSUANT TO PLANNING CODE SECTION 207.3.

Notwithstanding any other provisions of this Code, a dwelling unit constructed without benefit of permit and legalized pursuant to the provisions of Section 207.3 of the Planning Code may not be subdivided in a manner that would allow for the unit to be sold or separately financed pursuant to any condominium plan, housing cooperative, or similar form of separate ownership.

(Added by Ord. 43-14 , File No. 131148, App. 4/17/2014, Eff. 5/17/2014)

(a) Application Packets for Conversions shall contain the following information in addition to that required by previous provisions of this Code:

(1) A building history detailing the date of construction, major uses since construction, major repairs since construction, current ownership of buildings and underlying land, and the proposed ownership upon conversion;

(2) A report of residential record ("3-R Report"), obtained from the Bureau of Building Inspection;

(3) A rental history detailing for each unit the size in square feet, the number of bedrooms, the current or last rental rate, the monthly rental rate for the preceding five years, the monthly vacancy over the preceding three years, and the names of the current tenant or tenants for each unit, including the names of all tenants aged 62 or older or permanently disabled who have resided in the building over the past three years to the extent that such information is known or can be made known to the subdivider;

(4) A building condition and sales program report including:

(A) A building inspector's report made by either the Bureau of Building Inspection or a certified engineer or architect acceptable to the Bureau of Building Inspection; with said report to contain any Housing Code violations and incipient or potential deficiencies including electrical, plumbing and boiler and energy conservation requirements; where a building to be converted to condominiums is two years old or less, a Certificate of Completion issued by the Bureau of Building Inspection may be accepted in lieu of a building inspector's report;

(B) A statement of repairs and improvements and projected cost of same the subdivider plans to make before conveyance of the units by the subdivider;

(C) A list of the proposed sales prices for each unit including an indication as to whether the unit will be sold in fee simple or a leasehold interest, the estimated condominium association dues, the rentals if a leasehold interest is proposed, and a statement of the proposed sales program, particularly plans to promote affirmative action in housing; this information to be used to assure compliance with the requirements of this Code and SMA. The sales prices listed for each unit shall remain in effect and shall not be increased by the subdivider until the unit is sold to the tenant or until the tenant has waived his or her right of first refusal and the unit is made available to the general public, provided that the sales price may be increased by the following amounts: (1) The percentage increase in the Housing Component of the "Bay Area Consumer Price Index, U.S. Dept. of Labor," above the price index in existence as of the date the application is filed; and (2) the pro rata actual cost of any repairs or improvements made by the applicant in addition to those set forth in the application, pursuant to Section 1381(a)(4)(B). During this period of time, any

reduction in price of any one unit from the price level indicated on the statement shall not be made without comparable reductions to the prices of all other units;

(D) A summary of tenant contacts including all meetings held with tenants and all information provided to them about the project and their own options; a list of all tenants who have expressed a desire to buy their own units; proposed methods of dealing with those tenants who do not plan to buy, especially those aged 62 or older, the permanently disabled and families with children; and any proposed program for relocation services;

• (5) The survey information obtained pursuant to Section 1388 of this Code and as further required in the Subdivision Regulations;

• (6) Notice to tenants:

(A) Within five days of filing an application with the Department of Public Works for condominium conversion subdivision, the subdivider shall give written notice concerning the proposed conversion to all lessees and tenants. If five or more units are involved, said notice shall advise all lessees and tenants that a public hearing concerning the application for conversion will be held and that notice of said hearing will be given to all lessees and tenants by the City Planning Commission. Said notice shall contain all the information as required in Subsections 4 and 8 of this Section. Said notice shall contain a description of the rights of tenants as herein provided, including the right of first refusal to purchase the unit, the right to attend and be heard at the public hearing, the right to receive relocation assistance and benefits, the right of all tenants to extend occupancy for a period of from one to three years depending upon length of prior occupancy, the right of elderly and disabled tenants to a lifetime lease, and the prohibition against rent increases during the process of conversion;

• (B) Notice of the proposed conversion must be given to all persons or parties who lease or reside in any units which are proposed for conversion subsequent to approval of the application for conversion;

• (C) The application packet for conversion shall include a statement that such notice has been given, and will

continue to be given to any lessees or tenants subsequent to the submission of the application packet for conversion;

• (7) A copy of the purchase agreement to be used for the project;

• (8) Copies of all management documents submitted to the California State Department of Real Estate.

• (b) When neither new buildings nor major additions to existing facilities are indicated in the Tentative Map, a Statement of Known Soil and Geologic Conditions may be substituted for the required Soil and Geologic

Reconnaissance Report. Said Statement shall be prepared by the engineer or surveyor who prepares the Tentative Map and shall contain the following information as taken from the latest U.S. Geologic Maps:

• (1) Soil deposits;

• (2) Rock formations;

• (3) Faults;

• (4) Groundwater; and

• (5) Landslides.

(Amended by Ord. 72-82, App. 2/19/82)

(a) Application Packets for Conversions shall have deleted the following information required by provisions of this Code:

(1) Except as otherwise required by other Sections of this Article 9, the statements required by Sections 1323(a), paragraphs 1, 2, and 3 shall be deleted.

(2) Except in the case of a vesting tentative map, the environmental evaluation data required by Section 1323(b) shall be deleted.

(Amended by Ord. 576-85, App. 12/27/85)

As a condition of Final Map approval, the subdivider must demonstrate that all applicable provisions of the City's Housing, Building and City Planning Codes have been met and that all violations of such codes have been satisfactorily corrected or, upon the approval of the Director, and prior to recordation of the Final Map or Parcel Map, funds have been adequately escrowed or bonded to assure completion of such corrective work prior to the closing of escrow of any unit in the project.

The provisions of this Section and its application to certain properties may be affected by amendments creating Section 1344. Please consult Section 1344 in addition to this Section for Units subject to the Below Market Rate Condominium Conversion Program.

The Department of City Planning shall determine whether any units to be converted are part of the City's low and moderate income housing stocks. If the Department of City Planning determines that any unit to be converted is part of the City's low or moderate income housing stocks, then the price of the unit upon conversion shall not be such as to remove if effectively from said low or moderate income housing stocks and shall be no greater than 2.5 times the highest income level for low and moderate income households as defined in Section 1309(e) and (f), and as adjusted for household size according to the size of the dwelling, as set forth in Sections 1309(1) and (m). The resulting sales prices established pursuant to this formula may be increased consistent with any increases in the housing component of the "Bay Area Cost of Living Index, U.S. Dept. of Labor," during the period between the most recent establishment of the above highest income levels and the date of commencement of sales. If the tenant does not exercise the contract right to purchase the unit which has been determined to be part of the low or moderate income housing stock, then the unit shall be made available exclusively for purchase by qualified households of low or moderate income on firstcome, first-served basis for a period of not less than 12 months from the date of the decision by the tenant not to exercise the contract right to purchase or, if there is no tenant, from the date of issuance of the State Department of Real Estate Final Subdivision Public Report, at a price no greater than that allowed under the low and moderate income price guidelines set forth above. Priority, however, shall be given to low or moderate income households who can demonstrate that they had previously relocated from a dwelling in a building which has been approved for condominium conversion. The alternatives for low and moderate income occupancy set forth in Section 1341 shall not apply, except for those additional number of units which may be required pursuant to Section 1341(a) to be made available for rental or for purchase by households of low or moderate income. In cases where no low or moderate income household has purchased or contracted to purchase such unit within this 12-month period, after good-faith efforts by the subdivider, the subdivider may offer the unit to the general public with no price limitation. (Amended by Ord. 45-82, App. 2/11/82; Ord. 257-88, App. 6/22/88; Ord. 320-08, File No. 080520, App. 12/19/2008)

SEC. 1385A. SUSPENSION OF PROVISIONS OF SECTION 1385.

(1) The provisions of Section 1385 shall not apply to applications for initial conversion of residential units filed on or after June 1, 1988. For purposes of this Section initial conversion shall mean the first time the parcel containing the subject units is converted to condominiums.

(2) The suspension of Section 1385 shall continue so long as the 200 unit annual conversion limit set forth in Section 1396 remains in effect.

(Added by Ord. 257-88, App. 6/22/88)

When the City Planning Commission determines that vacancies in the project have been increased, or elderly or permanently disabled tenants displaced or discriminated against in leasing units, or evictions have occurred for the purpose of preparing the building for conversion, or if rents in the project over the previous 18 months preceding the date of filing the application have been increased substantially greater than any increase in the residential rent component of the "Bay Area Cost of Living Index, U.S. Dept. of Labor," (except for increases reasonably related to construction of Code-required capital improvements directly related to Code enforcement, or to recoup the costs thereof), or when the City Planning Commission determines that the subdivider has knowingly submitted incorrect information (to mislead or misdirect efforts by agencies of the City and County of San Francisco in the administration of this Code), the Tentative Map shall be disapproved and the subdivider may not reapply for 18 months from the date of denial. In evaluation of the current vacancy level under this Section, the increase in rental rates for each unit over the preceding five years and the average monthly vacancy rate for the project over the preceding three years shall be considered. In the evaluation of displacement of elderly tenants any such displacements over the preceding three years, and the reasons therefor, shall be considered.

(Amended by Ord. 86-81, App. 2/20/81)

(a) The present tenant or tenants at the date of filing of the application for a Tentative Map of any unit to be converted or, in the event of a voluntary vacation, or eviction for cause, the tenant or tenants in occupancy at the date of issuance of the State Department of Real Estate's Final Subdivision Public Report shall be given a nontransferable contract right to purchase the unit occupied at a price no greater than the price offered to the general public.

(b) The right of contract for purchase of the unit shall extend for 60 days from the date the unit is initially offered to the tenant in writing by the subdivider. The period of acceptance of the offer may be extended if such an agreement is executed in writing by the subdivider and tenant, provided that the tenant may cancel the purchase agreement if the unit is not conveyed to that tenant within six months of the agreement to purchase.

(c) The offer of sale may not be extended by the subdivider to the tenant until the recordation of the Final Map or Parcel Map, and until the issuance of the State Department of Real Estate's Final Subdivision Public Report.

No application for conversion shall be approved unless there are substantial numbers of tenants who have indicated their intent to purchase their rental unit. This intent shall be evidenced by the submittal in writing by no less than 40 percent of the tenants of intent to purchase forms, as provided by the Department of Public Works. In obtaining or soliciting intent to purchase forms from tenants, subdividers shall comply with any restrictions set forth in the California Business and Professions Code and Regulations of the Real Estate Commissioner. In calculating the total number of units necessary to satisfy this provision, there shall be included in the 40 percent requirement any units in which the occupant qualified for and has expressed an intent to obtain a renewable lifetime lease pursuant to Section 1391(c).

Any tenant intent to purchase forms obtained by way of an inducement of the subdivider to provide benefits to that tenant beyond those established by the Code shall be so identified and the specific representations of the subdivider shall be set forth in detail. All such intent to purchase forms shall become a matter of public record and the subdivider shall be required to comply with his or her representations as conditions of approval.

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.

(Amended by Ord. 161-01, File No. 010891, App. 7/9/2001; Ord. 281-04, File No. 041353, App. 12/1/2004)

If temporary relocation of any tenant is necessary for renovation of a unit between the date of submission of the Tentative Map and the date established for permanent relocation, then the subdivider shall find equivalent substitute housing for that tenant for the period of renovation, and shall pay to that tenant any additional cost of the substitute housing. 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 as provided in this Code.

The rent to tenants at the time of filing the application for conversion shall not be increased for the period between the filing of the application until relocation takes place or until the subdivision is denied or withdrawn, except that such period shall not exceed two years. At the end of such period, and for one-year period thereafter, any increase in rent shall not exceed the proportionate increase in the residential rent component of the "Bay Area Cost of Living Index, U.S. Dept. of Labor," over that period of time, provided, that the rental increase provisions of this section shall be operative only in the absence of other rent increase or arbitration laws. In cases of hardship due to unusual circumstances to the subdivider, or in cases where a rent increase authorized herein is considered by the tenant to be not consistent with increases in the residential rent component of the "Bay Area Cost of Living Index, U.S. Dept. of Labor," either a subdivider or a tenant may request relief under this Section from the Director of Public Works or his or her designee. In considering the reasonableness of a rent increase, the Director shall consider the current rent paid for comparable units in comparable areas.

(a) Except for tenants availing themselves of the lease option set forth below, each nonpurchasing tenant shall be given 120 days from the date of receipt of notification from the subdivider of the intent to convert (as required in California Government Code Section 60427.1) to find substitute housing and to relocate. The subdivider shall not transmit such notice, however, prior to recordation of the Final Map or Parcel Map. If any tenant has a lease to occupy a unit in which the term of said lease extends longer than the 120-day period provided herein, such tenant shall not be evicted except for cause until the expiration of such lease.

Each nonpurchasing tenant shall be given the option of entering into or renewing a lease agreement to occupy said tenant's dwelling unit for period of up to one year following the date of approval of the Final Map; the rental charge and rights and obligations of the parties during said period shall be in accordance with Subsection (c) of this Section. (b) Upon expiration of all such time requirements and upon satisfaction of any conditions required for conformity with the Master Plan, including the recordation of the Final Map or Parcel Map, the tenant shall also be entitled to the statutory period for notice of eviction as provided in California Civil Code Section 1946.

This provision shall not affect the requirement that a tenant receive relocation services and reimbursements for moving expenses provided that the tenant request and be eligible for said services as provided in Section 1392 and Section 1393, and provided that the time for relocation assistance not extend beyond the 120-day period of the notice of intent to convert or any lease extension as required in Subsection (a) of this Section.

equirement that a tenant receive relocation services and reimbursements for moving expenses provided that the tenant request and be eligible for said services as provided in Section 1392 and Section 1393, and provided that the time for relocation assistance not extend beyond the 120-day period of the notice of intent to convert or any lease extension as required in Subsection (a) of this Section.

(c) No subdivider or subsequent condominium unit owner shall refuse to renew a lease or extend a rental agreement to any nonpurchasing tenant aged 62 or older at the time of recordation; of the Final Map or Parcel Map, or any tenant permanently disabled. Any extended leases or rental agreements made pursuant hereto shall expire only upon the death or demise of such tenant or the last surviving member of the tenant's household, provided such surviving member is related to the tenant by blood or marriage and is aged 62 or older at the time of death or demise of such tenant, or at such time as the tenant voluntarily vacates the unit after giving due notice of such intent to vacate. Each lease shall contain a provision allowing the tenant to terminate the lease and vacate the unit upon 30 days' notice. Rent charged during the term of any extended lease or rental agreement pursuant to the provisions of this Section shall not exceed the rent charged at the time of filing of the application for conversion, plus any increases proportionate to the increases in the residential rent component of the "Bay Area Cost of Living Index, U.S. Dept. of Labor," provided that the rental increase provisions of this Section shall be operative only in the absence of other applicable rent increase or arbitration laws. This Section shall not alter or abridge the rights or obligations of the parties in performance of their covenants, including but not limited to the provision of services, payment of rent or the obligations imposed by Sections 1941, 1941.1 and 1941.2 of the California Civil Code. There shall be no decrease in dwelling unit maintenance or other services historically provided to such units and such tenants.

(a) The subdivider shall bear the cost of moving expenses of any tenant who relocates from the building to be converted. The tenant, at his or her option, shall be reimbursed either for the actual moving expenses up to a maximum of $1,000, or for the fixed amount allowed by the moving expense schedule of the Central Relocation Services agency. In the event the unit is occupied by a subtenant under an agreement with the tenant, the moving expense reimbursement herein provided shall be shared proportionately by both parties in relation to the actual costs of moving the property of each party.

(b) Availability for such assistance shall be limited to the 120-day period or the period of any lease extension as provided in Section 1391(a) unless a contrary agreement is reached by the subdivider and tenant; provided that tenants aged 62 years or older, or permanently disabled whose tenancy is extended pursuant to Section 1391(c), would be eligible for such assistance at such time that such tenant elects to voluntarily vacate the unit and gives due notice therefor.

(c) Those parties who lease a unit subsequent to the date of filing the application for conversion shall not be eligible to receive assistance provided in this Section unless such an agreement is made between the subdivider and prospective tenant.

(a) Any tenant who requests assistance in finding relocation housing shall be referred to the Central Relocations Services Agency of the City and County of San Francisco, or, with the mutual consent of the tenant and subdivider, such assistance may be provided by the subdivider or a real estate brokerage firm selected by the subdivider. The subdivider shall bear any costs to the tenant of such assistance in finding relocation housing.

(b) Availability for such assistance shall be limited to the expiration of the 120-day period or the period of any lease as provided in Section 1391(a) and (c), unless a contrary agreement is reached by the subdivider and tenant.

(c) Those parties who lease a unit subsequent to the date of filing the application for conversion shall not be eligible to receive assistance provided in this Section unless such an agreement is made between the subdivider and prospective tenant.

(a) In the event an application for condominium conversion subdivision is withdrawn by the applicant, said application may not be resubmitted for six months from the date of withdrawal.

(b) In the event an application for condominium conversion subdivision is denied, or a Tentative Map is disapproved, the applicant therefor may not submit a new application for the same building for one year from the date of such denial, except that this period may be extended pursuant to the provisions of Section 1386.

All units approved for conversion shall be offered for sale to the tenants within one year of the issuance of the State Department of Real Estate's Final Subdivision Public Report.

(a) This Section governing annual limitation shall apply only to conversion of residential units. This Section also is subject to the limitations established by Section 1396.5's suspension of the lottery.

(b) Applications for conversion of residential units, whether vacant or occupied, shall not be accepted by the Department of Public Works, except that a maximum of 200 units as selected yearly by lottery by the Department of Public Works from all eligible applicants, may be approved for conversion per year for the following categories of buildings:

(1) Buildings consisting of four units in which at least three of the units have been occupied continuously by the applicant owners of record as their principal place of residence for three years prior to the date of registration for the lottery as selected by the Director;

(2) Buildings consisting of three units in which at least two of the units have been occupied continuously by the applicant owners of record as their principal place of residence for three years prior to the date of registration for the lottery as selected by the Director;

(3) Buildings consisting of two units in which at least one unit has been occupied continuously by the applicant owner of record as his or her principal place of residence for three years prior to the date of registration for the lottery as selected by the Director;

(4) Buildings consisting of five or six units that were subject to the requirements of Section 1396.2(f) on or before April 15, 2013 where (A) no further evictions as set forth in Section 1396.2 have occurred in the building after April 15, 2013, (B) the building and all applicants first satisfied all the requirements for conversion under Section 1396.2(f) after January 24, 2020 and before resumption of the lottery under Section 1396.5; and (C) 50 percent or more of the units have been occupied continuously by owners of record as their principal place of residence for ten years prior to the date of registration for the lottery as selected by the Director. Applicants for such buildings must apply for the lottery within five years of the resumption of the lottery under Section 1396.5(c) and remain eligible until selected;

1396.5; and (C) 50 percent or more of the units have been occupied continuously by owners of record as their principal place of residence for ten years prior to the date of registration for the lottery as selected by the Director. Applicants for such buildings must apply for the lottery within five years of the resumption of the lottery under Section 1396.5(c) and remain eligible until selected;

(5) If the Expedited Conversion program under Section 1396.4 has been suspended until 2024 as a result of a successful lawsuit against the City and County of San Francisco challenging Section 1396.4(g) or 1396.5: (A) buildings consisting of five or six units that participated in but were not selected for the 2012 or 2013 condominium conversion lottery in which 50 percent or more of the units have been occupied continuously by the applicant owners of record for no less than six years prior to the date of registration for the lottery as selected by the Director or (B) buildings consisting of five or six units in which: (i) 50 percent or more of the units have been occupied continuously by the applicant owners of record for no less than six years prior to the date of registration for the lottery as selected by the Director and (ii) the eligible applicant owners of record have a fully executed written agreement as of April 15,

2013 in which the owners each have an exclusive right of occupancy to individual units in the building to the exclusion of the owners of the other units. Applicants for buildings identified in this Subsection must first apply for the lottery within five years of the resumption of the lottery under Section 1396.5(c) and remain eligible until selected;

or

(6) Community apartments as defined in Section 1308 of this Code, which, on or before December 31, 1982, met the criteria for community apartments in Section 1308 of this Code and which were approved as a subdivision by the Department of Public Works on or before December 31, 1982, and where 75 percent of the units have been occupied continuously by the applicant owners of record for three years prior to the date of registration for the lottery as selected by the Director.

(c) The conversion of a stock cooperative as defined in Section 1308 of this Code to condominiums shall be exempt from the annual limitation imposed on the number of conversions in this Section and from the requirement to be selected by lottery where 75 percent of the units have been occupied for the lottery as selected by the Director.

(d) No application for conversion of a residential building submitted by a registrant shall be approved by the Department of Public Works to fill the unused portion of the 200-unit annual limitation for the previous year.

(e) (1) Any application for a condominium conversion submitted after being selected in the lottery must meet the following requirements applicable to Subdivision Code Article 9, Conversions: Sections 1381, 1382, 1383, 1386, 1387, 1388, 1389, 1390, 1391(a) and (b), 1392, 1393, 1394, and 1395.

(2) Any building subject to Section 1396.2 shall have all applicant(s) satisfy all the requirements for conversion under Section 1396.2(f) in order be eligible to convert pursuant to this Section 1396; provided, however, that any building subject to the prohibition on conversion under Section 1396.2, in particular a property with the eviction(s) set forth in Section 1396.2(b), is ineligible for conversion.

(3) (A) In addition, the applicant(s) shall certify that to the extent any tenant vacated his or her unit within the seven years prior to the date of registration for the lottery as selected by the Director and before recordation of the final parcel or subdivision map, such tenant did so voluntarily or if an eviction or eviction notice occurred it was not pursuant to Administrative Code Sections 37.9(a)(8)-(14) unless such eviction or eviction notice complied with the requirements of Subsections (B)-(D) below.

(B) If the evicting owner(s) recovered possession of the unit under Administrative Code Sections 37.9(a)(11) or 37.9(a)(14), then the applicant(s) shall certify that the original tenant reoccupied or was given an opportunity to reoccupy the unit after the temporary eviction.

(C) If the evicting owner(s) recovered possession of the unit under Administrative Code Section 37.9(a)(10), then the applicant(s) shall certify that the Department of Building Inspection required the unit be demolished or permanently removed from housing use pursuant to a Notice of Violation or Emergency Order or similar notice, order, or act; all the necessary permits for demolition or removal were obtained; that the evicting owner(s) complied in full with Administrative Code Section 37.9(a)(10) and (c); and that an additional unit or replacement unit was not constructed in the building after the demolition or removal of the unit previously occupied by the evicted tenant.

(D) If the evicting owner(s) recovered possession of a unit under Administrative Code Section 37.9(a)(8), then the applicants shall certify that: (i) only one unit in the building was the subject of such eviction during the seven year period, (ii) any surviving owner or relative named as the intended resident of the unit in the Section 37.9(a)(8) eviction notice also is presently an owner applying for the conversion of the same unit, and (iii) the subject applicant owner has occupied the unit continuously as his or her principal residence for three years prior to the date of registration for the lottery as selected by the Director.

(4) Notwithstanding any provisions in this Code to the contrary, the Department of Public Works shall not sell residential condominium conversion lottery tickets to, shall not accept a residential condominium conversion subdivision application from, and shall deny a tentative or final subdivision or parcel map for residential condominium

conversion submitted by the owner(s) of a building if on or after October 31, 2014, (A) a senior, disabled, or catastrophically ill tenant in the building entered into a Buyout Agreement, as defined in Administrative Code Section 37.9E, for any unit in the building, or (B) two or more tenants entered into Buyout Agreements during the period beginning ten years prior to the date of the application and ending on the date of the final or parcel map approval. This Subsection (e)(4) shall apply without regard to whether the current owner(s) was a party to the Buyout Agreement, provided that the Buyout Agreement was reported to the Rent Board as provided in Administrative Code Section 37.9E prior to the current owner(s) purchasing the building. For purposes of this subsection, a "senior" shall be a person who is 60 years or older and has been residing in the unit for ten years or more at the time of Buyout Agreement; a "disabled" tenant shall be a person who is disabled within the meaning of Title 42 United States Code Section 12102 and has been residing in the unit for ten years or more at the time of Buyout Agreement; and a "catastrophically ill" tenant shall be a person who is disabled within the meaning of Title 42 United States Code Section 12102 and who is suffering from a life threatening illness as certified by his or her primary care physician and has been residing in the unit for five years or more at the time of Buyout Agreement.

(f) The Department shall review all available records, including eviction notices and records maintained by the Rent Board for compliance with Subsection (e). If the Department finds that a violation of Subsection (e) occurred prior to recordation of the final map or final parcel map, the Department shall disapprove the application or subject map. If the Department finds that a violation of Subsection (e) occurred after recordation of the final map or parcel map, the Department shall take such actions as are available and within its authority to address the violation. (Amended by Ord. 498-85, App. 11/15/85; Ord. 426-89, App. 11/22/89; Ord. 418-93, App. 12/23/93; Ord. 434-97, App. 11/25/97; Ord. 372-98, App. 12/18/98; Ord. 161-01, File No. 010891, App. 7/9/2001; Ord. 48-03, File No. 030099, App. 4/3/2003; Ord. 281-04, File No. 041353, App. 12/1/2004; Ord. 6-07, File No. 061519, App. 1/18/2007; Ord. 238-08, File No. 081087, App. 10/30/2008; Ord. 117-13 , File No. 120669, Pass. 6/18/2013; Ord. 225-14 , File No. 140874, Eff. 12/7/2014, Oper. 3/7/2015)

The availability of low and moderate income housing shall be reviewed every two years by the Department of City Planning and the results of this review shall be included in the Department of City Planning's "Residence Element Update" which is submitted to the Board of Supervisors.

(Added by Ord. 257-88, App. 6/22/88)

(a) The conversion of a stock cooperative, as defined in Section 11003.2 of the Business and Professions Code, to a condominium, as defined in Section 783 of the Civil Code, is exempt from the provisions of this Code, including, but not limited to, any annual limitation imposed on the number of conversions to condominiums set forth in Section 1396, upon issuance of a Certificate of Exemption pursuant to this Section, but only if the following requirements are met:

(1) At least 51 percent of the units in the cooperative were occupied by stockholders of the cooperative on January 1, 1981, or individually owned by stockholders of the cooperative on January 1, 1981. As used in this paragraph a cooperative unit is "individually owned" if and only if the stockholder of such unit owns or partially owns an interest in no more than one unit in the cooperative; and

(2) No more that 25 percent of the shares of the cooperative were owned by any one person, as defined in Section 17, including an incorporator or director of the cooperative, on January 1, 1981.

(b) In addition to notice requirements hereafter provided, each tenant of a unit in a stock cooperative that is converting to condominiums shall have the nontransferable right (i) to contract for the purchase of the 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, which right shall run for a period of not less than 90 days from the date of issuance of the subdivision public report pursuant to Business and Professions Code Section 11018.2 where the building to be converted consists of five or more units, or from the date of issuance of a Certificate of Exemption in the case where the building to be converted consists of four units or less; or (ii) to receive moving expenses, up to a maximum of $1,000, which right shall extend for 120 days from the date of issuance of a Certificate of Exemption; or (iii) to enter into a one-year lease of the unit; or (iv) as to tenants aged 62 years or older or permanently disabled, to enter into a lease under the terms and conditions set forth in Section 1391(c) of this Code.

(c) Applications for a Certificate of Exemption shall be filed with the Department of Public Works and shall contain the following information, based on a declaration under penalty of perjury executed by the applicant that the information provided is, to the best of the applicant's knowledge, correct:

(1) A copy of a report of residential record ("3-R Report") obtained from the Bureau of Building Inspection showing the type of building and the number of units;

• (2) The name and mailing address of the occupant of each unit;

• (3) Identification of any occupant who is a tenant; for purposes of this Section, a "tenant" is a person other than a shareholder of the stock cooperative who rents or leases a unit in a stock cooperative;

(4) Verification under penalty of perjury by each non-tenant occupant of a unit that he or she is one of the share owners of a stock cooperative, along with documentary proof of that status in a form acceptable to the Director.

• (5) Information showing that the applicant meets the requirements for exemption under Section 66412(h)(1) and (2) of the SMA.

(6) Certification that the applicant has provided written notice to every tenant of (i) the applicant's intent to convert to condominiums; and (ii) the applicant's intent to seek the exemption provided herein; and (iii) the rights afforded tenants of stock cooperatives that convert to condominiums pursuant to this Section. The applicant shall also submit a copy of the notice provided to the tenants and the date that it was so provided.

(7) Certification that the applicant (i) will give, prior to issuance of the Certificate of Exemption, written notice to each person applying for rental of a unit in the building of the tenant rights described in Subsection (4), which notice shall be given prior to acceptance of any rent or deposit from the prospective tenant; and (ii) will give written notice to all tenants that an application for a public report has been submitted to the Department of Real Estate at least 10 days before its submission where the building to be converted consists of five or more units; and (iii) will not terminate any tenancy because of a conversion or proposed conversion without 180 days' written notice to the tenant. Failure to comply with Subsection (i) of this Section will make the applicant subject to payment to the tenant of moving expenses and rent as provided in Government Code Section 66452.8.

The applicant shall also provide stamped envelopes addressed to the occupant of every unit in the stock cooperative. Such stamped and self-addressed envelopes shall be furnished to the Department of Public Works at the time of the filing of the application for a Certificate of Exemption.

(d) The Director shall determine whether the applicant has met the requirements for exemption set forth in Section 66412(h)(1) and (2) of the SMA and whether a parcel or final map was approved by the Legislative Body of the City and County of San Francisco. If it is determined that these requirements are not met or that a parcel or final map was so approved, the Director shall deny the application.

(e) If the Director determines that an application meets all the requirements described in Subsection (c), that officer shall take the following action:

(i) If the applicant has certified that no tenants reside in any of the units, a notice shall be sent to each occupant of the building setting forth the rights of tenants of stock cooperatives that convert to condominiums and stating that the Department intends to issue the applicant a Certificate of Exemption for conversion to condominiums on the grounds that the applicant meets the requirements of Section 66412(h) of the SMA and that no tenants are occupying any of the units in the building. It shall also state that the Certificate of Exemption will be issued within 30 days if no request is made for a hearing to dispute the validity of that action. Upon receipt of a written request, the Director or a designee shall conduct a hearing, after providing notice to the applicant and all occupants of the units, in order to determine whether the Certificate of Exemption should be issued and whether tenant rights have been provided as required herein. If no request for a hearing is made within 30 days of the mailing of such notice, the Director shall issue the Certificate of Exemption.

(ii) If the applicant has certified that one or more tenants occupy any unit in the building, the Director shall set a date by which the applicant must comply with the requirements of this Section governing tenant rights, which date shall be not less than 60 days from the date that the applicant notified the tenants of the intent to convert and of the rights afforded to such tenants, and shall provide written notice of that date to the applicant and each occupant of the building.

(f) On or after the date set by the Director for compliance by the applicant with the requirements regarding tenant rights, the applicant shall provide the Department of Public Works with respect to each tenant one of the following: (i) A contract executed by every owner of the building and the tenant giving the tenant the right to purchase the unit on the terms set forth above in Subsection (b)(i); or

(ii) Written certification by the tenant that the tenant has received money for moving expenses or, in the alternative, a contract between the owner(s) of the building and the tenant in which the owner(s) agree to pay the tenant's moving expenses (which contract may contain a provision that the right to such expenses shall expire after 120 days from the date of issuance of the Certificate of Exemption); or

(iii) A lease executed between the owner(s) of the building and the tenant for either one year or, as to elderly or disabled tenants, on the terms set forth in Section 1391(c) of this Code; or

(iv) A statement by the applicant that the tenant has been offered each of the tenant rights set forth in this subsection, but has failed to exercise any of those rights.

In every contract and lease entered into pursuant to this Section, every owner of the building shall expressly waive the right to assert as a defense to any legal action brought by a tenant for violation of the contract or lease the claim that the contract is unenforceable because it was not based on consideration provided by the tenant.

(g) If the applicant has complied with the requirements of this Section governing tenant rights, the Director shall issue the Certificate of Exemption; provided, however, that if any tenant or occupant of the building disputes the validity of that action on the grounds that tenant rights have not been provided as required herein, the Director of a designee shall conduct a hearing, after providing notice to the applicant and the occupant of each unit, in order to determine whether all such rights have been provided. The Certificate of Exemption shall not be issued unless the Director makes the determination that such rights have been provided.

(h) All decisions of the director made pursuant to this Section are final administrative determinations.

(i) A subdivider, having applied for and been granted a Certificate of Exemption under this Section 1397 and Section 66412(h) of SMA may elect to file a parcel or final map for recordation, in which case such parcel or final map shall be filed with the Department of Public Works for the sole purpose of recordation. Unless the subdivider requests approval of such data by the County Surveyor, it shall bear a certificate on the title sheet of the map, signed by the County Surveyor, certifying that this map is filed under provisions of the Certificate of Exemption procedure for the sole purpose of recordation, and that approval of the technical and engineering data shown thereon is not implied. Such parcel or final map shall be signed by all parties having any record title interest in the real property subdivided. If the map is not signed by all of the stockholders, the person or persons signing shall produce evidence satisfactory to the Director that they are authorized to sign on behalf of the stock cooperative.

(j) A fee of $500 shall be charged for investigating and processing an application for Certificate of Exemption for converting a stock cooperative consisting of four units or less to condominiums and all other costs incidental thereto. A fee of $800 shall be charged for investigating and processing an application for Certificate of Exemption for converting a stock cooperative consisting of five units or more to condominiums and all other costs incidental thereto. (k) A fee of $200 shall be charged for processing and filing a parcel or final map, excluding any recordation fee charged by the Office of the Recorder; provided, however, that if the subdivider requests approval of the technical and engineering data shown on a parcel or final map, the fee shall be the same as that charged for the processing and filing of a condominium map.

(l) Fees charged under Subsections (j) and (k) above shall be payable to the Department of Public Works and shall be paid at the time of filing the application for Certificate of Exemption, or at the time of filing the parcel or final map, whichever is applicable. Said fees shall be nonrefundable.

(m) Funds received under Subsections (j) and (k) above shall be deposited in the Subdivision Fund created by Section 1315(c) of this Code and shall be governed by the provisions specified therein.

(n) Section 1315(b) of this Code shall be applicable to the payment of fees under Section 1397 of said Code as well.

(Added by Ord. 289-85, App. 6/13/85; amended by Ord. 284-04, File No. 041355, App. 12/14/2004)