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CITY ELIGIBILITY: SAN FRANCISCO - OAKLAND - BAY AREA - CALIFORNIA
The rules and regulations governing condo conversions are complicated and vary widely depending on the city, county, and state in which the property is located (including town and charter). Even different neighborhoods within the same community may have different rules related to condo conversions. And many of these regulations are subject to change at any time.
Local regulations may vary in terms of the type of protections offered to renters, the number of units that can be converted each year, and the approval process itself. There are inspections to contend with, timelines to comply with, and eligibility requirements related to eviction history, tenant rights, and rent control to consider. And, of course, market conditions vary widely from one city to the next, and one neighborhood to the next.
The bottom line is EVERY property is unique and no two projects have the exact same requirements. Each project must be evaluated individually in light of current local, county, and state regulations.
Even savvy real estate developers and investors find condo conversion a daunting process without an expert familiar with the farrago of regulations to guide them.
Other Bay Area cities vary and have less stringent regulations and conversions can be done right away. Here is a brief overview of the different condo conversion rules in San Francisco and Oakland:
Condo conversion laws in San Francisco are extremely complicated and have recently been revised — and some of these changes are being phased in over several years. Which units are eligible to convert depends on several factors, including the type and size of the building, whether the unit is occupied by an owner or a renter, and the eviction history of the building.
Until recently, residential property owners who wanted to convert their building to condos had to enter an annual city-run lottery. However, only 200 units were selected each year and everyone else had to wait until the next year to test their luck. As a result, some applicants were forced to wait 10 or more years to convert — and some were never selected.
In 2013, San Francisco suspended the condo conversion lottery until at least 2024. In its place, the city adopted an “Expedited Conversion Program” (ECP) to help address the backlog of TICs waiting to be converted to condos. Under the ECP, existing apartment or mixed-use buildings with more than six residential units cannot be converted. In 2017, buildings with non-owning tenants was suspended and excluded from the program (effects are dependent on applications submitted prior to June 27, 2017).
However, the condo conversion "two-unit conversion bypass" rules for existing buildings are not affected by anything in the ECP. As a result, they are more flexible and have shorter waiting times for owner eligibility and not imposed impact fees.
Moreover, the revised rules do not affect existing commercial buildings, which some can still be converted into commercial condominiums that can be individually sold.
All buildings in Oakland can be converted to condominiums whether or not the property owner resides in the property, but the regulations vary depending whether or not the building is located in an “impact area.”
Disclaimer: The rules and regulations governing condo conversions are subject to change at any time at the discretion of city, county, and state officials.
WHITE TIGER teams with leading legal experts experienced in the condo conversion process to guide you through the tangle of laws and regulations