The Effect of Eviction and Tenant Buyout History on Condominium Conversion Eligibility
Introduction
Under San Francisco’s restrictive condominium conversion laws, a building’s eviction and tenant buyout history can disqualify or delay the building’s eligibility to convert to condominiums. This means that a building that might otherwise be allowed to convert to condominiums, or to enter the condo conversion lottery, might be prevented from doing so because one or more rental tenants was either evicted or paid to move out by the current or prior owner. Unfortunately, several laws enacted at different times restrict condominium conversion based on past evictions and tenant buyouts. In practice, this makes the rules relating to conversion and eviction/buyout history very confusing. Although this article attempts to collect the various laws and relate them to each other, the required analysis remains complex.
If you want to obtain information about the eviction history of a building, contact the SF Rent Board.
Protected Tenants and No-Fault Evictions
To apply the eviction rules, it is helpful to understand two concepts. The first is the concept of the “Protected Tenant”, a term that is used frequently in various San Francisco laws, but actually means different things depending on context. In the world of condominium conversion eligibility, a Protected Tenant is someone who is either: (i) catastrophically ill; (ii) disabled; or (iii) has lived in the property for 10 years, and is 60 years old or older. As explained below, eviction of a Protected Tenant has more serious condominium conversion consequences than eviction of a tenant who is not “Protected”.
The second important concept is the “No-Fault Eviction”. In each of the condo conversion eligibility rules, an eviction is a No-Fault Eviction if the grounds for the eviction stated in the eviction notice was: (i) The owner wanted to move in; (ii) The owner wanted a relative to move in; (iii) The owner wanted to demolish the unit; (iii) The owner wanted the tenant to relocate temporarily so the owner could fix up the unit; (iv) The owner wanted to substantially rehabilitate the unit; or (v) The owner wanted to take the unit off the rental market (an “Ellis Act Eviction”). In certain condo conversion eligibility rules, an eviction for substantial rehabilitation or for lead remediation is also deemed a No-Fault Eviction. As explained below, only No-Fault Evictions affect condo conversion eligibility.
Evictions and Two-Unit Lottery-Bypass Conversions
In general, a building with no more than two residential units can be converted to condominiums after each of the units has been occupied by a separate owner for one year. Buildings that satisfy these conditions bypass the condominium conversion lottery. To determine whether a past eviction might hinder or delay a two-unit bypass conversion, ask the following questions in the following order.
QUESTION 1: Was there a No-Fault Eviction of a Protected Tenant on or after November 16, 2004?
If so, the building cannot use the lottery bypass system to convert unless the Protected Tenant re-occupied the unit from which he/she was evicted.
QUESTION 2: Were there No-Fault Evictions in both units on or after May 1, 2005, where none of those evicted was a “Protected Tenant?
If so, the building cannot use the lottery bypass until each of the units has been occupied by a separate owner for ten years. However, this rule does not apply is the eviction notice was withdrawn before the date when the tenant was required to vacate, and the tenant continued to live in the unit for at least 120 days afterward.
Evictions and Lottery Conversions
The conversion lottery has been suspended at least until 2024. When it returns, a building with 2-4 residential units may enter if all but one of the units have been owner-occupied for three years as of the lottery entry deadline. To determine whether past evictions might hinder or delay a lottery conversion, ask the following questions in the following order.
QUESTION 1: Was there a No-Fault Eviction during the seven years preceding the year the building is entering the lottery?
If so, the general rule is that the building cannot enter the conversion lottery during that year and must wait until eight or more years have passed since the No-Fault Eviction. But there are a few narrow exceptions to this general rule. The most important exception involves owner-move-in and relative-move-in evictions. If, there was only one unit subject to this type of eviction during the seven-year loopback period, and if the owner or relative who moved in has resided in the unit continuously since the eviction, the building will not be disqualified from entering the lottery under this rule (but may still be affected under one of the other rules discussed below).
QUESTION 2: Was there a No-Fault Eviction of a Protected Tenant on or after May 1, 2005?
If so, the building can never be converted to condominiums unless eviction notice was withdrawn before the date when the tenant was required to vacate, and the tenant continued to live in the units for at least 120 days afterward.
QUESTION 3: Were there No-Fault Evictions in two (or more) units on or after May 1, 2005, where none of those evicted was a “Protected Tenant?
If so, the occupancy duration is lengthened from three years to ten years unless eviction notices were withdrawn before the date when the tenants were required to vacate, and the tenants continued to live in the units for at least 120 days afterward.
QUESTION 4: Was there a No-Fault Eviction of a Protected Tenant between January 1, 2000 and April 30, 2005?
If so, the building can never qualify to enter “Pool A” of the condominium conversion lottery, meaning the odds of the building winning the condo conversion lottery will be very low. Note that this rule does not apply if the Protected Tenant re-occupied the unit from which he/she was evicted.
QUESTION 5: Was there a No-Fault Eviction of a Protected Tenant between November 16, 2004 and April 30, 2005?
If so, the building will only be eligible to participate in the condominium lottery after the first 175 units have been selected. In practice, this will keep its odds of winning the lottery below 2%. Again, this rule does not apply if the Protected Tenant re-occupied the unit from which he/she was evicted.
Determining The Date Of An Eviction
In applying the rules relating to eviction history and condominium conversion, it is necessary to determine the date of each eviction that might affect conversion eligibility. Unfortunately, answering this seemingly straightforward question is complicated by wording variations among the three different laws that apply, and DPW’s inconsistency when applying these laws. We recommend that you first obtain a printout of your building’s eviction history from the SF Rent Board, then call our office to discuss your situation.
Tenant Buyout History
A tenant buyout can also affect a building’s eligibility for the condominium conversion lottery. A “tenant buyout” occurs when a tenant agrees to leave voluntarily in exchange for money or other consideration from a building owner. Effective March 2015, all tenant buyouts must be reported to the San Francisco Rent Board, and meet certain other requirements. Any tenant buyout that occurs after October 31, 2014 can disqualify a building from lottery conversion, or delay lottery conversion eligibility. If the buyout involved an elderly (over 60) or disabled person who has resided in the building for 10 years), or if the buyout involved a or catastrophically ill person (regardless of residency duration), the building is permanently disqualified. If the buyout involves tenants in two or more units, none of whom satisfy the “protected” criteria described in the preceding sentence, then the three-year owner-occupancy duration requirement is extended to 10 years.
Learning More
If you need more information about the effect of tenant eviction and buyout history on condominium conversion, please call SirkinLaw APC at 415-738-8545. We would be happy to help you apply these complex rules to your particular situation. If you have more general questions about San Francisco’s condominium conversion rules, pleased consult our comprehensive article entitled San Francisco Condominium Conversion Rules and Process, or by calling our office. Our website also contains a variety of other specialized articles on condominium conversion, as well as the full original texts of the applicable laws and many helpful links.
About the Author
SirkinLaw APC has been guiding clients through San Francisco condominium conversions and subdivisions for more than 30 years, and have completed more SF conversions than any other firm. Over the years, we have been involved in drafting many of the laws that govern SF condominium conversions, and have helped develop many of the procedures used by the San Francisco Department of Public Works (“DPW”) Bureau of Street Use and Mapping (“BSM”). Our breadth of experience makes it likely that if a glitch appears in the condominium conversion process, we will have seen something similar before and know exactly what to do. And for those rare occasions when a completely new issue arises, we are the recognized masters at developing creative solutions that save our clients time and money.
Experience has taught us that the most important things to our clients are the immediate availability of staff to answer client questions and diligence in following the process of governmental approval. To ensure we achieve these goals, we have a full-time team devoted to client contact, preparation of subdivision applications, and monitoring subdivision approvals. Our team maintains a direct-access telephone line and can be reached easily any weekday to discuss the status of a conversion or subdivision process. And for those occasions when you need to speak with an attorney, Rosemarie MacGuinness is committed to being available to you when you call or within the next 24 hours. Rosemarie is known for her diligence in calling clients back quickly, and is more committed than ever to being easily reached.
But while processing the condominium conversion or subdivision quickly and efficiently may be our client’s most immediate priority, the governing documents (the Declaration of Covenants, Conditions and Restrictions, or “CC&Rs” supplemented in some cases by Bylaws and/or Articles) will have much greater long-term impact. The quality of the governing documents will directly affect the quality of life of the owners, as well as their ability to refinance and sell. Andy Sirkin was co-author of 10 editions of The Condominium Bluebook, and his expertise in preparing condominium governing documents is recognized throughout California. SirkinLaw APC governing documents continue to be the ones other firms emulate, and Realtors, lenders and buyers strongly prefer. This leadership results from constant improvement and innovation that makes our documents easier to read and understand, as well as more efficient and less expensive to enforce.
Before you choose a lawyer to handle you condo conversion or new construction subdivision, take a moment to speak with Andy or Rosemarie at SirkinLaw APC. Our practice includes all required City and State applications and filings, as well as preparation of any governing documents you may need. We offer these services on a flat-fee basis, and our rates are generally lower than those of other firms. Contact us via our contact form.
