Condo Conversion Exemption for Renovations or Additions
Introduction
The San Francisco Department of Public Works has “clarified” certain policies regarding San Francisco condominium conversion requirements. One of these “clarifications” amounts to a significant change in past practice.
Building Renovations or Additions: No Condominium Conversion Bypass
The most important change concerns when building additions or renovations are considered significant enough to make the building “new construction”, meaning that subdivision into condominiums will not be considered a “conversion” subject to lottery and owner-occupancy requirements. Past practice had been to review approved plans and, in general, consider the building exempt from lottery and owner-occupancy requirements if new legal units were added and/or the habitable floor area was increased at least 50% outside the building envelope.
Newly Added Units Can Become Condos Immediately
Under DPW’s new policy, building additions or renovations will never allow a building to circumvent “conversion” requirements with regard to units that existed in any form prior to the work. Newly added units may become individual condominiums immediately, but the original units may become condominium units only through the lottery and owner-occupancy system. In practice, this will mean that all of the original units will effectively become one multi-unit condominium unless and until they can be subdivided under the conversion rules. The exact text of the DPW clarification reads:
“With an existing residential building, no addition to the number of units or to the building square footage will qualify the building as New Construction. Newly constructed units added to an existing residential structure may be treated as a new construction parcel or final maps as long as all existing residential units in the existing building remain subject to Article 9 and all other applicable Subdivision Code requirements.”
Split of Building Will Not Speed Condo Conversion Eligibility
The San Francisco Department of Public Works also clarified that it “will not allow further subdivisions of the same property (or contiguous properties) in any manner that can be construed as avoidance of the State Subdivision Map Act or the CCSF Subdivision Code”. This means, for example, that when a four-unit property is subdivided into two condominiums each consisting of two dwellings, neither of these two-unit condos can be re-subdivided under two-unit bypass rules.
