Chapter 16.68 CONDOMINIUM AND COMMUNITY APARTMENT CONVERSIONS

A. This chapter is enacted to establish requirements and procedures for the control and approval of conversion of existing multifamily rental housing and nonresidential structures to residential condominium and community apartment projects. By their unique character and requirements, conversions differ specifically from other subdivisions and apartments. The unique status of such projects tends to magnify the effects associated with higher urban densities to a point where public health, safety, welfare, and economic prosperity of the city of Capitola are significantly affected. Such projects may conflict with the policy of the city as set forth in the general plan to provide a reasonable balance of rental and ownership housing within the city, to provide a variety of individual choices of tenure, type, price, and location of housing and to maintain the supply of rental housing for low and moderate income persons and families.

B. To insure that such problems are avoided in both the short and long term, it is the express intent of the city to treat such projects differently from multiple-family dwellings or other projects which are not residential condominium or community apartment projects and to establish rules and standards thereto regulating the conversion to residential condominium or community apartment projects in the city.

C. This chapter is enacted to insure that proposed conversions are approved consistent with policies and objectives of the city, particularly as follows:

1. To make adequate provisions for the housing needs of all economic segments of the community;

2. To facilitate inhabitant ownership of residential units while recognizing the need for maintaining adequate rental housing inventories;

3. To provide a reasonable balance of rental and ownership housing;

4. To inform prospective conversion purchasers regarding the physical conditions of the structure offered for purchase. (Ord. 460 (part), 1979)

16.68.020 Compliance with Government Code.

A. The city shall comply with Government Code Section 66427.1 in its present form and as hereafter amended.

B. The city shall comply with Government Code Section 66427.2 in its present form and as hereafter amended. This section provides in abbreviated form that without general or specific plan provision containing definite objectives, the city may not reject condominium conversions for failure to comply with the general plan or on the basis of one of the Government Code Section 66474 findings, justifying disapproval. Reference should be made to the full statute for particulars. (Ord. 460 §§ 1.1 and 1.2, 1979)

16.68.030 Definitions.

For the purpose of this section, certain words and phrases are defined and certain provisions shall be construed as set forth in this section unless it is apparent from their context that a different meaning is intended.

A. “Association” is the organization of persons who own a condominium unit or right of exclusive occupancy in a community apartment.

B. “Common area” is an entire project excepting all units therein.

C. “Community apartment or stock cooperative” is an estate in real property consisting of an undivided interest in common in a parcel of real property and the improvements therein coupled with the right of exclusive occupancy for residential purposes of an apartment located thereon. All references to a “condominium” in this chapter shall be deemed to refer to a condominium, community apartment, and stock cooperative, except where specifically noted.

D. “Condominium” is an estate in real property consisting of an undivided interest in common in a portion of a parcel or real property together with a separate interest in space in a residential, industrial, or commercial building on such real property, such as an apartment, office, or store. A condominium may include, in addition, a separate interest in other portions of such real property.

E. “Conversion” is a change in the type of ownership of a parcel or parcels of land, together with the existing attached structures, to that defined for a condominium project regardless of the present or prior use of such land and structures and whether substantial improvements have been made or are to be made to such structures.

F. “Developer” is the owner or subdivider with a controlling proprietary interest in the proposed project.

G. “Low and moderate income” means those income levels as defined by AMBAG in the Housing Opportunity Plan dated January, 1978, and as updated to reflect current income levels.

H. “Organizational documents” are the declaration of covenants, conditions and restrictions, articles of incorporation, bylaws, and any contracts for the maintenance, management, or operation of all or part of the project.

I. “Project” is a residential condominium project or a community apartment project.

J. “Recreational open space” is an open space on the project (exclusive of the required front setback area) which shall be used exclusively for leisure and recreational purposes, for the use and enjoyment of occupants (and their visitors) of units on the project and to which such occupants (and their visitors) shall have the right of use and enjoyment. Accessory structures such as swimming pools, recreational buildings, and landscaped areas may be included as open space.

K. A “residential condominium project” is the conversion of an existing structure to a condominium containing five or more condominiums for residential purposes.

L. “Unit” is the element of a residential condominium project which is not owned in common with the owners of other condominiums in project or is an apartment in a community apartment project to which an owner of an undivided interest in common or community apartment project has a right of exclusive occupancy. (Ord. 460 §§ 2.1 – 2.13, 1979)

16.68.040 Conditional use permit and subdivision map required.

A. No conversion to a project shall be permitted in any district unless a conditional use permit and subsequent final map have been applied for and granted pursuant to this chapter and other applicable state and local ordinances regulating use permit and subdivision approvals.

B. In no case shall a unit be converted that was built (final inspections) prior to January 1, 1970.

C. No building for which a building permit was issued after the effective date of the ordinance codified in this chapter may thereafter be converted to a condominium unless, prior to the issuance of the building permit, the project was one for which there was an approved tentative condominium subdivision map. (Ord. 460 § 3.1, 1979)

16.68.050 Contents of application for conditional use permit for conversion of condominium or community apartments.

The application for a conditional use permit for conversion shall include the following information:

A. A detailed description of the project proposal to include applicant’s provisions for meeting the standards set forth in Sections 16.68.100 through 16.68.190;

B. A preliminary site plan showing all existing proposed improvements (to include designated open-space areas);

C. A detailed analysis establishing the criteria set forth in the housing element of the city’s general plan, and Section 16.68.290;

D. Makeup of existing tenant households, including family size, length of residence, age of tenants, and whether receiving federal or state rent subsidies;

E. All rental history detailing the size in square footage, the current or last rental rate, the monthly rental rate for the preceding two years, and the monthly vacancy over the preceding two years of each rental unit proposed to be converted;

F. The planning commission may required that the applicant shall distribute to all tenants a questionnaire to be returned to the city directly. The questionnaire shall contain any or all questions deemed necessary by the planning commission in order to fully determine the physical condition of the units and/or rental history for each unit. (Ord. 460 § 3.2, 1979)

16.68.060 Contents of application for tentative map for conversion of condominium and community apartments.

The application for a tentative map for conversion shall include the following information:

A. A boundary map showing the location of all existing easements, structures and trees to be removed, and other improvements upon the property;

B. A property report describing the condition and estimating the remaining useful life of each of the following elements of each structure situated within the project proposed for conversion: roofs, foundations, exterior paint, paved surfaces, mechanical systems, electric systems, plumbing systems. Such report shall be prepared by an appropriately licensed contractor or licensed engineer;

C. A structural pest control report. Such report shall be prepared by a licensed structural pest control operator pursuant to Section 8516 of the Business and Professions Code;

D. A building history report including the following:

1. The date of construction of all elements of the project,

2. A statement of the major uses of the project since construction,

3. The date and description of each major repair and/or renovation of any element since the date of construction. For the purposes of this subsection, a “major repair” and/or renovation shall mean any repair for which an expenditure of more than five hundred dollars was made,

4. Statement regarding current project ownership;

E. A true copy of each application to the Department of Real Estate of the state for issuance of a final public report for the project proposed for conversion including all attachments and exhibits thereto required by the Department pursuant to Section 11011 of the Business and Professions Code; a true copy of the statement of compliance (Form 643 as amended) pursuant to Title 10, California Administration Code, Section 2792.9, or its successor, relating to operating and maintenance funds during start-up; a statement of the amount and type of capital contributions to be provided by the developer to the association for deferred maintenance of the common areas, and the sum and date on which the association will receive said sum. All contributions shall be made prior to recordation of a final map;

F. A true copy of the Supplemental Questionnaire for Apartments Converted to Condominium Projects submitted to the Department of Real Estate of the state for the project proposed for conversion; this shall include all attachments and exhibits thereto;

G. The proposed annual operating budget containing a sinking fund to accumulate reserve funds to pay for major anticipated maintenance, repair, or replacement expenses, with the developer providing a proportional payment relative to the number of units held at each anniversary date;

H. A copy of warranty to be made against defects to provide a minimum coverage of two years from sale of unit. (Ord. 460 § 3.3, 1979)

16.68.070 Waiver from application content requirements.

An applicant may apply to the planning commission for permission to omit any of the information required by Section 16.68.050 or 16.68.060. That application shall only be granted if the planning commission concludes that the items which the applicant seeks to exclude from his or her application would be of little or no value to the commission in its deliberations. (Ord. 460 § 3.4, 1979)

16.68.080 Covenants, conditions and restrictions.

Unless specifically waived by the city council upon application by the applicant to the city council, the covenants, conditions and restrictions for any conversion to five or more units shall contain the following provisions;

A. The specific assignment of parking spaces;

B. Provisions for management and maintenance of common areas and facilities within the project;

C. Provisions making the city a party in title to enforce maintenance requirements contained in the covenants, conditions and restrictions and to compensate the city for reasonable attorney’s fees and costs in so enforcing;

D. Provisions that, in the event of default in payment of annual assessments, members of the association shall be subjected to penalties for late payment and reasonable attorney’s fees and costs incurred in collection of the assessments;

E. Provisions allowing the association to terminate the contract of any person or organization engaged by the developer;

F. See Section 16.68.140;

G. Restrict RVs or provide separate screened area. (Ord. 460 § 3.5, 1979)

16.68.090 Draft versions.

In lieu of providing the information required by the subsections E and F of Section 16.68.060, the applicant may submit drafts of the various required items in the event the various items have not actually been submitted to or been approved by the state agencies. In the event the applicant changes the contents of any of the documents above-mentioned from the contents of those documents submitted to the city, he or she shall immediately notify the city. Unless the city attorney determines that the changes are quite unlikely to have a bearing upon the city’s interests in these matters, as described in Section 16.68.010, the changes in the contents of the items submitted to the city along with the application(s) shall render null and void any previous city approvals of the application(s). (Ord. 460 § 3.6, 1979)

16.68.100 Residential condominium and community apartment conversion development standards – Generally.

Subject to the provisions of Section 16.68.020B, to achieve the purposes of this-chapter, all conversion projects shall conform to the development standards set out in Sections 16.68.110 through 16.68.190. (Ord. 460 § 4.1 (part), 1979)

16.68.110 Off-street parking.

The off-street parking requirements for a project shall be at least one assigned and covered space for each unit. There shall be an additional one space, per unit and at least one space per four units which shall be unassigned (for guests). (Ord. 460 § 4.1(a), 1979)

16.68.120 Meters and control valves.

The consumption of gas and electricity within each unit shall be separately metered so that the unit owner can be separately billed for each utility. A water shut-off valve shall be provided for each unit or for each plumbing fixture. Each unit shall have access to its own meter(s) and heater(s) which shall not require entry through another unit. (Ord. 460 § 4.1(b), 1979)

16.68.130 Overcurrent protection.

Each unit shall have its own panel board for all electrical circuits which serve the unit. (Ord. 460 § 4.1(c), 1979)

16.68.140 Impact sound insulation.

Wall and floor-ceiling assemblies shall conform to Title 25, California Administrative Code, Section 1092, or its successor, or permanent mechanical equipment, including domestic appliances, which is determined by the director of building and zoning to be a potential source of vibration or noise, shall be shock-mounted, isolated from the floor and ceiling, or otherwise installed in a manner approved by the director of building and zoning to lessen the transmission of vibration and noise. Floor covering may only be replaced by another floor covering that provides the same or greater insulation. (Ord. 460 § 4.1(d), 1979)

16.68.150 Compliance with building and housing codes.

All projects shall meet the requirements of the city building and fire codes as they existed at the time of construction of the project, and the housing code as it exists at the time of application approval and also provisions of:

A. Smoke Detectors. Each living unit shall be provided with approved detectors of products of combustion other than heat conforming to the latest Uniform Building Code Standards, mounted on the ceiling or wall at a point centrally located in the corridor or area giving access to rooms used for sleeping purposes.

B. Maintenance of Fire Protection Systems. All on-site fire hydrants, fire alarm systems, portable fire extinguishers, and other fire protective appliances shall be retained in operable condition at all times maintained by the homeowner’s association and delineated in the covenants, conditions, and restrictions. (Ord. 460 § 4.1(e), 1979)

16.68.160 Storage facilities.

Separate storage facilities shall be provided for each unit in such manner, size, and location to be determined by the planning commission at the time of use permit approval with the minimum area to be two hundred cubic feet. (Ord. 460 § 4.1(f), 1979)

16.68.170 Open spaces.

Provisions for open spaces shall be the same as that required for multiple-family units in the zoning ordinance. (Ord. 460 § 4.1(g), 1979)

16.68.180 Condition of equipment and appliances.

The applicant shall supply written certification to the buyer of each unit on the initial sale after conversion that any dishwashers, garbage disposals, stoves, refrigerators, hot water tanks, and air conditioners that are provided are in working condition as of the close of escrow. At such time as the homeowner’s association takes over management of the development, the applicant shall provide written certification to the association that any pool and pool equipment and any appliances and mechanical equipment to be owned in common by the association is in working condition. (Ord. 460 § 4.1(h), 1979)

16.68.190 Waiver of requirements.

The provisions of Sections 16.68.110 through 16.68.180 may be waived by the planning commission if the existing circumstances warrant waiver and the proposed conversion substantially conforms to the intent of this section. (Ord. 460 § 4.1(i), 1979)

16.68.200 Property and structural pest control reports.

After reviewing the property and structural pest control reports required to be submitted pursuant to Section 16.68.040, and inspecting the structures situate within the project when he or she deems such inspection necessary, the building official shall identify all items evidenced by such reports and/or inspection to be hazardous to the life, health, or safety of the occupants of such structure within the project or of the general public. No final map shall be approved for recordation until the building official has certified that the requirements of this paragraph and Sections 16.68.100 through 16.68.190 have been met, or that sufficient bonding has been provided to cover the total cost of completing required modifications. (Ord. 460 § 5.1, 1979)

16.68.210 Information to purchasers.

The city may condition approval of the applications upon the developer agreeing to provide any or all of the documents listed in Sections 16.68.040 through 16.68.090 to each prospective purchaser or unit. Failure of the developer or his or her successors to comply with the provisions of this section shall constitute a misdemeanor. (Ord. 460 § 5.2, 1979)

16.68.220 Notice of intent to convert.

A notice of intent to convert shall be delivered to each tenant. Evidence of receipt shall be submitted with the tentative map. The form of the notice shall be as approved by the planning department and shall contain not less than the following:

A. Name and address of current owner;

B. Name and address of proposed subdivider;

C. Approximate date on which the tentative map is proposed to be filed;

D. Approximate date on which the final map or parcel map is to be filed;

E. Approximate date on which the unit is to be vacated by nonpurchasing tenants;

F. Tenant’s right to purchase;

G. Tenant’s right of notification to vacate;

H. Tenant’s right of termination of lease;

I. Statement of no rent increase;

J. Provision for special cases; and

K. Provision of moving expenses.

Other information may be required as deemed necessary. (Ord. 460 § 6.1, 1979)

16.68.230 Tenant’s right to purchase.

As provided in Government Code Section 66427.1(b), any present tenant or tenants of any unit shall be given a nontransferable right of first refusal to purchase the unit occupied at a price no greater than the price offered to the general public. The right of first refusal shall extend for at least sixty days from the date of issuance of the subdivision public report or commencement of sales, whichever date is later. (Ord. 460 § 6.2, 1979)

16.68.240 Vacation of units.

Each nonpurchasing tenant, not in default under the obligations of the rental agreement or lease under which he or she occupies his or her unit, shall have not less than one hundred twenty days from the date of receipt of notification from the subdivider of his or her intent to convert, or from the filing date of the final subdivision map or parcel map, whichever date is later, to find substitute housing and to relocate. (Ord. 460 § 6.3, 1979)

16.68.250 No increase in rents.

A tenant’s rent shall not be increased unless first approved by the planning commission from the time of filing of the tentative map until relocation takes place or until the subdivision is denied or withdrawn. Any requests for rent increases must be accompanied with sufficient supporting data to satisfy the planning commission as to the necessity of it. (Ord. 460 § 6.4, 1979)

16.68.260 Special cases.

Any nonpurchasing tenant aged sixty-two or older or handicapped or with minor children in school shall be given an additional six months in which to find suitable replacement housing. (Ord. 460 § 6.5, 1979)

16.68.270 Moving expenses.

The subdivider shall provide moving expenses of one and one-half times the monthly rent to any tenant who relocates from the building to be converted after receipt of notification from the subdivider of his or her intent to convert, except when the tenant has given notice of his or her intent to move prior to receipt of notification from the subdivider of his or her intent to convert. (Ord. 460 § 6.6, 1979)

16.68.280 Notice to new tenants.

After submittal of the tentative map, any prospective tenants shall be notified in writing of the intent to convert prior to leasing. (Ord. 460 § 6.7, 1979)

16.68.290 Effect of proposed conversion on city’s low and moderate income housing supply.

In reviewing requests for conversions of existing apartments to condominiums, the planning commission shall consider the following:

A. Whether or not the amount and impact of the displacement of tenants if the conversion is approved would be detrimental to the health, safety, or general welfare of, the community;

B. The role that the apartment structure plays in the existing housing rental market. Particular emphasis will be placed on the evaluation of rental structures to determine if the existing apartment complex is serving low and moderate income, and low and moderate income rents used by the federal and state governments will be used in the evaluation. Along with other factors, the city will consider the following:

1. The probable income range of tenants living in existing apartments based on the assumption that households should pay between one-fourth and one-third of their income for housing. The income range will be used to determine whether potential displaced tenants can be categorized as low and moderate income,

2. The applicant shall show provisions for insuring that a minimum of fifteen percent of the units will be available for low-income households (defined as eighty percent of median income) and that an additional twenty percent will be available to low and moderate income households (defined as one hundred twenty percent of median income). The provisions should include private and public financing programs, projected selling prices and other proposed considerations. Any variance to these minimum requirements must be approved by the city council. In requesting a variance, the applicant must provide sufficient evidence to clearly establish’ that the provisions of this section are not applicable to the proposed project due to its housing type location, etc.;

C. The need and demand for lower cost home ownership opportunities which are increased by the conversion of apartments to condominiums;

D. If the planning commission determines that vacancies in the project have been increased for the purpose of preparing the project for conversion, the tentative map may be disapproved. In evaluation of the current vacancy level under this subsection the increase in rental rates for each unit and the average monthly vacancy rate for the project over the preceding two years shall be considered. (Ord. 460 § 6.8, 1979)