Chapter 19.64
CONVERSION OF RENTAL UNITS TO OWNERSHIP
Sections:
19.64.030 General Requirements.
19.64.040 Tenant Notification (California Government Code Sections 66427.1, 66452.8, 66452.9).
19.64.050 Tenant Purchase Option (California Government Code Section 66427.1).
19.64.060 Review Procedures (California Government Code Section 66427.1, 66427.2).
19.64.070 Standards for Condominium Conversions.
19.64.080 Modification or Waiver of Conversion Standards.
19.64.090 Condominium Conversion Fees.
19.64.110 Agreement to Retain Rental Housing (California Government Code Section 66452.50).
19.64.010 Purpose and Intent.
A. Purpose. The purpose of this chapter is to:
1. Regulate Conversions. Provide standards and criteria for regulating the conversion of rental units to condominium, community apartment or stock cooperative types of ownership and for determining when such conversions are appropriate; and
2. Mitigate Hardships. Mitigate any hardships to tenants caused by their displacement.
B. Intent. The intent of this chapter is as follows:
1. Residential Conversions. The City Council finds that residential condominiums, community apartment and stock cooperative types of ownership, as defined in California Civil Code Sections 4105, 4125 and 4190, differ from rental apartments with respect to design, type of construction and maintenance controls, and therefore that the development standards in this chapter are necessary for the protection of the community, existing rental tenants and the purchasers of the converted units. It is also the intent of these regulations to maintain a balanced mix between ownership and rental housing in order to assure the development of a variety of housing types to serve the needs of the community.
2. Nonresidential Conversions. The City Council also finds that nonresidential condominiums, community apartment and stock cooperative types of ownership, as defined in California Civil Code Sections 4105, 4125 and 4190, differ from rental units with respect to design, type of construction and maintenance controls, and therefore that the development standards in this chapter are necessary for the protection of the community, existing rental tenants and the purchasers of the converted units.
C. Applicability of Sections. All sections in this chapter apply to the conversion of residential units. All sections except 19.64.040, 19.64.050 and 19.64.110 apply to the conversion of nonresidential units. (Ord. 2023-22 § 871, 2023; Ord. 2001-18 § 2 (Exh. ZA-1) (part), 2001)
19.64.020 Definitions.
For purposes of this chapter and this title, the following terms shall have the meanings indicated:
A. Condominium, Community Apartments and Stock Cooperatives. The term “condominium” shall encompass condominium projects, community apartment projects and stock cooperatives, as defined in California Civil Code Sections 4105, 4125 and 4190.
B. Organizational Documents. The term “organizational documents” means the declaration of restrictions, articles of incorporation, by-laws and any contracts for the maintenance, management or operation of all or any part of a project.
C. Project. The term “project” means the entire parcel of real property proposed to be used or divided, as land or airspace, into two or more units as a condominium.
D. Unit. The term “unit” means the particular area of land or airspace that is designed, intended or used for exclusive possession or control of individual owners or occupier.
E. Vacancy Rate. The term “vacancy rate” means the number of vacant multiple dwellings being offered for rent or lease in the City of Newport Beach shown as a percentage of the total number of multiple dwellings offered for or under rental or lease agreement in the City. Such vacancy rate shall be as established once each year, in April, by survey of fifteen (15) percent of the City’s rental units. (Ord. 2023-22 § 872, 2023; Ord. 2001-18 § 2 (Exh. ZA-1) (part), 2001)
19.64.030 General Requirements.
A. Where Permitted. If approved under the provisions of this chapter and Title 20 (Zoning Code), residential condominium conversions may be allowed in any district in which residential uses are permitted, including planned communities, except within the R-BI District (Balboa Island). Nonresidential condominium conversions may be allowed in any district in which such uses are permitted.
B. Subdivision Required. All condominium conversions subject to this chapter shall require approval of tentative and final subdivision maps.
C. Review Responsibilities. Condominium conversions containing five or more dwelling units shall be reviewed by the Planning Commission via a tentative tract map. Condominium projects or conversions containing four or fewer dwelling units, or nonresidential property, shall be reviewed by the Zoning Administrator via a tentative parcel map.
D. Applicable Standards. Condominium conversion projects shall conform to: (1) the applicable standards and requirements of the zoning district in which the project is located at the time of approval per Title 20 (Zoning Code), and (2) the applicable provisions of this title. (Ord. 2023-22 § 873, 2023; Ord. 2009-30 § 1 (Exh. 1 § 7), 2009: Ord. 2001-18 § 2 (Exh. ZA-1) (part), 2001)
19.64.040 Tenant Notification (California Government Code Sections 66427.1, 66452.8, 66452.9).
Applicants for conversion projects shall be responsible for notifying existing and prospective rental tenants as follows:
A. Existing Tenants. At least sixty (60) days prior to the filing of an application for conversion of rental or lease property, the applicant or the applicant’s agent shall give notice of such filing in the form set forth in California Government Code Section 66452.18 to each tenant of the subject property. Further, if the conversion project is approved, the applicant shall give all tenants a minimum of one hundred eighty (180) days’ advance notice of the termination of their tenancy.
B. Prospective Tenants. At least sixty (60) days prior to the filing of an application for conversion of rental or lease property, the applicant or the applicant’s agent shall give notice of such filing in the form set forth in California Government Code Section 66452.17 to each person applying after such date for rental or lease of a unit of the subject property. Pursuant to the Subdivision Map Act, failure of an applicant to provide such notice shall not be grounds to deny the conversion but shall make the applicant subject to the penalties specified in California Government Code Section 66452.17.
C. Evidence of Tenant Notification. Each application for conversion shall include evidence to the satisfaction of the Community Development Director that the notification requirements specified in subsections (A) and (B) of this section have been or will be satisfied. (Ord. 2023-22 § 874, 2023; Ord. 2013-11 § 195, 2013; Ord. 2001-18 § 2 (Exh. ZA-1) (part), 2001)
19.64.050 Tenant Purchase Option (California Government Code Section 66427.1).
The property owner shall provide tenants with an exclusive right to purchase his or her respective unit upon the same or more favorable terms and conditions than those on which such unit will be initially offered to the general public. Such right shall run for a period of not less than ninety (90) days from the date of issuance of the subdivision public report pursuant to California Business and Professions Code Section 11018.2 unless the tenant gives prior written notice of his or her intention not to exercise the right. (Ord. 2023-22 § 875, 2023; Ord. 2001-18 § 2 (Exh. ZA-1) (part), 2001)
19.64.060 Review Procedures (California Government Code Section 66427.1, 66427.2).
A. List of Tenants. In addition to the standard application requirements for tentative maps, the applicant shall submit a complete mailing list of all tenants occupying the subject property and two corresponding sets of stamped addressed envelopes. The Director shall mail a public hearing notice for the tentative map hearing to each tenant on the mailing list in accordance with the procedures of Chapter 19.12.
B. Tentative Map Review. Tentative maps shall be approved or denied by the tentative map decision making body. Decisions on the conversion of existing buildings into condominiums or stock cooperatives shall be governed by the provisions and limitations of California Government Code Section 66427.2.
C. Council Findings for Residential Conversions. For residential conversions, no final map for a condominium conversion shall be approved unless the City Council makes all of the findings set forth in California Government Code Section 66427.1 regarding tenant notification, right to purchase and other requirements.
D. Disapproval Based on Vacancy Rate. In accordance with General Plan policies, where it is proposed to convert an existing residential development containing fifteen (15) or more units to condominium units, the decision making body shall disapprove, without prejudice, any application for condominium conversion if the rental dwelling unit vacancy rate in the City at the time of the public hearing is equal to or less than five percent. Notwithstanding the preceding, the decision making body may approve a condominium conversion if it determines that either of the following overriding considerations exist:
1. The project will minimize the effect on dwelling unit vacancy rate, and otherwise substantially comply with the intent of this chapter; or
2. Evidence has been submitted that at least two-thirds of the existing tenants have voted to recommend approval of the conversion. (Ord. 2023-22 §§ 876, 877, 2023; Ord. 2001-18 § 2 (Exh. ZA-1) (part), 2001)
19.64.070 Standards for Condominium Conversions.
Condominium conversion projects shall conform to the following requirements and the decision making body shall make specific findings as to such conformance in any action approving a condominium conversion:
A. Off-Street Parking Requirements.
1. Residential Conversions. The minimum number and the design and location of off-street parking spaces shall be provided in conformance with the provisions of the off-street parking regulations contained within Title 20 of this Code, in effect at the time of approval of the conversion.
2. Nonresidential Conversions. The number of off-street parking spaces that were required at the time of original construction shall be provided on the same property to be converted to condominium purposes, and the design and location of such parking shall be in conformance with the provisions of the off-street parking regulations contained within Title 20 of this Code.
B. Each dwelling unit within a building shall have a separate sewer connection to the City sewer.
C. Each sewer lateral shall be retrofitted/fitted with a cleanout at the property line.
D. Each unit shall maintain a separate water meter and water meter connection.
E. The electrical service connection shall comply with the requirements of Chapter 15.32.
F. The applicant for a condominium conversion shall request a special inspection from the Community Development Department for the purpose of identifying any building safety violations. The applicant shall correct all identified safety violations prior to approval of a final map for the condominium conversion.
G. Permanent lot stakes and tags shall be installed at all lot corners by a licensed surveyor or civil engineer unless otherwise required by the City Engineer.
H. For residential conversions, the project shall be consistent with the adopted goals and policies of the General Plan, particularly with regard to the balance and dispersion of housing types within the City.
I. The establishment, maintenance or operation of the use or building applied for shall not, under the circumstances of the particular case, be detrimental to the health, safety, peace, comfort and general welfare of persons residing or working in the neighborhood of such proposed use or be detrimental or injurious to property and improvements in the neighborhood or the general welfare of the City. (Ord. 2013-11 §§ 196, 197, 2013; Ord. 2005-19 § 1, 2005; Ord. 2005-12 § 1, 2005; Ord. 2001-18 § 2 (Exh. ZA-1) (part), 2001)
19.64.080 Modification or Waiver of Conversion Standards.
A. Parking. The decision making body may modify or waive the parking requirements of Section 19.64.070(A) in accordance with the waiver procedures of Title 20 of this Code for off-street parking.
B. Sewer Connections. The decision making body may modify or waive the requirement for separate sewer connections per Section 19.64.070(B) if it finds that the modification or waiver will not be materially detrimental to the residents or tenants of the property or surrounding properties, nor to public health or safety. (Ord. 2013-11 § 198, 2013; Ord. 2001-18 § 2 (Exh. ZA-1) (part), 2001)
19.64.090 Condominium Conversion Fees.
In addition to other required fees, condominium conversion applications shall be accompanied by a special Building Department inspection fee, established by resolution of the City Council, for the purpose of identifying building safety violations within the project. (Ord. 2001-18 § 2 (Exh. ZA-1) (part), 2001)
19.64.100 Exemptions.
A. Park Fees. For residential developments, the conversion of existing rental housing to a condominium project shall be exempt from the requirements of Chapter 19.52 (Park Dedications and Fees) if, on the date of conversion, the rental units are at least five years of age and no additional dwelling units are to be added as part of the conversion.
B. Traffic Phasing Ordinance. The conversion of existing rental units to a condominium project shall be exempt from the requirements of Chapter 15.40 (Traffic Phasing Ordinance) if the proposed conversion will not add more than ten (10) dwelling units to a residential development or will not add more than ten thousand (10,000) square feet of gross floor area to a nonresidential development. (Ord. 2001-18 § 2 (Exh. ZA-1) (part), 2001)
19.64.110 Agreement to Retain Rental Housing (California Government Code Section 66452.50).
In addition to the provisions in this chapter regarding condominium conversions, the City may, in connection with the approval of a tentative or final map for a new residential condominium project requiring approval of a tentative or final map pursuant to this Code, enter into a binding agreement with the subdivider mandating that the units be first made available for rental housing for a period of not less than ten (10) years from the date a certificate of occupancy has been issued for the units within the development subject to the provisions of California Government Code Section 66452.50. (Ord. 2023-22 § 878, 2023; Ord. 2001-18 § 2 (Exh. ZA-1) (part), 2001)