BILL ANALYSIS
AB 763
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Date of Hearing: May 9, 2007
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Lori Saldana, Chair
AB 763 (Saldana) - As Amended: April 16, 2007
SUBJECT : Condominium conversion: tenant notification.
SUMMARY : Creates new tenant notification requirements that must
be fulfilled prior to the approval of a final subdivision map
for the conversion of residential rental property into
condominiums and makes other related changes to the Subdivision
Map Act. Specifically, this bill :
1)Repeals the existing provisions of the Subdivision Map Act
(Map Act) concerning tenant notice and exclusive right to
purchase in condominium conversions.
2)Prohibits a local legislative body from approving a final map
for a subdivision to be created from the conversion of
residential real property into a condominium project, a
community apartment project, or a stock cooperative project,
unless it finds that each tenant of the proposed condominium,
community apartment project, or stock cooperative project, and
each person applying for the rental of a unit in such
residential real property has received or will have received
all applicable notices and rights required by the applicable
sections of the Map Act.
3)Prohibits a local legislative body from approving a final map
for a subdivision to be created from the conversion of
residential real property into a condominium project, a
community apartment project, or a stock cooperative project
unless it finds that each of the tenants of the proposed
condominium, community apartment project, or stock cooperative
project has received or will receive each of the following
notices:
a) Written notification of intention to convert at least 60
days prior to the filing of a tentative map;
b) Ten days' written notification that an application for a
public report will be, or has been, submitted to the
Department of Real Estate (DRE), that each tenant's right
to purchase period begins with the issuance of the final
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public report, and that the report will be available on
request;
c) Written notification that the subdivider has received
the public report from DRE, to be provided within five days
of the date that the subdivider receives the public report
from DRE;
d) Written notification within 10 days of approval of a
final map for the proposed conversion;
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e) One hundred eighty days' written notice of intention to
convert prior to termination of tenancy due to the
conversion or proposed conversion (but not before the local
authority has approved a tentative map for the conversion),
which shall not alter or abridge the rights or obligations
of the parties in performance of their covenants,
including, but not limited to, the provision of services or
payment of rent; and
f) Notice of an exclusive right to contract for the
purchase of his or her respective unit upon the same terms
and conditions that the unit will be initially offered to
the general public or terms more favorable to the tenant,
which shall commence on the date the subdivision public
report is issued, and shall run for a period of not less
than 90 days, unless the tenant gives prior written notice
of his or her intention not to exercise the right.
4)Deems these written notices to tenants to be satisfied if
those notices comply with the legal requirements for service
by mail.
5)Specifies that these provisions shall not diminish, limit or
expand, other than as provided by this section, the authority
of any city, county, or city and county to approve or
disapprove condominium projects.
6)Requires that, if a rental agreement was negotiated in
Spanish, Chinese, Tagalog, Vietnamese, or Korean, all required
written notices regarding the conversion of residential real
property into a condominium project, a community apartment
project, or a stock cooperative project shall be issued in the
tenant's primary language.
7)Requires that a local legislative body that receives a request
from a subdivider or tenant for an appeal of a decision by a
local appeal board or legislative body to hold a hearing
within
30 days of receipt of the request.
8)Provides that, if there is no regular meeting of the
legislative body within the next 30 days for which notice can
be given, the appeal may be heard at the next regular meeting
for which notice can be given, or within 60 days from the date
of the receipt of the request, whichever period is shorter.
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9)Requires the legislative body to render its decision on the
appeal within 10 days following the conclusion of the hearing,
10)Makes changes to model notice forms in the Map Act to reflect
the substantive changes in notification made by the bill.
11)Requires that any action taken to attack, review, set aside,
void, or annul the approval of a tentative map or parcel map
be commenced within 90 days of the date of the decision.
EXISTING LAW requires a subdivider who intends to convert
residential rental property to a condominium project, a
community apartment project, or a stock cooperative project to
provide specified notice to existing and prospective tenants.
FISCAL EFFECT : None.
COMMENTS :
Background :
The conversion of rental property to condominiums is considered
to be a subdivision and subject to the Subdivision Map Act. A
tentative and final parcel map is required for all subdivisions
creating five or more parcels, condominiums or dwelling units.
Under current law, in order for a final subdivision map for a
condominium conversion to be approved the subdivider must give
prior notice to the tenants of the rental property to inform
them of the intent to convert and of certain rights accorded to
them by law. Failure by a subdivider to give specified notices
can render financial penalties to be paid to the tenant.
Purpose of the bill :
According to the author condominium conversions are generally
endorsed as an affordable for-sale housing option; however,
affordable housing advocates attest to the notable impacts
statewide that many of these conversions have on the displaced
tenants, particularly lower income, disabled and elderly
renters.
This bill proposes to improve the condominium conversion notice
process by deleting the existing notice provisions and replacing
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them with new provisions that separate all of the requirements
into individual subsections and clarify what they are to contain
and when they are to be sent. This bill changes the timing
notice for one of the notices required by existing law and adds
one additional tenant notice which will inform tenants when
their right under existing law to purchase their unit begins.
AB 763 also requires the local body to tentatively approve a
conversion project before the owner is allowed to tell tenants
they will have to move out. Generally, condominium conversions
take 18-24 months to complete and it is rare for the final map
to be approved any less than 6 months after the tentative map is
approved. According to the author, several local jurisdictions
have already done this by requiring either the tentative map to
be approved or the final Department of Real estate report to be
issued before 180 day notices can be served.
In addition, this bill requires that, in any case where the
original rental agreement was negotiated in Spanish, Chinese,
Tagalog, Vietnamese, or Korean, the written notices regarding
the condo conversion must also be issued in that language.
Double referred : The Assembly Committee on Rules referred AB
763 to Local Government and Housing and Community Development
Committee. The bill passed the Assembly Committee on Local
Government on April 18, 2007 by a vote of 7-0.
REGISTERED SUPPORT / OPPOSITION :
Support
California ACORN (Association of Community Organizers for Reform
Now)
Asian Americans for Civil Rights & Equality
California Alliance for Retired Americans
California Rural Legal Assistance Foundation
Congress of California Seniors
Conference of Delegates of California Bar Associations
Gray Panthers California
Protection & Advocacy, Inc.
Western Center on Law & Poverty
Opposition
None on file.
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Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085