Condominium Conversions



When values were soaring, many California landlords have taken advantage of the increases in the values of their apartment buildings by turning the units into condominiums and selling them.  To understand why, let's do the math.  An 8 unit apartment building may be worth one million dollars (as an apartment building).  After the same building is converted to 8 individual condos, each unit may sell for $250,000.00 or more.  8 units times $250,000 each is two million dollars.  Therefore the building just doubled in value by converting it!  Even with permits, renovations and costs of the sales, the building could become worth so much more than it was as an apartment. The downturn in real estate values since 2007 slowed this practice down significantly BUT after 2013, condominium conversion activity appears to be increasing again.

After the real estate bubble burst in 2009, many apartments being upgraded for sale never became condominiums so they became upscale apartments.  Some of these became great rentals for tenants.  Some owners are now looking at conversions while others are looking to rising rents as the better deal for them.

As a tenant, you have special rights if you are affected by a condominium conversion. Many landlords may try and take away your
rights by forcing you to move out without all the required notices or simply by the harassment of construction activities during renovation.  Many times, the tenant is entitled to significant benefits including compensation, more time to look for a place to
live or even the first right to buy the unit. Seek advice if you feel you are not being treated properly
Remember to  protect your rights before you lose them.

Relocation Benefits
Some cities or municipalities have Relocation Benefit programs for displaced tenants.  These change often so be sure to check your area to see if there is a program if you are facing this situation.

Tenant notice requirements:
Tenants are entitled to several special notices when there is a Condominium Conversion as provided in Govt. Code section 66427.1

Prerental notice to prospective tenants:
Tenants are entitled to several notices from an Owner who intends to file for a Condominium Conversion.  See Govt. Code sections 66427.1 66452.17  66452.1866452.19, and 66452.20..  These are only a starting point and general guide.  Other code sections and decisional case law may also apply

Right of first refusal to purchase:
Further, tenants who rent after final map approval may have a right of first refusal as provided in
Govt. Code section 66427.1 to purchase their units on the same or more favorable terms and conditions initially offered to the general public.

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California law for San Diego is applied in these pages.  Such laws may or may not be applicable in other jurisdictions.  The information provided herein is of a general nature and is not intended to be taken as specific legal advice.  For legal advice in a particular situation, promptly consult with an appropriate attorney.