A.

This chapter is enacted to establish requirements and procedures for the control and approval of conversion of existing multiple-family 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 the point where they may lead to conditions of mismanagement, neglect, and blight that impact upon the public health, safety, welfare, and economic prosperity of the City of San José. Such projects may conflict with the policy of the City of San José 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. To insure that such problems are avoided in both short and long term, it is the express intent of the City of San José to treat such projects differently from multiple dwellings or other structures which are not residential condominium or community apartment projects, and to establish rules and standards thereto regulating the conversion to such projects in the City of San José.

B.

This chapter is enacted to insure that proposed conversions are approved consistent with policies and objectives of the City of San José, particularly the following:

1.

To make adequate provision 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 in the high-density urban setting;

3.

To provide a reasonable balance of rental and ownership housing;

4.

To inform prospective conversion purchasers regarding the physical conditions of the structures offered for purchase.

(Ord. 26248.)

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

(Ord. 26248.)

"Association" is the organization of persons who own a condominium unit or have right of exclusive occupancy in a community apartment.

(Ord. 26248.)

"Common area" is an entire project excepting all units therein.

(Ord. 26248.)

"Community apartment" 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.

(Ord. 26248.)

"Community apartment project" is the conversion of an existing structure to a community apartment containing four or more apartments to which there is the right of exclusive occupancy for residential purposes.

(Ord. 26248.)

"Condominium" is an estate in real property consisting of an undivided interest in common in a portion of a parcel of 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. Such estate may, with respect to the duration of its enjoyment, be either of the following:

1.

An estate of inheritance or perpetual estate.

2.

An estate for life.

3.

An estate for years, such as a leasehold or subleasehold.

(Ord. 26248.)

A "condominium project" or "residential condominium project" is the conversion of an existing structure to a condominium containing four or more condominiums for residential purposes.

(Ord. 26248.)

"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 or community apartment 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.

(Ord. 26248.)

"Developer" is the owner or subdivider with a controlling proprietary interest in the proposed project.

(Ord. 26248.)

"Handicapped tenant" is a tenant who is the primary wage earner of a household, or a single person, with any medically determinable physical or mental impairment limiting his or her mobility, substantially affecting his or her ability to obtain employment, or requiring special care facilities in the home. "Physical or mental impairment" is an impairment that results from anatomical, physiological, or psychological abnormalities which are demonstrable by medically acceptable clinical or laboratory diagnostic techniques.

(Ord. 26248.)

"Low income," when used by itself or as a modifier of "tenant" or other term, means 80% or less of the current median income as established annually by the U.S. Department of Housing and Urban Development (HUD) for the San José Standard Metropolitan Statistical Area (SMSA) as adjusted for household size.

(Ord. 26248.)

"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 any part of a project.

(Ord. 26248.)

"Project" is a residential condominium project or community apartment project.

(Ord. 26248.)

"Recreational open space" is 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.

(Ord. 26248.)

"Unit" is the element of a residential condominium project which is not owned in common with the owners of other condominiums in the project, or is an apartment in a community apartment project to which an owner of an undivided interest in common in a community apartment project has a right of exclusive occupancy.

(Ord. 26248.)

"Unjust eviction" is an eviction for other than one or more of the following reasons:

1.

The tenant has failed to pay the rent to which the landlord is entitled;

2.

The tenant has violated an obligation or covenant of the tenancy other than the obligation to surrender possession upon proper notice and has failed to cure such violation after receiving written notice thereof from the landlord;

3.

The tenant is committing or permitting to exist a nuisance in, or is causing damage to, the rental unit or to the appurtenance thereof, or to the common areas of the property containing the rental unit, or is creating an unreasonable interference with comfort, safety, or enjoyment of any of the other residents of the same or any adjacent building;

4.

The tenant is using or permitting a rental unit to be used for any illegal purpose;

5.

The tenant who had a written lease or rental agreement which terminated during any notice period or proceeding under this chapter, has refused, after written request or demand by the landlord, to execute a written extension or renewal thereof for a further period with similar provisions, in such terms and for such period as are not inconsistent with or in violation of any provisions of this section or chapter;

6.

The tenant has refused the landlord reasonable access to the unit for the purpose of making repairs or improvements, or for the purpose of inspection as permitted or required by the lease or by law, or for the purpose of showing the rental unit to any prospective purchaser or mortgagee;

7.

The person in possession of the rental unit at the end of the lease or rental term is a subtenant or assignee not approved by the landlord, where the lease or rental agreement requires approval by the landlord of any assignment or subtenancy.

(Ord. 26248.)

No conversion to a project shall be permitted in any district unless the same is permitted in such district pursuant to the provisions of this title, nor shall any conversion to a project be permitted in any district in which it is permitted pursuant to the provisions of this title unless and until a conditional use permit therefor has been issued under the provisions of this title.

(Ord. 26248.)

A.

In addition to the requirements of Section 20.100.190, notice of time, place, and purpose of any public hearing on an application for a conditional use permit for conversion to a project shall be given to each tenant of the proposed project hereinafter identified pursuant to the provisions of this part. Each such notice shall be printed in English and Spanish.

B.

The director shall mail, postage prepaid, a copy of the staff report on an application for a conditional use permit for conversion to a project, at least five (5) days before the date set for hearing by the planning commission, to each tenant of the proposed project hereinafter identified pursuant to the provisions of this part.

C.

Notwithstanding the preceding provisions of this section, the failure of the director or city clerk to mail any notice or report, or the failure of any tenant to receive the same, shall not affect in any way whatsoever the validity of any proceedings taken under this chapter, nor of any action or decision of the planning commission or city council made or taken in any such proceedings, nor prevent the planning commission or city council from proceeding with any hearing at the time and place set therefor.

(Ord. 26248.)

Recognizing that the conversion of structures, which have been previously occupied, to a project presents unique problems to present tenants and future buyers, in addition to any requirements relating to applications for conditional use permits, the application for a conditional use permit for a conversion to a project shall include the following information:

1.

Satisfactory evidence that, at least sixty (60) days prior to the date of filing such application, each of the tenants of the proposed project received, pursuant to Section 20.170.400 of this chapter, written notification of intention to convert; and that, thereafter, each person applying for rental of a unit in the proposed project, prior to payment of any rent or deposit, received notification of intention to convert.

2.

Provision that, after the date of filing such application, each person applying for rental of a unit in the proposed project, prior to payment of any rent or deposit, shall receive, pursuant to Section 20.170.400 of this chapter, written notification of intention to convert.

3.

A boundary map showing the location of all existing easements, structures, mature and/or scenic trees, and other improvements upon the property.

4.

The proposed organizational documents. In addition to such covenants, conditions, and restrictions that may be required by the department of real estate of the state of California pursuant to Title 6 (Condominiums) of the Civil Code or other state laws or policies, the organization documents shall provide for the following:

a.

Conveyance of units;

b.

Assignment of parking and management of common areas within the project;

c.

A proposed annual operating budget containing a reserve fund to pay major anticipated maintenance, repair, or replacement expenses; and indicating the association fees needed for the operating budget and the reserve fund;

d.

FHA regulatory agreement, if any;

e.

The most recent balance sheet of the association.

5.

A provision that the annual assessments to members of the association shall provide for penalties for late payments and reasonable attorneys' fees and costs in the event of default by said members.

6.

Provision to allow the association to terminate the contract of any person or organization engaged by the developer to perform management or maintenance duties after the association assumed control of the project or anytime thereafter.

7.

A property report describing the condition and estimating the remaining useful life of each of the following elements of each structure situate within the project proposed for conversion: roofs, foundations, exterior paint, paved surfaces, mechanical systems, electrical systems, plumbing systems, sewage systems, swimming pools, sprinkler systems for landscaping, utility delivery systems, central or community heating and air conditioning systems, fire protection systems including any automatic sprinkler systems, alarm systems, or standpipe systems, and structural elements. For any element whose useful life is less than five (5) years, a replacement cost estimate shall be provided. Such report shall be prepared by an appropriately licensed contractor or registered civil or structural engineer.

8.

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.

9.

A building history report including the following:

a.

The date of construction of all elements of the project.

b.

A statement of the major uses of said project since construction.

c.

The date and description of each major repair of any element since the date of construction. For the purposes of this subsection, a "major repair" shall mean any repair for which an expenditure of more than one thousand dollars was made.

d.

The date and description of each major renovation of any element since the date of construction. For the purposes of this subsection, a "major renovation" shall mean any renovation for which an expenditure of more than one thousand dollars was made.

e.

Statement regarding current ownership of all improvements and underlying land.

f.

The name and address of each present tenant of the project.

g.

Failure to provide information required by Subsections 9(a) through 9(f), inclusive, shall be accompanied by an affidavit, given under penalty of perjury, setting forth in detail all efforts undertaken to discover such information and all reasons why said information cannot be obtained.

10.

A rental history detailing the size in square footage and number of bedrooms, 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.

11.

A true copy of each application to the California Department of Real Estate 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 whether the developer will provide any capital contribution to the association for deferred maintenance of the common areas and, if so, the sum and date on which the association will receive said sum.

12.

A true copy of the supplemental questionnaire for apartments converted to condominium projects submitted to the California Department of Real Estate for the project proposed for conversion, including all attachments and exhibits thereto.

(Ord. 26248.)

The information required to be furnished pursuant to Subsections K and L of Section 20.170.220 above shall be subject to the following provisions:

1.

To the extent that such information is not available at the time of application, any conditional use permit issued under this chapter shall require the developer to furnish such information to the director within ten (10) days of submission of the same to the department of real estate.

2.

The developer shall file with the director a true copy of any amended or revised documents submitted to the department of real estate prior to the public hearing before the planning commission or city council on a conditional use permit for conversion to a project. (The violation of any of the conditions of an approved conditional use permit for conversion to a project is grounds for revocation of such permit.)

3.

The developer shall file with the city a true copy of the final public report within ten (10) days of issuance by the department of real estate.

(Ord. 26248.)

To achieve the purposes of this chapter, all projects shall conform to the requirements of this chapter and all other parts of this title applicable thereto, provided that if there is any conflict between the provisions of this chapter and such other parts of this title, the provisions of this chapter shall control. An application for a conditional use permit for a project which does not comply with all of the development standards in Section 20.170.300 may, but shall not under any circumstances be required to be granted and a conditional use permit may be issued therefor if the planning commission or city council finds that:

1.

Because of circumstances applicable to the subject property or to the structures situate thereon, including (but not limited to) the size, shape, location or surroundings of the subject property or the buildings situate thereon, but expressly excluding any consideration of the personal circumstances of the developer, the strict application of the development standards set forth in Section 20.170.300 would create an unreasonable economic hardship, and

2.

A conditional use permit issued under this chapter not in conformance with such development standards, subject to such conditions as may be imposed thereon:

a.

Will provide for substantial compliance with such development standards, and

b.

Will incorporate mitigating features into the project which tend to further the purposes of this chapter.

(Ord. 26248.)

Subject to the provisions of Section 20.170.240, to achieve the purposes of this chapter, all projects shall conform to the following development standards:

1.

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.

2.

Each unit shall have its own panel board for all electrical circuits which serve the unit.

3.

Wall and floor-ceiling assemblies shall conform to the sound insulation performance criteria promulgated in Title 25, Chapter 1, Subchapter l, Article 4, Section 78, or its successor, of the California Administrative Code. Required existing floor covering may only be replaced by another floor covering that provides the same or greater insulation.

(Ords. 26248, 29312.)

A.

After reviewing the property and structural pest control reports required to be submitted pursuant to Section 20.170.220 and inspecting the structures situate within the project, 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 the general public. Each permit issued hereunder shall require all such items to be corrected to the satisfaction of the building official.

B.

The director shall certify that the proposed project complies with the applicable provisions of the City of San José housing code at the time of application and, in addition, that said project complies with the applicable provisions of the City of San José building code and Title 25, Chapter 1, Subchapter 1, Sections 26, 88, 110, and 112, or their successors, of the California Administrative Code relating to fire regulations in force and in effect at the time each existing structure was erected within said project. If said project does not comply with said codes and said fire regulations as hereinabove required, said director shall so advise the planning commission, or the city council on appeal, in writing.

(Ord. 26248.)

If the proposed project does not comply with the applicable provisions of Section 20.170.310 relating to compliance with the City of San José housing and building codes and said fire regulations, and/or the building official identifies items to be corrected as provided in Section 20.170.310, any conditional use permit issued pursuant to this chapter shall require the developer to furnish a bond in a penal amount equal to the reasonable estimated cost to bring the project into compliance with said codes, said fire regulations and/or such identified items to be corrected as provided in Section 20.170.310. Said bond shall run in favor of individual purchasers and the association. Said bond shall provide for reasonable attorney's fees in the event of default by the principal.

(Ord. 26248.)

A conditional use permit issued under this chapter for conversion to a project may be issued prior to the time items have been so corrected and/or such compliance has been made with the said codes and said fire regulations as hereinabove provided in Section 20.170.320, but such permit shall not become effective unless and until such items have been so corrected and/or such compliance has been made, and each permit shall so provide.

(Ord. 26248.)

Without limiting the generality of the provisions relating to conditions which may be imposed on a conditional use permit issued under this title, the planning commission or city council may make any conditional use permit which may be granted under this chapter subject to a condition requiring recreational open space in a manner and to an extent it may deem reasonably necessary to secure the general purposes of this title.

(Ord. 26248.)

At least sixty (60) days prior to the date of filing an application for a conditional use permit for conversion to a project, the developer shall notify each of the tenants of the proposed project of his intention to convert, and thereafter, the developer shall notify each person applying for rental of a unit in the proposed project, prior to payment of any rent or deposit, of his intention to convert. Said notice of intention to convert shall contain a statement that the developer intends to convert the building to a project, and for that purpose that (l) he will file an application for a conditional use permit with the City of San José, and (2) he has or will file an application for a final public report with the California Department of Real Estate. Said notice shall also contain a statement of tenants' rights, pursuant to Section 20.170.420, including:

1.

Right to terminate lease or rental agreement;

2.

Limitation on increases of rent;

3.

Right of continued tenancy;

4.

Protection against unjust eviction;

5.

Protection against coercion or retaliatory action;

6.

Exclusive "right of first refusal" to purchase the unit; and

7.

"Right to quiet enjoyment" of the unit.

(Ord. 26248.)

Within five (5) days of receipt of the final public report on the proposed project from the California Department of Real Estate (hereinafter "final public report"), the developer shall notify each of the tenants of the proposed project of the issuance of said report. Said notice shall indicate that copies of said report are available on request, and shall contain a restatement of certain tenants' rights, pursuant to Section 20.170.420, including:

1.

Right of continued tenancy.

2.

Exclusive "right of first refusal" to purchase the unit, and

3.

"Right to quiet enjoyment" of the unit.

(Ord. 26248.)

From the date of issuance of a notice of intention to convert, pursuant to Section 20.170.410, until the date indicated, if applicable, each tenant of a proposed project shall have the following rights with respect to his or her rental unit:

1.

The right to terminate a lease or rental agreement, without penalty, upon thirty (30) days' notice to the landlord.

2.

Notwithstanding the provisions of Chapter 17.23 of Title 17 of this Code, no increase in rent until termination of a lease or rental agreement pursuant to Subdivision A, or until twelve (12) months after the date of such issuance, whichever comes first.

3.

The right of continued tenancy until 180 days after issuance of the final public report or expiration of the tenant's lease or rental agreement, whichever is longer, and then only upon thirty (30) days' notice to vacate.

4.

No unjust eviction during tenancy.

5.

No coercion or retaliatory action against any such tenant, including pressure to support, or refrain from opposing, a project.

6.

An irrevocable, nontransferable preemptive right (i.e., "right of first refusal") to purchase the unit at a price no greater than the price offered to the general public for such unit or comparable unit, if such tenant is not in default under the terms of his or her lease or rental agreement, until 90 days after issuance of the final public report.

7.

No remodeling of the interior of such unit to prepare it for sale (i.e. "right to quiet enjoyment") until 150 days after issuance of the final public report.

(Ord. 26248.)

Without limiting the generality of the provisions relating to conditions which may be imposed on a conditional use permit under this title, the planning commission or the city council may make any conditional use permit which may be granted under this chapter subject to a condition requiring a plan of relocation and purchase assistance for tenants of a proposed project. Such a plan may include the following provisions:

1.

Relocation assistance including, but not limited to, active assistance in securing comparable replacement housing for tenants who will be displaced, and a payment to each household for displacement costs.

2.

A rental assistance payment to displaced tenants of a project equal to the difference between the pre-conversion rent and that of a comparable replacement unit for up to twenty-four (24) months to mitigate any rent increase due to relocation.

(Ord. 26248.)

The developer shall furnish each prospective purchaser of a unit within a project a true copy of the conditional use permit issued under this chapter and each of the following informational documents:

1.

The property report.

2.

The structural pest control report.

3.

The building history report excluding, however, items (f) and (g) thereof.

4.

Statement of compliance (form 643) pursuant to Title 10, California Administrative Code, Section 2792.9, or its successor, relating to operating and maintenance funds during start-up.

5.

The proposed annual operating budget of the association indicating a reserve fund to pay major anticipated maintenance, repair, and replacement expenses, and the association fees needed for the operating budget and the reserve fund.

(Ord. 26248.)

Without limiting the generality of the provisions relating to conditions which may be imposed on a conditional use permit under this title, the planning commission or city council may make any conditional use permit which may be granted under this chapter subject to conditions requiring the following:

1.

A capital contribution provided by the developer to the association for the deferred maintenance of the common area, and the deferred maintenance or replacement of any of the elements described in the property report, pursuant to Subsection 7 of Section 20.170.220, which are owned or maintained by the association. The information available pursuant to said Subsection 7 of Section 20.170.220 regarding the estimated replacement cost of those elements whose useful life is less than five (5) years may be used in determining the amount of such contribution.

2.

A one-year warranty provided free of charge by the developer to the association for those systems described in the property report, pursuant to Subsection 7 of Section 20.170.220, which are owned or maintained by the association. (Such warranty need not cover those systems which may be covered by a substantial capital contribution by the developer for deferred maintenance.)

3.

A one-year warranty provided free of charge by the developer to the first purchaser of each unit on any dishwashers, garbage disposals, stoves, refrigerators, hot water tanks, heating systems, and air conditioners provided therein as of the close of escrow.

(Ord. 26248.)

Neither the developer, any agents, or assignees shall discriminate in the sale, or in the terms and conditions of sale of any unit against any person or family based upon age or family size, unless family size exceeds the U.S. Department of Housing and Urban Development standard for overcrowding of 1.25 persons per room, or unless it can be demonstrated that the project as designed and built is not suitable for accommodation of certain persons or families because of age or family size. This nondiscrimination provision shall be included in the conditions, covenants, and restrictions for the project.

(Ord. 26248.)

The provisions of this chapter shall not apply to either of the following:

1.

The conversion to a project pursuant to a PD permit in a PD district whose PD zoning permits the conversion to a project.

2.

The conversion to a project pursuant to a final subdivision map recorded prior to October 3, 1975.

(Ord. 26248.)