HomeMy WebLinkAboutItem 5: Ordinance Concerning Condominium Conversion
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Action: An Ordinance Concerning Condominiums; Amending
Section 2.1060, 2.1064, 2.1070, and 2.0174 of the Eugene Code, 1971;
and Declaring an Immediate Effective Date
Meeting Date: July 10, 2006 Agenda Item Number: 5
Department: Planning and Development Staff Contact: Linda Dawson
www.eugene-or.gov Contact Telephone Number: 682-5071
ISSUE STATEMENT
The City Council will take action on proposed changes to the code provisions governing condominium
conversions to: (1) allow the use of a reserve specialist to identify the condition of the common areas;
(2) revise the definition of “moving expenses” to enable the implementing rules to base the allowable
moving cost benefits on the Federal Uniform Relocation Act; (3) provide benefits to Special Category
Tenants moving anywhere within the UGB; (4) eliminate the required City inspection; and, (5) clarify
the length of the tenant’s right to stay period.
Please note: An immediate effective date is requested with this ordinancebecause without one,
pending conversion applicants would be delayed by the 30 days required by a regular effective date.
An immediate effective date requires a 2/3 majority or 6 affirmative votes from the council to enact.
Ordinances without an immediate effective date do not take effect for 30 days.
BACKGROUND
At the June 26 City Council meeting, the council held a public hearing on proposed changes to the code
provisions regarding condominium provisions. Two residents spoke at the hearing. Two additional
changes were proposed by councilors which have been incorporated into this Agenda Item Summary
(AIS) and are recommended for approval.
In 1981, the City of Eugene adopted code provisions regulating the conversion of more than two rental
dwelling units to condominium or cooperative ownership. Since 1981, the City has adopted numerous
amendments to these code provisions. In 1989, the City adopted administrative rules implementing the
condominium conversion code provisions. In 2004, the City repealed the 1989 administrative rules and
adopted new administrative rules that combined the condominium conversion rules with the
manufactured dwelling park closure rules.
The condominium conversion code provisions (EC 2.1060 – 2.1084) and the administrative rules (R-
1078-A, et al.) regulate conversions in three ways that affect the existing tenants and potential
purchasers of a building(s) to be converted. The current code and administrative rules provide:
L:\CMO\2006 Council Agendas\M060710\S0607105.doc
1.Protection to existing tenants who reside in the project. The developer hires a housing counselor to
work with the existing tenants to find comparable housing.
2.Additional protections and benefits to “special category tenants.” Special category tenants are
those tenants who are:
Low-income persons (current household income is equal to or less than 80% of the median
?
income on an annual basis determined for Eugene-Springfield by the federal Department of
Housing and Urban Development (HUD);
Elderly, (70 years or older); or
?
Persons with disabilities.
?
Under the current provisions, the applicant must pay moving expenses to special category tenants, in
an amount representing the actual costs for moving a tenant’s possessions to another location within
the city, up to a maximum amount of $350 for moving costs and $150 for packing and unpacking
costs. Low-income tenants receive only reimbursements for moving expenses, exclusive of
expenses attributable to packing and unpacking. Elderly and disabled tenants receive reimbursement
that includes packing and unpacking costs. The Housing Counselor is responsible for presenting
moving costs to the applicant on behalf of the tenant.
3.Protections to purchasers of converted units by requiring mandatory disclosure of the condition
of the building. Purchasers of condominium units are protected by the Eugene Code in the following
ways:
The building(s) being converted must be in compliance with applicable City Building and Safety
?
Codes.
The applicant must establish an adequately funded replacement reserve account for the unit
?
owners’ association.
The purchaser must be informed of the condition of the building(s) prior to sale.
?
Proposed Code Amendments:
Recently, staff has received numerous inquiries about the City’s requirements relating to condominium
conversions. One conversion is in process and another is preparing to initiate the process. In working
with these owners, staff became aware that one requirement is no longer attainable on the open market.
In order to address this situation, the process to amend the code was initiated. This proposed
amendment and three other updates were discussed by the intergovernmental Housing Policy Board
(HPB) on May 1. The other proposed updates are in response to issues that have surfaced during the
administration of the ordinance.
1. Amend the code to replace the requirement for an architect/engineer’s certified report with a
common elements report prepared by a reserve specialist, a professional who provides an analysis of
the condition and life remaining in the common areas. Because an architect/engineer certified
report can no longer be obtained in today’s market, this requirement needs to be changed. A report
by the reserve specialist is the best replacement at this time, but the language also allows for a report
prepared by another professional acceptable in the City.
2. Amend the code to change the definition of “moving expenses” so that the administrative rules
fixing the amount of moving expenses to which a tenant is entitled can be based on the Federal
L:\CMO\2006 Council Agendas\M060710\S0607105.doc
Uniform Relocation Act. The Federal Uniform Relocation Act provides that reimbursement for
residential moving costs be based on the number of rooms of furniture to be moved. For example, in
2005 for Oregon, the allowance was $400/one-room, $550/two-rooms, $750/three-rooms, and
$950/four-rooms. The amended definition of “moving expenses” defines moving expenses as a
fixed sum of money based on the number of rooms of furniture to be moved. Additionally, a new
Section 5 has been added to the proposed ordinance clarifying that the administrative rules adopted
by the City Manager shall establish that the condominium conversion developer must pay the
moving expenses of all special category tenants in an amount no less than the Federal Uniform
Relocation Assistance Real Property Acquisition Policies Act, as amended, Fixed Residential
Moving Cost Schedule.
3. Amend the code to delete the Building Code references and required inspections by the City.
Common elements will be covered and disclosed in the reserve specialist report. This code
provision needs to be deleted since Eugene building inspectors are neither expert nor staffed
adequately to provide inspections of completed structures which are necessary with the current
condominium conversion process. There is, however, a pool of qualified individuals regulated and
licensed by the State specializing in pre-sale inspection services of completed buildings. The
regulations will require that individual purchasers be informed about the importance of a pre-
purchase inspection and encouraged to obtain one.
4. Amend the code to clarify that the tenant’s right-to-stay period is 120 days after issuance of the
permit.
5. Allow moving expenses to be paid to a Special Category Tenant moving to another location within
the UGB (the current definition of “moving expenses” limits relocation to another location in
Eugene only).
RELATED CITY POLICIES
The tenant protections for condominium conversions and the closure of manufactured dwellings parks
are combined in the administrative rules. They offer similar, but different, tenant protections. This
combining of the rules has caused some confusion. The intergovernmental Housing Policy Board has
formed a subcommittee to address the manufactured dwelling park closure issue and possibly propose
revisions to the manufactured dwelling park code provisions. The work of the subcommittee is
scheduled to conclude by December 2006. Amendments to these code provisions, including uncoupling
them from the park closure rules, may be proposed at that time.
COUNCIL OPTIONS
The City Council may adopt or decline to adopt the proposed ordinance.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends that the proposed ordinance be adopted.
L:\CMO\2006 Council Agendas\M060710\S0607105.doc
SUGGESTED MOTION
Move to adopt an ordinance concerning condominiums; amending Section 2.1060, 2.1064, 2.1070, and
2.0174 of the Eugene Code, 1971; and declaring an immediate effective date.
ATTACHMENTS
A. Proposed Ordinance
FOR MORE INFORMATION
Staff Contact: Linda Dawson
Telephone: 682-5071
Staff E-Mail: linda.l.dawson@ci.eugene.or.us
L:\CMO\2006 Council Agendas\M060710\S0607105.doc
ATTACHMENT A
ORDINANCE NO. -__________
AN ORDINANCE CONCERNING CONDOMINIUMS;
AMENDING SECTIONS 2.1060, 2.1064, 2.1070, AND
2.1074 OF THE EUGENE CODE, 1971; AND DECLARING
AN IMMEDIATE EFFECTIVE DATE.
THE CITY OF EUGENE DOES ORDAIN AS FOLLOWS:
Section 1.
The definitions of “Condominium instruments” and “Moving
expenses” set forth in Section 2.1060 of the Eugene Code, 1971, are amended to
provide:
2.1060 Condominium and Manufactured Dwelling Park Conversion -
Definitions.
In sections 2.1060 to 2.1086 of this code, the following words
and phrases mean:
Condominium instruments.
The declaration of unit ownership required to
be recorded under state law, any supplementary declarations and plats,
bylaws for the association of unit owners, the notice of intention or disclosure
statements filed pursuant to state law, the condominium public report or
examination issued pursuant to state law, the [building code inspection report
and certificate of repairs] common elements report required under section
2.1070(a) of this code, the informational brochure described in section
2.1070(cb)2 of this code, [the engineer's certificate required under section
2.1070(b) of this code,] the TAP contract required under section 2.1070(ed)
of this code, and any other document defined as a condominium instrument
under administrative rules issued hereunder. "Condominium instrument" as
applied to cooperative housing unit projects shall include any document
equivalent to those identified above as well as the articles of incorporation,
by-laws, executed regulatory agreements, occupancy or subscription
agreements, management contracts, management plans, and applications
for mortgage insurance of the cooperative corporation.
Moving expenses.
For condominium tenants, a fixed sum of money
based on the number of rooms of furniture that is intended to cover the
[representing the actual] costs of [for] moving the tenant's possessions [(or,
where applicable, a tenant's or owner's manufactured dwelling)] to another
location within the urban growth boundary [city (for condominium tenants)
or within the urban growth boundary (for manufactured dwelling tenants),]
exclusive of expenses attributable to packing and unpacking. For elderly or
disabled tenants moving expenses include an additional fixed sum of
Ordinance -
1
money intended to cover the costs of packing and unpacking. the
reimbursement shall include packing and unpacking expenses. ] For
manufactured dwelling tenants, a sum of money representing the actual
costs for moving the tenants possessions and a tenant’s manufactured
dwelling to another location within the urban growth boundary. In the
case of manufactured dwelling moving expenses, eligible expenses also
include removal and reinstallation of skirting, disconnecting utilities,
disconnecting and removing awnings and decks from the manufactured
dwelling, trip permit and public inspection fees, transportation costs, set up
charges, utility connection expenses and fees, unit improvements to meet
destination park standards, unit improvements to meet state structural
specialty codes, and temporary housing and meals for the tenant and
permanent occupants during unit relocation and set up. The [maximum]
amount of moving expenses shall be set by administrative rules issued
hereunder.
Section 2.
Subsection (3) of Section 2.1064 of the Eugene Code, 1971, is
amended to provide:
2.1064 Condominium Conversion - Limitations.
(3)
After the notice of planned conversion is given and prior to renting any
unit, any prospective tenant shall be notified by the developer or his or
her agent, in writing, of the intent to convert and advised that no TAP
benefits allowed under section 2.1070(gf) of this code will be provided
to that tenant.
Section 3.
Section 2.1070 of the Eugene Code, 1971, is amended to provide:
2.1070 Condominium Conversion - Permit Approval.
In order to obtain approval
by the city manager of an application for a condominium conversion permit,
the applicant must satisfy the following conditions and provide the following
documents as part of the permit application:
[(a) Building code inspection and certificate of repairs. Prior to the
application for a permit the developer, at his or her expense, shall
request the city to inspect the building or buildings to be converted for
compliance with the Uniform Building Code, 1982 Edition, sections 104
and 203, and section 8.005(2) of this code. The fee for this inspection
shall be an amount set by the city building official. The inspection shall
be completed within 7 days of a developer's request unless the
developer fails to provide or refuses access to the inspector. The
purpose of the inspection is to insure that the building complies with the
building code in effect at the time of construction of the building and that
the building is not otherwise dangerous or unsafe. A copy of the
inspector's report shall be provided by the developer to the city
manager as part of the application for a permit. If any code violation is
found by the inspector, the developer shall provide as part of the
Ordinance -
2
application, a certificate of repairs by the inspector showing correction
of the violations. No developer, however, shall use this certificate or
report in any advertisement or indicate to anyone in any fashion, for the
purpose of inducing a purchase of a condominium or cooperative unit,
that the city or any of its departments has approved the building or unit
for sale.]
(ba) [Engineer/architect's certificate.] Common elements report. The
applicant shall supply to the city manager a [certified] report prepared
by a reserve specialist or other professional approved by the City
[from a qualified licensed engineer or registered architect] describing
the condition and expected useful life of all common elements including
the roof, foundation, external and supporting walls, mechanical,
electrical, plumbing, heating, all other major mechanical and utility
systems, together with an estimate at current market prices of repair or
replacement costs for those items requiring immediate major repair or
eventual replacement. The report shall separately list the condition and
expected life of all components of common elements and shall include
the approximate dates of installation of the common elements and
components and the dates and description of major repairs or
renovations of the common elements and components. The report shall
show on each page the date of preparation of the report. It shall clearly
disclose which common elements could not be physically inspected and
which estimates for these common elements were not made on the
basis of a physical inspection. The report shall identify the sources
used in the provision of all information, including the condition of
common elements, the estimates of expected useful life and repair and
replacement costs. The report shall also contain a summary of all city
building official records pertaining to each building's major repairs or
renovations. The definition of "major repair" and "major renovation"
shall be set by administrative rules issued hereunder.
(cb) Applicant's affidavit. The applicant shall file an affidavit attesting to the
truth of the following:
1. That the applicant has notified all tenants residing in the building
to be converted and any affected neighborhood group of the
permit application. The affidavit shall also state that the applicant
has kept signed receipts from all affected tenants certifying that
each tenant has received copies of the notice of planned
conversion and the proposed tenant assistance plan contract.
The applicant shall state in the affidavit that such receipts shall be
kept on file in this city by the developer or the developer’s agent
subject to inspection by the city manager at any reasonable time
for a period of three years from the date the receipt is taken. For
the purpose of this provision, a refusal to accept notice of intent to
convert or the tenant assistance plan contract shall constitute
receipt by any affected tenant.
2. That the informational brochure on condominium conversion
provided by the city has been distributed to all tenants who reside
in the building proposed to be converted.
Ordinance -
3
3. That no evictions of affected tenants except for good cause have
occurred between the date of the notice of planned conversion to
the city and the date of the permit application.
(dc) Information provided to state. All issued condominium instruments
whose submission is required by administrative rules issued hereunder.
(ed) Rental history. A rental history report containing information required to
be submitted under administrative rules issued hereunder.
(fe) Tenant survey. A survey of all affected tenants in the conversion
project containing information required to be submitted under
administrative rules issued hereunder.
(gf) Tenant assistance plan. Each applicant for a permit shall prepare and
supply to the city a tenant assistance plan (TAP). No TAP need be
prepared where all of the affected tenants have executed binding offers
to purchase their units or shares or have permanently relocated at the
time of the permit application. The TAP shall be formalized by a
contract between the developer and the city, the execution of which is a
prerequisite to city permit approval. Each TAP contract shall contain
the following:
1. An obligation on the part of the developer to pay moving expenses
of special category affected tenants. The amount of moving
expenses to be paid for each type of special category tenant and
the time for such payment shall be set by administrative rules
issued hereunder.
2. An agreement by the developer to contract with a housing
counselor approved by the city, to assist special category tenants
of the building to be converted in locating housing and to act as
the developer's sole agent in representing housing as
comparable, to special category tenants. The city may withdraw
its approval of the housing counselor at any time. The contract
between a housing counselor and a developer shall be subject to
approval by the city. Such contract shall require the counselor to
use the counselor’s best efforts to obtain replacement housing
which meets the articulated special needs of each special
category tenant in addition to being comparable as defined in this
code.
3. An agreement by the developer to offer two comparable housing
units to each special category tenant prior to giving any notice of
tenancy termination to that tenant. If the status of the offered unit
as comparable is contested by the tenant, it shall not constitute
such an offer until the decision of the hearings officer on its
compatibility. An independent offer is one which is not an
outstanding offer to any other tenant and which is, during the
period of consideration, an exclusive offer to that tenant. Any
such obligation on the part of the developer shall not preclude an
eviction of any special category tenant for good cause. The
agreement to offer comparable housing to a particular tenant may
be satisfied by an offer of lifetime tenancy to that tenant.
4. An agreement by the developer not to evict any affected tenant,
Ordinance -
4
except for good cause, prior to the expiration of [180] 120 days
from the [time the tenant receives notice of planned conversion or
prior to] issuance of the permit[, whichever is later].
5. An agreement by the developer not to raise the rent of any special
category tenant except to an amount equal to or less than rent for
comparable housing in the same building if such comparable
housing exists.
6. A provision that the contract shall operate in favor of all affected
tenants of the building as third party beneficiaries.
7. A provision that the city assumes no liability for the condominium
conversion project or the developer's actions or failure to act.
8. A provision that reasonable trial and appellate court attorney's
fees shall be paid by the non-prevailing party in any action or suit
on the contract.
9. Any other provision required under administrative rules issued
hereunder.
A TAP may include any purchase incentives to existing tenants which
are offered by the developer.
(hg) Cash reserve escrow account. The developer shall submit proof of
establishment of a cash reserve account by the developer for
replacement reserves for common elements in an amount and in the
manner required by state law. In determining the estimated useful life
and replacement costs for the common elements, the developer shall
use the estimates set forth in the [engineer/architect's] common
elements report.
Section 4.
Subsection (5) of Section 2.1074 of the Eugene Code, 1971, is
amended to provide:
2.1074 Condominium Conversion - Post-Permit Obligations and Procedures.
(5)
Update of [engineer/architect's certificate] common elements report.
The developer shall update the [engineer's certificate] report required
under section 2.1070(ba) of this code every three (3) years until control
of the condominium is transferred from a developer to an association of
unit owners. Such update shall include more current information on
repair or replacement costs and any new or supplementary information
on the condition and expected useful life of the common elements.
Section 5.
The City Manager shall establish, by administrative rule, that the
condominium conversion developer must pay the moving expenses of all special
category tenants in an amount no less than the Federal Uniform Relocation Assistance
Ordinance -
5
Real Property Acquisition Policies Act, as amended, Fixed Residential Moving Cost
Schedule.
Section 6.
The City Recorder, at the request of, or with the concurrence of the
City Attorney, is authorized to administratively correct any reference errors contained
herein or in other provisions of the Eugene Code, 1971, to the provisions added,
amended or repealed herein.
Section 7.
The amendments provided for herein bring those provisions into
conformity with requirements of federal and state law and current practices, and it is
therefore necessary for the preservation of the public health, welfare and safety for this
Ordinance to have immediate effect. This Ordinance shall become effective
immediately upon its passage by the City Council and approval by the Mayor, retention
by the Mayor for more than ten days, or readoption over a Mayoral veto by two-thirds of
all members of the City Council.
Passed by the City Council this Approved by the Mayor this
____ day of ____________, 2006. _____ day of _______________, 2006.
_______________________________ ______________________________
City Recorder Mayor
Ordinance -
6