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(a) The Department shall not, under this Article, approve applications for conversions of more than the Maximum Allowable Allocation each year, beginning on June 1. The Department shall carry over any unused allocation from year to year. Units or member shares located in City-owned buildings shall not be counted as part of the Maximum Allowable Allocation and may convert under this Article 11 regardless of the number of units.
(b) The Department shall keep a list of complete applications in the order that the Department deems the application complete until the cumulative number of units reaches or would exceed the Maximum Allowable Allocation. If a project is within the Maximum Allowable Allocation then the Department shall accept the application for processing. In the event that the number of units represented by completed applications exceeds the Maximum Allowable Allocation, those buildings not accepted for processing by the Department shall be placed on a waiting list and, unless otherwise withdrawn by the Subdivider, shall be given priority in the order that the applications were deemed complete for the following year's Maximum Allowable Allocation.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
The Mayor's Office of Housing shall have the following responsibilities under this ordinance:
(a) Certificate of Clearance: The Department of Public Works shall not deem an application for conversion under this ordinance complete unless the applicant includes a "Certificate of Clearance" issued by the Mayor's Office of Housing for the application. MOH must issue a Certificate of Clearance to the Subdivider within (i) 7 days of receiving an application if the Subdivider or Limited Equity Housing Cooperative is a recipient of funding under the Real Ownership Opportunities for Tenants program or (ii) 30 days of receiving an application from any other Subdivider or Limited Equity Housing Cooperative if all of the following criteria have been met:
(1) The Subdivider has submitted income verification information for all households in the building pursuant to Section 1399.16 and the Mayor's Office of Housing determines that at least 50% of the existing households at the time of submission are Qualifying Households;
(2) Two-thirds of the Qualifying Households have submitted an executed Intention to Purchase form;
(3) At least a majority of all households in the building at the time of application submission have submitted an executed Intention to Purchase form;
(4) The following offer has been made to any tenant who, in the two years prior to the Subdivider's application for a Certificate of Clearance, surrendered their tenancy or were evicted due to a notice to quit under San Francisco Rent Ordinance Sections 37.9(a)(8) – (15) and who has resided in the building for at least one year prior to their surrender of tenancy or eviction: The former tenant shall receive the option to purchase a member share and occupy a unit appropriate to the size of the household at the time the household surrendered their tenancy under the same terms as a tenant in the building at the time of application. If the Subdivider, after making a reasonably diligent search, cannot locate a tenant, the Subdivider shall document its efforts to reach the tenant and shall request a waiver from this subsection. MOH shall evaluate whether all reasonable measures have been taken to locate the tenant and, if it finds that they have, shall grant such a waiver.
(5) The Subdivider and the Mayor's Office of Housing have entered into a binding agreement to record a notice of special restrictions against the property as a condition of subdivision that imposes: (A) all requirements of California Business and Professions Code Section 11003.4(b)(3), (B) the resale restrictions set forth in Section 1399.21(C) Carrying Charge restrictions set forth in Section 1399.9, (D) subleasing restrictions set forth in Section 1399.6(b)(3), and (E) rent restrictions for Resident Tenants set forth in Section 1399.8A. The notice of special restrictions shall run with the land and be binding on the Subdivider, any future Limited Equity Housing Cooperative, or any other successor in interest.
(6) A Limited Equity Housing Cooperative has been formed and the Limited Equity Housing Cooperative holds a fee simple interest in the parcel to be converted or entered into a lease of no less than 99 years, or the Subdivider covenants under the agreement above to transfer a fee simple interest to or enter into a lease of no less than 99 years with a duly formed Limited Equity Housing Cooperative.
(7) A rental history detailing for each unit the size in square feet, the number of bedrooms, the current or last rental rate, and the names of the current tenant or tenants for each unit, including the names of all occupants 18 years of age or older, to the extent that such information is known or can be made known to the Subdivider.
(8) A budget detailing the Total Development Cost.
(b) Ongoing Monitoring: On an ongoing basis, the Mayor's Office of Housing shall perform the following monitoring activities:
(1) Verify that vacated units purchased by households that are Qualifying Households at the time of the application for a Certificate of Clearance are re-sold to Qualifying Households;
(2) Before a proposed resale of a member share, verify that the resale price of the Member Share complies with the requirements of this ordinance;
(3) Ensure that each Limited Equity Housing Cooperative converting under this section submit an annual report certifying the following:
(A) For Resident Members who purchased their shares as a Qualified Household, (i) the cooperative is their only residence and (ii) they have not subleased their unit for more than 12 months in the previous 3 year period;
(B) For Resident Tenants, (i) the cooperative is their only residence; and (ii) they have not subleased their unit unless approved in writing by the Limited Equity Housing Cooperative.
(4) Prepare an annual monitoring report to the Board of Supervisors that analyzes: (A) the number of conversions per year; (B) the type, location, quantity, affordability, and number of resales of units in each project converted; (C) a list of projects converted under the ordinance including address and contact information; (D) known barriers and issues related to conversion under the ordinance; (E) effectiveness of the ordinance in serving low-income households; and (F) recommendations to the Board for improvements or legislative amendments.
(c) Income Verification: The Mayor's Office of Housing shall perform income verification as detailed in Section 1399.16.
(d) The Director of the Mayor's Office of Housing may issue administrative citations for violations of this ordinance. San Francisco Administrative Code Chapter 100, "Procedures Governing the Imposition of Administrative Fines," is hereby incorporated in its entirety and shall govern the procedure for imposition, enforcement, collection, and administrative review of administrative citations issued to enforce the Sections set forth in this Subsection 1344 and related provisions of the Subdivision Code. Nothing in this Section shall prevent the City from pursuing other remedies provided by law in addition to or instead of the fines provided for here.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
(a) The Department of Public Works, on behalf of itself and the Mayor's Office of Housing, is authorized to collect fees under Section 1315 of this Code which shall be applicable to all applications for initial conversion filed under this Article 11.
(b) The Department of Public Works shall be additionally authorized to collect fees on behalf of the Mayor's Office of Housing in the amount of $50 per unit for reviewing the tenants' income documentation and issuing an Income Certificate as provided in Section 1399.16 of the Code.
(c) Within one year after the date this Article becomes effective, and every three years thereafter, the Director shall review the proceeds of the administrative fee, and the costs of administering and monitoring Article 11 and shall prepare a report to the Board of Supervisors. Based upon the result of the review, the Director shall recommend to the Board of Supervisors any necessary adjustment to the fee structure and any necessary legislation to make the processing of such applications more efficient. In the event that the fee proceeds have exceeded, or are anticipated to exceed, the costs of administering and monitoring Article 11, the Director shall recommend legislation to the Board of Supervisors that modifies the applicable fee to ensure that fee proceeds do not exceed the costs of administration. In the event that fee proceeds have under-collected, or are anticipated to under-collect, the Director may recommend legislation to the Board of Supervisors that modifies the applicable fee to more accurately recover the costs for administration and monitoring.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
(a) Each tenant in a building that is converted subject to this Article has the right to purchase a Member Share at a price not to exceed an amount determined by the prescribed purchase price formula, as further defined in Section 1399.9, provided that:
(1) The purchasing tenant continues to reside in the unit from the date the application packet as provided in Section 1399.17 is filed up to and including the date of close of escrow on the purchase.
(2) Prior to the execution of a purchase and sale agreement, the purchasing tenant obtains income certification as provided in Section 1399.16.
(3) If another tenant residing in the same unit with a purchasing tenant does not jointly purchase a Member Share, the purchasing tenant may take possession of his or her unit subject to the lifetime lease rights of the non-purchasing tenant, as provided in Section 1399.8A.
(4) For any tenant to accrue a right to purchase, that tenant must have lived in the building for at least 1 year prior to the filing of the Certificate of Clearance with the Mayor's Office of Housing.
(b) A tenant may not assign his or her right to purchase a Member Share except that a tenant may jointly purchase a Member Share with another person or persons who reside in the unit with that tenant.
(c) A purchasing tenant shall not be made to execute a purchase and sale agreement or to make a non-refundable deposit toward the purchase of a Member Share prior to (i) the issuance of a conditional or final subdivision public report for the property by the California Department of Real Estate or (ii) the filing of a subdivision public reporting exemption with the Department of Real Estate under California Business and Professions Code Section 11003.4 and the recording of a Final Map under this Article.
(d) Within 30 calendar days following the issuance of the final subdivision public report by the State Department of Real Estate, the Subdivider shall notify each tenant in writing of the right to purchase a Member Share. The written notice shall be served in person or by certified or registered mail, and shall include the price at which the Member Share may be purchased and the date on which the offering period expires.
(e) To effectuate a purchase, a purchasing tenant must:
(1) execute a binding purchase and sale agreement that includes all material terms negotiated between the Subdivider and the tenant, and such other usual and customary terms found in an agreement for the purchase and sale of residential property in the City and County of San Francisco, in accordance with the requirements of the California Department of Real Estate and the final subdivision public report authorizing the sale of units in the property, restrictions on resale price consistent with the provisions of Section 1399.22 of this Article 11, and first right-of-refusal for the Limited Equity Housing Cooperative to repurchase the Member Share.
(2) execute an occupancy agreement with the Limited Equity Housing Cooperative that includes (i) a description of that portion of the Limited Equity Housing Cooperative to which the Resident Member has an exclusive right of occupancy, provided, however, (ii) a right by the Limited Equity Housing Cooperative to transfer the Resident Member to another unit in the Limited Equity Housing Cooperative for the purpose of alleviating overcrowding or underutilization of the Resident Member's existing unit, (iii) a monthly Carrying Charge for that portion as restricted by Section 1399.9, (iv) the subleasing restrictions set forth in Section 1399.6(b)(3), and (v) such other covenants and conditions conducive to maintaining the property in good, clean and habitable condition.
(f) Notwithstanding the foregoing, the Subdivider or Limited Equity Housing Cooperative may execute a conditional agreement to sell or finance Member Shares (including an agreement requiring a non-refundable deposit) as provided in California Government Code section 66499.30(e) so long as the following are completed: (i) filing of a subdivision public reporting exemption with the Department of Real Estate as set forth in Section 1399.8(a) above, (ii) issuance of a Certificate of Clearance by the Mayor's Office of Housing, and (iii) inclusion within the agreement to sell or finance Member Shares the restrictions set forth in subsection (e) above.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
(a) A lifetime lease arises as to each tenant who is qualified to purchase under Section 1399.8 but who has not exercised his or her right to do so on the date that the subdivision map for the property is recorded. In consideration of the benefit of this Article 11 to the Subdivider and any successors in interest from permitting the conversion of buildings of 2 units or more, the Subdivider and all successors in interest agree to waive any right to any rent increase other than as provided in this subsection that may be permitted by any other provision of law, and to waive any claim against the City of a taking under the California or United States Constitution based on the lifetime lease provision. These waivers will be binding on any heirs, successors in interest, or assigns.
(b) The initial rent payable under the lifetime lease shall not exceed the rent charged on the date the application for the Certificate of Clearance is submitted, plus ten (10) percent. Subsequent annual rent increases may not exceed the average annual percentage increase in Carrying Charges paid by all Resident Members. At no time may rent for a unit occupied by a Qualifying Household exceed the Maximum Annual Rent as defined herein. A tenant receiving a lifetime lease under this Section 1399.8A may exempt himself or herself from the restrictions on rent imposed by this limitation at any time if the tenant enters into an express agreement waiving the requirements of this subsection. A Subdivider or Limited Equity Housing Cooperative that is applying to or has converted under this ordinance may not evict a Resident Tenant based on his or her refusal to enter into such a waiver agreement. Any written waiver under this subsection 1399.8A(b) shall be invalid and unenforceable unless the following statement is printed in bold and all capital letters on the first line of the written waiver agreement:
REFUSAL TO ENTER INTO THIS WAIVER AGREEMENT WILL NOT TERMINATE YOUR RIGHT TO CONTINUE TO OCCUPY YOUR UNIT UNDER A LIFETIME LEASE WITH THE LIMITED EQUITY HOUSING COOPERATIVE. REFUSAL TO ENTER INTO THIS WAIVER AGREEMENT CANNOT BE USED AS A BASIS FOR EVICTING YOU.
(c) The lifetime lease shall contain a provision allowing the Resident Tenant to terminate the lease and vacate the unit upon thirty days written notice to the landlord.
(d) The lifetime lease shall terminate on the death of the Resident Tenant or the date on which the tenant ceases to actually and continuously reside in the unit as his or her sole residence, whichever occurs first. The landlord may terminate the lease during its term only for a Permitted Eviction.
(e) There shall be no decrease in maintenance of the unit occupied by a Resident Tenant under a lifetime lease.
(f) If, on the date the application packet as provided in Section 1399.17 is submitted, the tenant jointly occupies the unit with a person who is not a tenant or a Resident Member but who is a related party, then, at the request of the tenant, the related party shall become a tenant under the lifetime lease. A "related party" is an adult who is a grandparent, grandchild, parent, child, brother, sister, or spouse of the tenant, or person registered as a domestic partner of the tenant pursuant to San Francisco Administrative Code 62.1-62.8, and who, for purposes of this ordinance, has occupied the unit for at least one year prior to the date of submission of the application for a Certificate of Clearance.
(g) A tenant's rights under a lifetime lease are not transferable, and any attempted transfer shall be of no force or effect. The foregoing does not prevent a Resident Tenant with a lifetime lease from allowing other persons to occupy the unit with him or her to the same extent as allowed Resident Members, provided that (i) the Resident Tenant continues to actually reside in the unit as his or her principal residence, and (ii) no other person residing in the unit who is not a party to the lifetime lease shall have the rights of a Resident Tenant. A Resident Tenant must provide the landlord with the name of each person who occupies the unit with the tenant as well as emergency contact information for that person in writing. The Resident Tenant must also give any other occupant of the unit a written notice that the occupant is not a tenant and has no rights under the lifetime lease.
(h) The Resident Member occupying a unit subject to a lifetime lease or his or her successor in interest may require a lifetime lease tenant to enter into a written agreement documenting the tenant's lifetime lease rights. The lifetime lease shall include the terms set forth in this Section and shall also include the terms of the existing written rental agreement between the landlord and the tenant to the extent those terms do not conflict with this Section. If there is no existing written rental agreement, the written agreement shall include the usual and customary terms of residential rental agreements in the City and County of San Francisco that do not conflict with the terms of this Section. Where the Resident Tenant has the right to use certain common areas of the property, as, for example, parking or storage, or the right to have pets, those rights shall be included in the written agreement.
(i) A Notice of Right to Lifetime Lease shall be in the following form, printed in 12 point type or larger:
NOTICE OF RIGHT TO LIFETIME LEASE
TO: (name of tenant)
RE: (address of unit)
This Notice of Right to Lifetime Lease is given to you as required by Section 1399.8A of the San Francisco Subdivision Code. If the property in which you live becomes a Limited Equity Housing Cooperative and you do not purchase a members share, you will have a lifetime lease.
A. The lifetime lease will start on the date that the subdivision map for the Limited Equity Housing Cooperative is recorded with the San Francisco Recorder. In consideration of the benefit of this Article 11 to the Subdivider and any successors in interest from permitting the conversion of buildings of 2 units or more, the Subdivider and all subsequent owners shall agree to waive any right to any rent increase other than as provided in Article 11 that may be permitted by any other provision of law, and to waive any claim against the City of a taking under the California or United States Constitution based on the lifetime lease provision. The waivers will be binding on any heirs, successors in interest, or assigns.
B. The following terms will be incorporated into your lifetime lease.
1. The initial rent payable under the lifetime lease shall not exceed the rent charged on the date the application for the Certificate of Clearance is submitted, plus ten (10) percent. Subsequent annual rent increases may not exceed the average annual percentage increase in Carrying Charges paid by all Resident Members. At no time may rent for a unit occupied by a Qualifying Household exceed the Maximum Annual Rent as provided in the San Francisco Subdivision Code Section 1399.3.
2. You have a right to terminate your lifetime lease at any time on thirty days prior written notice to your landlord.
3. The lifetime lease automatically terminates only on the death of the last person named as a tenant in the lease or when you no longer actually and continuously reside in the unit as your sole place of residence.
4. Your landlord may terminate the lifetime lease during its term only if:
a. you fail to pay the rent to which the landlord is lawfully entitled under the oral or written agreement between you and the landlord or you habitually pay the rent late or give checks which are frequently returned because there are insufficient funds in the checking account;
b. you have violated a lawful obligation or covenant of tenancy other than the obligation to surrender possession upon proper notice and you have failed to cure the violation after having received written notice of it from the landlord; provided that notwithstanding any lease provision to the contrary, your landlord shall not endeavor to recover possession of your unit as a result of your subletting the unit if your landlord has unreasonably withheld the right to sublet following a written request from you, so long as you continue to reside in the rental unit and the sublet constitutes a one-for-one replacement of the departing tenant(s) as set forth in Rent Board Regulations 6.15A(d) and 6.15B(b).
c. you are committing or permitting to exist a nuisance in or are causing substantial damage to the rental unit, or you are creating a substantial interference with the comfort, safety or enjoyment of the landlord or tenants in the building;
d. you are using or permitting the unit to be used for any illegal purpose;
e. you have, after written notice to cease, refused the landlord access to the unit as required by state or local law; or
f. you are a subtenant holding at the end of the term of an oral or written lease not approved by the landlord.
5. If, on the date the application for conversion is submitted to the San Francisco Department of Public Works, one of the following persons lives with you at the unit and is an adult and who, for purposes of this ordinance, has occupied the unit for at least one year prior to the date of submission of the application for a Certificate of Clearance, at your request the landlord must name that person as a tenant on the lifetime lease, even if the landlord has not previously accepted that person as a tenant: your grandparent, grandchild, parent, child, brother, sister, spouse, or domestic partner.
6. You may not assign or transfer the lifetime lease. However, you may allow other persons to occupy the unit with you to the same extent as allowed under the existing agreement between you and your landlord so long as you actually and continually reside in the unit as your sole place of residence and you give the landlord the name of each person who resides in the unit with you and emergency contact information for that person. You must give any person who resides in the unit with you notice that he or she is not a tenant and has no rights under the lifetime lease.
7. At your landlord's request, you must enter into a written lease with your landlord that includes those terms of your existing rental agreement that do not conflict with your rights under the lifetime lease. If you do not have a written rental agreement, the written lifetime lease will contain provisions usually and customarily found in a residential rental agreement in San Francisco that do not conflict with your rights under the lifetime lease.
Date:____________
____________
Signature of Subdivider
Signature of Subdivider
(j) If any provision of this Section 1399.8A is found to be unenforceable in a court of law, then the Department shall no longer accept and cease to process any applications for conversion submitted under this Article XI as of the date of the determination by the court.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
(a) The initial purchase price for each Member Share under this Article shall be determined by a formula as specified in this Section.
(b) The initial purchase price at conversion shall be set as of the date of the Subdivider's Notice of Intent to Convert and shall not exceed the following:
(1) For purchasing tenants who are members of a Qualifying Household, the initial purchase price may not exceed: (10% × [Total Development Cost]) ÷ [total number of units to be converted].
(2) For all other purchasing tenants there is no limit on the initial purchase price for a member share.
(c) The Carrying Charge for Resident Members who reside in a Qualifying Household shall not exceed the Maximum Annual Rent as provided herein.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
(a) For projects receiving funding under the Real Ownership Opportunities program, the Subdivider must provide a written Notice of Intent to Convert as provided in California Government Code sections 66452.8 and 66452.9 no later than 60 days prior to filing the application packet under Section 1399.17. For all other projects, the Subdivider shall provide a written Notice of Intent to Convert to each of the tenants in the building as provided in California Government Code sections 66452.8 and 66452.9 as applicable, outlining the tenant's rights under this Code, and the method by which the purchase price for a Member Share shall be calculated no later than 60 days prior to filing the application packet under Section 1399.17 ("Conversion Notice").
(b) Subdividers required to provide a Conversion Notice shall indicate the initial purchase price as provided in Section 1399.9 in the Conversion Notice.
(d) Subdividers required to provide a Conversion Notice shall attach to the Conversion Notice an "Intent to Purchase" form and a "Notice of Right to Lifetime Lease" form, both to be executed by the tenant or tenants who intend to purchase. The Intent to Purchase form shall be in the form provided in Section 1399.15. The Notice of Right to Lifetime Lease shall be in the form provided in Section 1399.8A(i).
(e) In the event that a Subdivider required to provide a Conversion Notice has not been able to obtain a majority "opt-in" response along with the required Income Certificates after providing proper notice, the Subdivider may extend the compliance deadlines by sending an extension notice to all of the tenants.
(Added by Ord. 319-08, File No. 081513, App. 12/19/2008)
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