I have a question about one of the exceptions in the Costa Hawkins Rent Housing Act. Section 1954.52(a)(3)(B)(ii): “[a] condominium dwelling or unit that has not been sold separately by the subdivider to a bona fide purchaser for value.”
I am trying to determine how the below scenario is affected by that exception: A multi-unit building is subdivided by an owner, then a renter of a unit moves in in 2006 after the subdivision, then that subdividing owner dies in 2007 after the renter had moved in. Finally, in 2007 the entire building is purchased by a single new owner (the condos are never marketed or sold separately), who continues to operate the building like an apartment building.
Does this mean the renter that moved in in 2006 is still covered by rent control? How does the fact the property was sold as one entire building to one buyer and continued to operate as an apartment building affect the situation? Does that trigger the “has not been sold separately” part of this exemption to the Costa-Hawkins Housing Act and thus the unit remains under rent control?
~Ryan from San Francisco, CA.
Thank you for your question, Ryan. We would actually need a bit more information to fully answer, but just for a quick survey of the facts you emailed:
“A multi-unit building is subdivided by an owner”
* This isn’t really relevant (because all condos are subdivided by an owner or owners). The relevant issue for your question is whether this was done before or after the 2001 amendment to Costa Hawkins that added the subdividing condition you’re talking about – Cal. Civ., §1954.52(a)(3)(B)(ii).
“Then a renter of a unit moves in in 2006 after the subdivision.”
* This… probably isn’t relevant. There is a pending appeal from a San Francisco Rent Board decision where the Rent Board held that the relevant date is the date the tenancy commenced (i.e., whether it started before or after the 2001 amendment was enacted) as opposed to when the multi-unit structure was subdivided. Here at Costa-Hawkins.com, we’re fairly certain the relevant inquiry is if the unit was completely subdivided before the 2001 amendment, not whether a tenancy commenced afterward.
“Then In 2007 the entire building is purchased by a single new owner (the condos are never marketed or sold separately) who continues to operate the building like an apartment building.”
* Again, unless the subdivision occurred before the effective date of the 2001 amendment or the units come within the conditions of its exemption, probably these are still covered by the Rent Ordinance.