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HomeMy WebLinkAboutOB 1 CALIFORNIAN CONV 05-03-82DATE: May 3, 1982 OLD BUSINESS 5-3-82 Inter-Corn TO: FROM: SUBJECT: Honorable Mayor & City Council Community Development Department Relocation & Purchase Plan, Californian Condominium Conversion 14882 Newport Avenue Attached is the revised relocation and purchase plan for the subject conversion as approved by Variance No 81-8. This document is the result of meeting with the developer, Cal State Associates, Planning Staff and the City Attorney. The two areas of concern were resolved as follows: 1. Eligibility Disqualification, Page 3, has included the requirement that legal proceedings against a tenant by the owner must be concluded adversely against him/her before such a disqualification is determined. 2. Rent Raises, Page 6, now requires prior City Council approval. One issue which the City Council should decide upon is the definition of "tenant" when referred to a benefit program. The owner of the project has defined "tenant" as it has been viewed by staff and as in previous benefit plans as those apartment occupants collectively as one unit rather than any one individual. Another item of concern was the definition of "tenant." When Ordinance No. 822 (Condo Conversion) was drated, the reference of "each person who is a tenant" was included in the benefit package to cover in the plan each occupant who may have been a signatore to the rental/lease agreement. It would then be assumed that the shared total rent of a unit could be paid back proportionally in the benefit package. As an example, if two tenants {those who signed the original rental agreement) share the rent equally on a $500 per month unit, each tenant would receive twice his portion of that amount (2 x $250 = $500). The $600 minimum payment was included in the Ordinance to protect against a last month's rent decrease in an effort to reduce the benefit payment. If the City Council affirms that it was their intent that the tenant be defined in this manner, then staff believes the Relocation and Purchase Plan is in conformance with Ordinance 822 and would recommend approval. City Attorney's memo to be included in supplemental packet. AGW:jh 4-28-82 RELOCATION AND PURCHASE PLAN FOR THE CALIFORNIAN CONVERSION In accordance with Tustin City Code Selction 9274e(4) Cal State Associates, Inc. will implement the following tenant relocation/purchase plan. Each plan is mutually exclusive of the other and participation in one disquali- fies the tenant for participation in the other. RELOCATION/PURCHASE COORDINATOR An on-site coordinator has been appointed to assist tenants with their individual relocation or purchase efforts during the conversion process. The coordinator will have the primary responsibility of assisting the tenants with their relocation or purchase plan and will handle all communications between the tenants affected by the conversion process and Cal State Associates, Inc., the developer of the project. The coordinator will be available to assist tenants who elect the "tenant relocation plan" by: 1. Overseeing that prompt payment of all relocation monies due under this program is paid to the tenants. 2. Providing tenants with a directory of available rental housing units. 3. Advising tenants of reliable moving companies who will discount their regular prices by 15~ to Californian relocation tenants. 4. Supervising the prompt refund of security and damage deposits to tenants as provided for in Section 1950.5 of the California Civil Code. 5. Coordinating notification to tenants of repair or improvement work, inspections and showing of the units to prospective purchasers or mortgagees. The coordinator will also assist the tenants electing to participate in the "tenant purchase program" by: 1. Providing explanation of the methods for purchase available to each tenant if requested. 2. Providing information concerning lending institutions and their rates and charges. 3. Advising tenants of all price discounts for which they may qualify under this plan. TENANTS ELIGIBILITY REQUIREMENTS Ail entitlements due under this Relocation and Purchase plan will be on a per unit basis not per person. "Tenant" refers to the apartments occupants collectively as one unit rather than any one individual. Where more than one person occupies an apartment and each person has signed the rental agreement, the benefits of the plan will be distributed to the individuals on a prorata basis in equal shares. One must be a signatory on the rental agreement in order to qualify as a "tenant". In order to qualify for participation in the "tenant relocation plan" or the "tenant purchase plan" the tenant as previously defined must meet certain minimum eligibility requirements. Those requirements are: 1. The person or persons must have been a tenant of The Californian Apartments on January 18, 1982 (the date the conversion was approved by the Tustin City Council) and 2. They must have either: (a) remained a tenant for 120 days thereafter, or (b) remained a. tenant until required to vacate their apartment without cause being stated (i.e. given a 30-day notice without stating the reason) or (c) remained a tenant until the time of issuance of building permits by the City allowing the commencement of construction for the conversion (excluding permits issued to "repair" or do other non-conversion related work). -2- 3. A tenant who moves i~to his/her apartment after January 18, 1982 with the written consent of Cal StaTe Associates, Inc. and who did not prior to becoming a tenant receive written notification of the intended conversion is exempt from the qualification requirements as stated in Paragraphs 1 and 2 above and shall receive benefits as if those requirements had been satisfied in full. Although people who move into The Californian Apart- ments after January 18, 1982 and who received written notice are not eligible to participate in these plans, Cal State Associates, Inc. does reserve the right to waive these qualification requirements and allow a "new" tenant to receive benefits under either of these plans should it choose to do so. ELIGIBILITY DISQUALIFICATION A tenant may be otherwise eligible but will receive no benefits from this plan if he/she: 1. Fails to voluntarily vacate on or before the date requested in writing by Cal State Associates, Inc. provided the tenant is given at least 180 days written notice of intention to convert prior to any termination of a tenancy due to the condominium conversion. 2. Has had legal proceedings commenced against him/ her and concluded adversely against him/her arising out of acts which constitute a breach of the rental agreement; for example, but not by way of limitation, for failure to pay rent or failure to comply with a notice to perform covenant or surrender possession, or 3. Fails to grant access to their apartment to Cal State Associates, Inc. upon two days' notice for purposes of repair, improvements, inspection, for showing to prospective purchasers or mortgagees. TENANT ASSISTANCE PLAN GENERAL BENEFITS To qualified tenants who elect the relocation plan, Cal State Associates, Inc. offers a cash payment in compliance with Tustin City Code Section 9274e(4) (a). This payment will be paid on the same day as the tenant vacates his/her apart- ment. The amount paid to the tenant will be in accordance with the payment schedule in effect on the date of move out, but in no event will it be less than twice the amount of the last month's rent or $600.00, whichever is greater. -3- Initially, Cal State Associates, Inc. will offer to eligible relocation tenants the £ollowing payment based on their apartment configuration: MODEL 1 Bedroom, 1 Bath 2 Bedroom, 1~ Bath 2 Bedroom, 2 Bath AMOUNT $ 750.00 * 950.00 1~050.00 In no case will the payment be less than twice the rent of that unit. INCONVENIENCE BENEFITS In addition to the General Benefits outlined above, Cal State Associates, Inc. will provide its qualified tenants with certain payments for their inconvenience. MOVE OUT BEFORE NOTICE: Provided a tenant is (1) no~ in default of his/her rental agreement, and (2) was a tenant on January 18, 1982, and (3) remains a tenant after May 18, 1982 or vacates earlier at the request of Cal State Associates, Inc. the tenant will qualify for a payment on move out of an additional $100.00 for his/her general inconvenience. Tenants will qua&ify for this payment even though they move voluntarily provided the other requirements are met. Further, Cal State Associates, Inc. recognizes that there will be inconveniences caused by the conversion in the areas of dust, noise, lost parking and possibly temporary shut down of utilities. For this inconvenience Cal State Associates, Inc. will pay an additional $ 400.00 to all tenants eligible for the $100.00 inconvenience benefit above provided the tenants stay until notified by developer that their units are no longer available as rentals. -4- SPECIAL BONUS BENEFITS If the tenant has otherwise met the TENANT ELIGIBILITY REQUIREMENTS'as previously defined and remains a tenant of The Californian Apartments until notified by Cal State Associates, Inc. that their apartment unit is ho longer available as a rental~ the tenant will receive a bonus benefit. This bonus will amount to 15% of the relocation payment (not including inconvenience payment). SPECIAL PROVISIONS 'FOR LONG TERM TENANTS, ELDERLY~ DISABLED OR HANDICAPPED'PERSONS Any tenant who has otherwise met the TENANT ELIGIBILITY REQUIREMENTS, as previously defined and is either: 1. Long Term Tenant: A person who has been a tenant of The Californian Apartments continuously for 84 months prior to move out, or 2. Elderly: A person 60 years of age or older~ or 3. Disabled: As defined by U.S. Code, Title 42, Section 423, or 4. Handicapped: As defined by California Health And Safety Code, Section 50072 qualifies for'additional benefits. These tenants will receive ALL of the following: 1. Payment of $250.00 of moving company expenses incurred for relocation. _ 2. Waiver of the rent for the last 30 days before the required move out date. -5- SECURITY OR DAMAGE DEPOSITS Cal State Associates, Inc. will comply with Section 1950.5 of the'California Civil Code and refund to the tenants all of their security or damage deposits (excepting costs incurred fo~ other than normal wear and tear)~w%thin 14 days of the date the affected tenant vacates the premises. RENT RAISES Following approval of any tentative map or use permit there will be no rental increases ~ithout prior city council approval for :--tenants who qualify for the relocation/ purchase plan and who continue to occupy the same apartment from January 18, 1982 to date of move out. Ail other apartment units may experience rental increases as determined' by Cal State Associates, Inc. A tenant who has received his/her relocation benefits will not again qualify for the relocation/purchase plan. If the tenant chooses to relocate in another apartment in The Californian Apartment complex, the rental rate for the tenant at the new apartment will be at the then prevailing rate for non-qualifying tenants. REPAIR AND MOVE OUT NOTICES No tenant shall be unreasonable d~sturbed during building, remodeling or sales activities and except in an emergency situation shall be granted two days' notice * prior to requiring access for repair, improvements, inspections or showing to prospective purchasers or mortgagees. In addition to the 180 day notice as previously provided, tenants will be notified a minimum of 30 days before fheir move out date. A 60 day notification period is however preferred and whenever possible advanced notification of 60 days will be used rather than 30 days. -6- TENANT PURCHASE PLAN Any person who was a tenant at The Californian Apartments on or before January 18, 1982 and otherwise qualifies under the previously stated paragraph entitled "Tenants Eligibility Requirements" shall have the opportunity to purchase their own unit if possible or another unit in Phases 1-3. This opportunity shall be offered 60 days prior to the sale of the units to the general public. The prospective buyers under this plan will be offered: 1. A minimum 10% discount from the price per unit being offered to the general public. 2. A maximum price to the qualified tenant of 1 Bedroom, 1 Bath - maximum $65,000.00; 2 Bedroom, I~ Bath - maximum $80,100.00; 2 Bedroom, 2 Bath - maximum $90,100.00 3. An interest buy down program where the purchaser may receive loan interest rates as low as 12%. The buy down will vary with the amount of the down payment. A 5% down payment will qualify for a 2% buy down. In other words, if prevailing interest rates are 17~ and the tenant pays a 5~ down payment, the unit would be offered at a finance charge of 15~ (2~ off of prevailing); a 10~ down payment would qualify for a 3% buy down; a 15~ down payment would qualify for a 4% buy down; a 20~ down payment would qualify for a 5% buy down. No buy downs are to result in an interest rate of less than 12% per annum. All interest rates are written at the annual percentage rate as of the date of the purchase. The buy down interest rate will be effective for a period of three (3) years at which time the purchaser may either obtain his/her own financing or assume the existing loan which will at that time revert to the annual percentage rate in existence at the time of the purchase of the condominium unit. 4. In lieu of refurbishment by Cal State Associates, Inc. tenants who purchase will be offered a refurbishment allowance. The choice will be solely that of the tenant/ purchaser. The allowance is $15.00 per square yard for the unit purchased. 5. Tenants who financially qualify will be offered the opportunity if he/she wishes to participate in a shared appreciation program with an investor. -7- RELOCATION AND PURCHASE PLAN FOR THE CALIFORNIAN CONVERSION Submitted by: CAL STATE ASSOCIATES, INC. 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