ARTICLE V. REGULATION OF CONVERSION OF RENTAL HOUSING TO CONDOMINIUMS OR COOPERATIVES1
18-300 Statement of purpose.
The intent and purpose of this article is as follows:
(1) To support the retention of rental housing in the city;
(2) To prevent large scale displacement of low-and moderate-income persons;
(3) To mitigate the impact on tenants displaced or threatened by displacement by the conversion of rental housing to condominiums or cooperatives;
(4) To mitigate the impact of such displacement on the city’s housing market;
(5) To provide opportunities for tenants and/or public entities to purchase rental housing in order to maintain perpetual affordability of that housing;
(6) To provide broad opportunities for persons to rent or own housing that will be perpetually affordable;
(7) To provide funds to replace low-and moderate-income housing lost through conversion of rental housing to condominiums and cooperatives;
(8) To promote the rehabilitation and construction of housing for low-and moderate-income persons;
(9) To follow recommendations of the Burlington Affordable Housing Task Force regarding the problems created by the conversion of rental housing to condominiums or cooperatives; and
(10) To expand on existing Vermont law related to conversions to address specific concerns of the city and its citizens and provide special benefits to existing tenants, especially elderly and disabled people.
(Ord. of 3-30-87)
18-301 Authority and applicability.
This article is enacted under the specific authority granted to Vermont towns and cities by 24 V.S.A. § 2293 and is applicable to the conversion of rental housing in the City of Burlington.
(Ord. of 3-30-87)
18-302 Exemptions.
(a) This article shall not be applicable to single-family homes and duplexes.
(b) This article shall not be applicable to properties that meet all of the following requirements:
(1) land tract with ten (10) or fewer housing units;
(2) a deed restriction making at least twenty-five (25) per cent of the housing units affordable to low income tenant households; and
(3) located in United States Census Bureau tract that contains less than fifty (50) per cent home ownership.
(c) This article shall not be applicable to short term rentals.
(Ord. of 3-30-87; Amend. of 1-8-07, eff. 2-14-07; Ord. of 6-27-22)
18-303 Definitions.
The following definitions shall apply in the interpretation and enforcement of this article:
Application fee means a fee of twenty-five dollars ($25.00) per residential rental unit proposed to be converted to a condominium or cooperative. The application fee shall be paid to the city, and the proceeds from this fee shall be used by the city for the specific purpose of administering this article. The amount paid as the application fee shall be deductible from the amount due as the impact fee if the conversion actually takes place.
Certified tenant organization means a bona fide association of resident tenants of a rental property, as certified by the community and economic development office. To receive such certification, the tenant organization of a property having three (3) to ten (10) rental units must represent at least fifty (50) per cent of the units occupied by tenants who have lived in their unit for more than ninety (90) days; the tenant organization of a property having more than ten (10) units must represent at least thirty (30) per cent of the units occupied by tenants who have lived in their unit for more than ninety (90) days.
Condominium conversion fee means a four (4) per cent fee on the actual sale price of residential units converted from rental housing to condominium or cooperative ownership. The condominium conversion fee is due at the time of property transfer of each individual residential unit prior to the recording of the deed or the proprietary lease for the transfer with the city clerk. The condominium conversion fee applies only at the time of the original conversion of the residential unit to a condominium or cooperative and not to any subsequent sale or transfer of the condominium or cooperative unit.
Conversion means a change in character of residential real property from a rental to an ownership basis. A condominium, stock cooperative or similar arrangement shall be deemed such a change in character of ownership.
Designated housing agency means a public entity or a 501 (c)(3) tax-exempt, nonprofit corporation whose purpose is creating or preserving housing for low-and moderate-income persons. The city’s designated housing agency or agencies shall be designated by the city council.
Disabled tenant means a tenant who has a physical or mental impairment which restricts one or more major life activities, including functions such as caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning or working.
Elderly tenant means a tenant who is sixty-two (62) years of age or older or the surviving spouse of such a tenant who is at least fifty (50) years of age.
Low-income tenant household means a household having an income not exceeding eighty (80) per cent of median income for area of residence as set forth in regulations promulgated from time-to-time by the United States Department of Housing and Urban Development pursuant to 42 U.S.C. section 1437 et seq.
Moderate-income tenant household means a household having an income not exceeding one hundred ten (110) per cent of median income for area of residence as set forth in regulations promulgated from time-to-time by the United States Department of Housing and Urban Development pursuant to 42 U.S.C. section 1437 et seq.
Notice to tenants means the written notice to vacate or purchase a residential unit that a landlord is required to send by certified and regular mail to the current tenants of any rental property that is slated for conversion.
(Ord. of 3-30-87; Amend. of 1-8-07, eff. 2-14-07)
18-304 Notice to tenants.
(a) When an owner of rental housing decides to convert that housing to condominium or cooperative ownership, the owner shall give to each tenant the following minimum written notice to vacate or purchase the unit: Four (4) years to elderly and disabled tenants; two (2) years to all other tenants. The burden shall be on the tenant to prove that he or she qualifies as meeting the definition of "elderly" or "disabled" as defined in this article.
(b) The notice shall state that the rental housing is to be converted to condominium or cooperative ownership. It shall set forth generally the rights of tenants and certified tenant organizations under this article and the Vermont statute related to conversions (27 V.S.A. section 1331 et seq.). The notice shall be given by certified mail, return receipt requested, at the address of the housing unit or any other mailing address provided by the tenant. A copy of the notice shall also be sent by regular mail to the address of the housing unit or any other mailing address provided by the tenant. Failure to give notice as required by this article and the Vermont statute is a defense to an action for possession.
(c) During the notice period, a tenant may not be required to vacate except for a reason specified in subsection (a) or (b) of Section 4467 of Title 9 of Vermont Statutes Annotated.
(d) During the notice period, rent increases shall be limited to an amount which reflects reasonable profits, actual increased costs of maintenance and operation of the housing unit subject to conversion. Costs associated with the proposed conversion are not a permissible basis for a rent increase.
(e) After receipt of the notice, prescribed in paragraph (a) above, a tenant may terminate the rental agreement upon thirty (30) days’ written notice to the owner.
(f) Nothing in this section permits termination of a written lease by an owner in violation of its terms.
(g) The notice requirements imposed by this article shall not affect the right of an owner to transfer ownership interests in housing units which are not subject to those requirements or as to which the notice period has expired.
(h) The notice period shall end four (4) years after the receipt of the written notice for elderly tenants, or two (2) years after the receipt of the notice for all other tenants, or when the existing lease ends, whichever is later.
(Ord. of 3-30-87; Amend. of 1-8-07, eff. 2-14-07)
18-305 Right of tenant organizations, public entities, nonprofit corporations, and individual tenants to purchase.
(a) A certified tenant organization or the City of Burlington or the city’s designated housing agency shall have the first right to purchase any rental housing that is proposed to be converted to condominium or cooperative ownership.
(b) This first right to purchase in a certified tenant organization, the city or its designee goes into effect at the time the first notice to tenants required by this article is issued by the owner. A copy of all such notices shall be sent to the certified tenant organization, the city and the city’s designated housing agency or agencies. This first right to purchase shall be a prior right to the right of an individual tenant to purchase his or her individual unit described in paragraph (i) below.
(c) At the request of the certified tenant organization, the city or the city’s designated housing agency, the owner shall provide within seven (7) working days of the request the following materials:
(1) A copy of any bona fide contract for sale which already exists between the owner and a third party;
(2) A rent schedule for the housing units;
(3) Operating expenses and income for the property for the previous two (2) years;
(4) List of capital expenditures for the previous five (5) years;
(5) Floor plans of the housing units and any common areas; and
(6) A list of any outstanding mortgages or liens against the property.
(d) The parties which have a first right to purchase the property have ninety (90) days to sign a purchase and sale agreement with the owner, contingent upon the prospective buyer’s ability to obtain financing. If the owner has not provided the information listed in paragraph (c) above to the certified tenant organization, the city or the city’s designated housing agency within the specified seven (7) working days, each day’s delay shall be added to this ninety-day period. The city or its designated housing agency may enter into such an agreement if and only if a certified tenant organization does not choose to do so.
(e) The sale price of the property shall be set either by a bona fide contract of sale which already exists with a third party at the time of the notice to tenants or by an appraisal process which has both the owner and prospective buyer commissioning an independent appraisal and a third appraiser reviewing the two (2) appraisals if the two (2) parties cannot agree on a price or the two (2) original appraisals are more than ten (10) per cent apart.
(f) As part of a purchase and sale agreement, an owner may require a deposit of earnest money by the certified tenant organization, the city or its designated housing agency. The owner shall not require an earnest money deposit which is more than five (5) per cent of the total purchase price, nor can the owner require this deposit to be nonrefundable.
(g) After signing the purchase and sale agreement, the prospective buyer shall have an additional one hundred eighty (180) days to obtain financing and to settle.
(h) If the first right to purchase the rental housing is not exercised by the certified tenant organization, the city or the city’s designated housing agency, the owner is free to proceed with the conversion of the property to condominium or cooperative ownership subject to the provisions of this article, the city’s zoning ordinance and Vermont statutes.
(i) After the time period for the certified tenant organization, the city or the city’s designated housing agency to exercise its first right to purchase expires, individual tenants in housing units proposed to be converted to condominiums or cooperatives shall have the ninety-day exclusive right to purchase their individual unit, the right to be offered and to accept comparable housing, and the right to receive relocation costs as provided in 27 V.S.A. sections 1334, 1335 and 1336. The additional protections offered to tenants by 27 V.S.A. sections 1337, 1338 and 1339 are also specifically protected by this article.
(Ord. of 3-30-87)
18-306 Application fee.
(a) An application fee of twenty-five dollars ($25.00) per rental unit proposed to be converted by an owner to condominium or cooperative ownership shall be payable to the city at the time the original notices to tenants are issued by the owner. The amount of the application fee may be adjusted as necessary by the city council.
(b) This fee is for the specific purpose of covering the cost of administering this article by the city.
(c) The application fee shall be nonrefundable, but shall be deductible from any impact fee which shall be due if the conversion takes place.
(Ord. of 3-30-87)
18-307 Condominium conversion fee.
(a) If a conversion of rental housing to condominium or cooperative ownership occurs, the seller of the units shall pay to the city a condominium conversion fee of four (4) per cent of the actual purchase price of each unit, assuming this purchase price is based upon the fair market value of the unit as determined by a certified appraiser. There shall be no reduction in this fee for closing or rehabilitation costs.
(b) The condominium conversion fee shall be paid prior to the recording of the deeds or proprietary leases for the transfer of the housing units.
(c) Prior to the recording of the deeds or proprietary leases for any transfer of the housing units, the seller shall provide documentation to the city that the notice requirements have been met, and that the first right of purchase processes set out in this article have been followed.
(d) The city shall certify that the article has been complied with and that the condominium conversion fee has been received prior to the recording of the deed or proprietary lease for the transfer of the property.
(e) The condominium conversion fee applies to the conversion from rental housing to condominium or cooperative ownership only and not to any subsequent sale(s) of the condominium or cooperative unit.
(f) The proceeds from the condominium conversion fee shall be paid into a trust fund established by the city council for the promotion, retention and creation of low-and moderate-income housing in the city and for the accomplishment of the goals set out in the statement of purpose of this article.
(g) The condominium conversion fee provision shall not apply to the acquisition of and conversion to condominium or cooperative ownership of rental housing by the certified tenant association, the city or the city’s designated housing agency. Also, the condominium conversion fee provision shall not apply to sales of individual condominium or cooperative units to the tenant who resided in such unit at the time that the notice required by section 18-304(a) was given.
(Ord. of 3-30-87; Amend. of 1-8-07, eff. 2-14-07)
18-308 Circumventing of this article.
An owner shall not attempt to circumvent the provisions of this article; nor shall any person willfully cause a tenant to vacate a dwelling unit or to be evicted from the unit without good cause in contemplation of conversion before the issuance of the notice prescribed in section 18-304(a).
(Ord. of 3-30-87)
18-309 Penalty; civil remedies.
(a) It is hereby declared that any person who is found guilty of violating any provision of this article shall be deemed to have committed a civil ordinance violation which shall be punishable by a fine of not less than two hundred ($200.00) dollars and not more than five hundred ($500.00) dollars, and such violation shall be abated as a nuisance. Each day of such violation shall constitute a separate offense.
(b) In addition, any person who is injured as a result of a violation of this article may seek to recover damages and other just relief as contemplated by Section 54 of the Charter of the City of Burlington. Also, the City of Burlington may bring an action for equitable relief in the Chittenden Superior Court to restrain actual or threatened violations of this article as contemplated by Section 49 of the Charter of the City of Burlington.
(Ord. of 3-30-87; Amend. of 1-8-07, eff. 2-14-07)
18-310 Severability.
The provisions of this article shall be regarded as severable and should any portion thereof be held invalid, such invalidity shall not affect any other portion of such article.
(Ord. of 3-30-87)
18-311 Additional regulations to administer this article.
The city council shall have the authority to promulgate additional regulations if necessary to administer the provisions of this article.
(Ord. of 3-30-87)
18-312 Relocation costs.
(a) The owner shall pay the actual documented cost of relocation, not to exceed one thousand dollars ($1,000.00), to any tenant entitled to receive notice under section 18-304 who does not purchase the unit which he or she occupies or another unit in the same building or buildings.
(b) Relocation costs shall be payable within ten days after the date the tenant vacates the unit; provided, however, that no tenant is eligible for relocation costs unless:
(1) all rent due and payable has been paid by the tenant prior to the date on which the unit is vacated; and
(2) the tenant has voluntarily vacated the unit on or before the expiration of half the applicable notice period.
(Amend. of 1-8-07, eff. 2-14-07)
18-313—18-399 Reserved.
Editor’s note—An ordinance passed by board of aldermen March 30, 1987, amended the Code by adding a new Art. V; §§ 18-300—18-312, to Ch. 18. Since the provisions of this ordinance set out as § 18-312 pertained to the effective date of the ordinance, and thus of nature not normally set out in the Code, the editor, at his discretion, has not included them in Art. V.