What does a condo conversion mean to the tenants of an apartment building that is being transformed?
It means they don't always immediately know whether to buy their rental unit or move out within the standard three-year notice period. And in many cases, neither one is a feasible option.
In Jersey City, 38 applications for condo conversions were submitted to the city from January to June of this past year, with hundreds of predominantly low-income tenants having to make plans to leave.
In some cases, they were leaving rent-controlled units in which they have resided at least 10 years or more. What does a condo conversion mean to the tenants of an apartment building that is being transformed? It means they don't always immediately know whether to buy out their rental unit or move out within the standard three-year notice period. And in many cases, neither one is a good option. In Jersey City, 38 applications for condo conversions were submitted to the city from January to June of this past year, with hundreds of predominantly low-income tenants having to make plans to leave. In some cases, they were leaving rent-controlled units in which they have resided at least 10 years or more.What is a condo conversion?
A condominium conversion is the process of transforming rentals in a building into individual units for sale.
The state has several laws that govern how conversions can take place. Those laws are intended to protect both the owner and the tenants.
Essentially, a conversion works like this: An owner who plans to convert a building must first give each tenant two separate documents - a notice of intent to convert and a full plan of conversion. They must be sent by certified mail.
Then, at least 60 days later, the owner must give tenants a three-year notice to vacate the rental unit because of the conversion. Tenants' rights
A tenant is expected to look for comparable housing during the three-year period, a task that landlords sometimes help with.
If comparable housing is not provided to the tenant within the three years, they may be entitled to five one-year stays of eviction.
After the first one-year stay, a landlord may try to relocate the tenant or buy the tenant out by paying the tenant for five months' rent, or by waiving five months' rent and allowing the tenant to remain in the unit for a five-month period.
During the three-year notice period (or up to eight years in the case of five one-year stays), rent increases cannot be "unreasonable." After the three-year notice period, the landlord may file for an eviction if he or she chooses.
State law protects certain groups from eviction for up to 40 years: qualified senior citizens and the disabled. There are also county laws that protect certain disadvantaged groups.
During the protected period, these tenants must continue to pay rent and follow reasonable rules and regulations, or they can be evicted for a reason such as nonpayment of rent.
Tenants who decide they want to stay in their old apartment/new condo are given a chance to purchase their condos at an "insider price," or discounted price offer that usually stands for 90 days before it is offered to the public at a higher cost.
Rental apartments that undergo the transformation to condominiums are often remodeled with new floors, shelves, and cabinets. Dealing with it
Ted LeBlond saw the impact of condo conversion on the changing value of his residence at Dixon Mills, the 467-unit apartment complex on Wayne Street in Downtown Jersey City. The massive complex was once a pencil factory.
The buildings were sold in November of last year to a New York real estate group - which has been converting the rentals into condos.
"I have a studio apartment, and it's about 450 square feet, and my rent is $1,045," LeBlond said last week. "The insider selling price is $224,000 for my apartment ... and from what I heard, if I bought it, I would get it as is."
LeBlond said for the $1,800-a-month mortgage payment that he calculated he would potentially pay for his old apartment/new condo, he could rent at the Grove Pointe, the new 29-story building with 67 condominiums and 458 rental apartments located across from the Grove Street PATH Station.
But he doesn't intend to move any time soon. LeBlond, who suffers from HIV, said he will only move if he ends up with a new job that requires him to be closer.
So for now, he said, he will wait out the three-year period for a tenant to move out. 'Who do we go to when we're crying?'
One city resident believes that despite the rules, there are plenty of ways in which landlords in the city can take advantage of tenants, especially if they are considering condo conversion.
Carol Dowd believes the owners of her building, 239 Beacon Ave., are about to convert the apartments into condos. Her landlord recently fought for and won the right to double the tenants' rents over the next four years.
Dowd, who grew up in the 16-unit building and still resides there, recently went through a battle along with her fellow tenants against the landlord, Jeff Curtis, over the proposed increases.
The two sides fought in hearings in front of the city's Rent Leveling Board. The board decided at a special meeting on Dec. 10 to let Curtis increase the rent 100 percent over a four-year period.
Dowd said the landlord claimed he needed to raise the rents in the 16-unit building due to economic hardship because of payments on a loan to purchase the building, as well as costs of heating oil, taxes, and property repairs.
But Dowd believes he is pursuing the increase because he wants to get all the tenants out of the building, and eventually convert it to condos that he can sell.
"He goes and cries that he loses money, and yet he is creating a whole new sidewalk in front of the building when the old sidewalk was done about two years ago," Dowd said. "The board goes ahead and approves this increase and we could be out of our apartments. Who do we go to when we're crying?"
For his part, Joseph Pojanowski, the attorney for the owner, said last week that Curtis had initially considered converting the apartments into condos, but now, the current market for condos does not make it feasible. Condo conversion = home ownership
In Jersey City, there is someone whom tenants can go to.
Charles Odei has been the director of the city's division of Tenant/Landlord Relations since 2001.
Odei has seen numerous tenants come to his office on the issue of condo conversions.
His office hands them paperwork on their rights during a conversion.
Odei said that while he sympathizes with low and middle-income tenants who may have to move because of a potential condo conversion, it can also be an opportunity for them.
"If a specific building owner wants the building to become condo, he doesn't have to justify his actions," Odei said. "This could be more for the public good, since this gives people a shot at home ownership."
He continued, "Let's suppose the whole building is $2 million, and I can't buy it because I am not rich. Say the units are sold for $100,000 as opposed to $2 million. The public now has a better shot, where it gives ordinary people the chance to buy into the American Dream."
When asked if there are $100,000 condos available in the city, Odei pointed out there are $150,000 condos available in some parts of the city. Has seen it all
Jorge Aviles has been a tenant's rights attorney for over 25 years, working out of his Newark Avenue office.
Recently, he represented the tenants of 239 Beacon Ave.
Aviles said he remembers when condo conversions were in their heyday between 1983 and 1985. He sees a parallel between that time and what took place late last year in Jersey City.
"When the condo conversions started to accelerate out of control, we were losing so many tenants," Aviles said. "We got a reprieve when the real estate market started to tank in the late 1980s."
Aviles said that this year, condo conversions have slowed, not only because of the downturn in the real estate market but also because in many cases, the buildings that are going from rentals to condos are not offering enough amenities (like on-site parking) to attract potential buyers.
"The real estate market is especially dead now, with plenty of existing condo units not even selling because they don't offer amenities," Aviles said. "Then, you have Dixon Mills that can provide shuttles to the train station and parking on site, while many of these buildings have some street parking or no parking at all."
Aviles has a twofold suggestion as to what would help to stem the problems that arise from condo conversions: the construction of more affordable housing in the city, and tenants getting organized to know their rights.
"The key to the survival is to organize and try to deal to with a pending condo conversion - in other words, get help," Aviles said. Comments on this story can be sent to rkaulessar@hudsonreporter.com.
Post a Comment