Last March the Boston City Council and Mayor’s office approved an amendment to the Boston Condominium and Cooperative
Conversion Ordinance (“Boston Conversion Ordinance”). Here is an overview of the Boston Conversion Ordinance and a summary of the changes and new requirements.
The protections and benefits under the
Boston Conversion Ordinance (most notably the re-location payments) are greater
and more extensive than those under state law.
Conversion Ordinance Overview
The conversion of certain apartments to
condominiums (or cooperative units) is governed by state law or, where
applicable, municipal ordinance as towns and cities can enact stricter
provisions, like Boston has done. The Boston Conversion Ordinance -- like the
state law -- applies to any residential property built before December 1983
that has four or more rental units. The state ordinance and Boston Conversion
Ordinance are triggered when the owner intends to convert a multi-family
residential property to a residential condominium or cooperative use. State law
or applicable ordinances then kick in to provide certain protections to the
tenants.
The basic protections afforded to tenants
under the state and local conversion ordinances are:
• Notice Period (during which tenants
cannot be evicted)
• Limits on rent increases (during the
notice period)
• Right of First Refusal (to purchase the
converted unit)
• Re-Location Payments (per household)
The Boston Conversion Ordinance provides
enhanced protections for low-moderate income tenants, disabled tenants, and elderly
tenants. The protections and benefits under the Boston Conversion Ordinance
(most notably the re-location payments) are greater and more extensive than
those under state law.
The Updates
The new amendment to the Boston Conversion Ordinance revises the conversion process in several material ways: (1) it requires the owner to work with the Department of Neighborhood Development (DND) to create a Conversion Plan; and (2) it requires the owner to obtain a Conversion Permit from the Inspectional Services Department (ISD) before units are sold.
The New Process
Once a Boston property owner decides to
convert their rental property (assuming it is a pre-1983 building with four or
more units), the owner must:
1. Notify Tenants
of their Rights under the Boston Conversion Ordinance (with a copy to DND).
2. Apply and
obtain a Conversion Plan from DND (landlords must apply even if building is
vacant).
3. Apply for a Conversion Permit from ISD ($1000 per unit).
Legal – Recording the Master Deed
The legal conversion of the property from
multi-family to condominium occurs when the land and building are submitted to
condominium form of ownership by the recording of a master deed. The new
amendment to the Boston Conversion Ordinance relates to the conversion as it
impacts the occupancy of the housing and does not change the legal conversion
process of the property. An owner of property covered by the Boston Conversion
Ordinance may file a master deed with the Suffolk County Registry of Deeds at
any time, thereby completing the legal conversion of the property, but cannot
sell a particular unit (and alter the occupancy of the premises) until a
conversion permit has been issued by the City’s ISD for that unit.
Financial – Conversion Tax
A
final practice point for those in Boston that is not new but is unique: there
is also an excise tax (the “Tregor tax”) levied at $500 per condominium
(exempting the first unit), which must be paid prior to the recording of the
master deed. The Suffolk County Registry of Deeds will not record a master deed
(or amendment adding units) if the master deed does not have a Tregor Stamp.
A member of the Association’s condominium law and Practice Section, Kate is an associate in the Boston and Quincy-based firm of Moriarty, Troyer & Malloy LLC. She possesses years of experience in condominium and real estate litigation and recognized expertise in fair housing, affordable housing and the myriad of statutes and regulations which apply. Kate can be contacted by email at kbrady@lawmtm.com
