Sec. 9-40. - Violations and penalties.
Sec. 9-41. - Applicability; license required.
Sec. 9-42. - Notification requirements.
Sec. 9-43. - Notice of intent to sell; tenants' rights; disclosure.
Sec. 9-44. - Inspections and repair.
Sec. 9-45. - Information for prospective purchasers.
Sec. 9-46. - Private right of action.
Sec. 9-47. - Filing complaint.
The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
Apartment building means any existing structure or group of structures containing five or more dwelling units for the purpose of multifamily occupancy.
Common elements means those words as they are defined in 25 Del. C. § 2202.
Condominium means a building or complex of buildings governed by the provisions of the Unit Property Act (25 Del. C. § 2201 et seq.).
Condominium unit means a single unit as defined in the Unit Property Act (25 Del. C. § 2201 et seq.) in a condominium, used or proposed to be used for residential, commercial, or other lawful uses.
Conversion means the change of rental units into condominium units resulting from the filing for recording with the recorder of deeds in the county of a declaration pursuant to the Unit Property Act (25 Del. C. § 2201 et seq.).
Declaration means that word as defined in 25 Del. C. § 2202, as amended, presently defined as "the instrument by which the owner in fee simple or lessee of the property submits it to the provisions of this chapter as hereinafter provided and all amendments thereof" and containing the contents required by 25 Del. C. § 2219.
Declaration plan means that term as defined in 25 Del. C. § 2202.
Developer means any person who undertakes the conversion of an apartment building to a condominium.
Dwelling unit means any room or group of rooms located within a dwelling and forming a single habitable unit with facilities which are used or intended to be used for living, sleeping, cooking and eating.
Engineer's report means the report of a duly registered engineer licensed in this state stating the present condition of all structural and major utility installations in the condominium, to include the type of construction or utility installation, the age, approximate remaining useful life, and approximate present replacement costs of all elements or components that need replacement including roofs, electrical wiring, plumbing, water heaters, heating systems and units, and air conditioning systems and units. The engineer's report may be supplemented by reports of duly licensed professional architects. With respect to structural elements, such as foundations, bearing walls, perimeter walls and floors, the present costs of remedying any structural deficiencies found shall be stated.
Handicapped means that term as defined in federal legislation prohibiting discrimination against the handicapped, the Rehabilitation Act of 1973, as amended.
Offer for sale to the public means any advertisement, inducement, solicitation or attempt by a developer, or his agent, or by any person who has legal or equitable ownership of an apartment building, or his agent, to encourage any person, other than a tenant, to purchase a condominium unit in such building.
Recorded means that an instrument has been duly entered of record in the office of the recorder of deeds for the county.
Recorder means the recorder of deeds for the county.
Tenant means any person entitled to occupy a dwelling unit primarily for purposes of habitation under a lease or rental agreement, written or oral.
Unlawful practice means the violation of, failure to comply with or attempt to avoid the application of the provisions of this article.
Vacancy rate means that percentage of the total number of dwelling units in apartment buildings which are vacant and available for occupancy.
(Code 1968, § 35-60)
Cross reference— Definitions and rules of construction generally, § 1-2.
The purpose of this article is to establish basic minimum regulations applicable to conversions of apartment buildings to condominiums.
(Code 1968, § 35-58)
It is hereby determined and declared as a matter of legislative finding that:
(1)
The recent development in the city of a phenomenon, identified as the conversion of existing apartment buildings and the rental units therein to condominiums and condominium units, has had a substantial impact upon the city and its residents.
(2)
Condominium conversions have exacerbated the already existing serious shortage of sanitary, decent and safe rental housing within the city and that this shortage has been a major contributing factor in the deterioration of the quality of the environment and living conditions of a large number of persons and families within the city, thereby seriously affecting the public health, safety and welfare.
(3)
The continued unregulated conversion of multifamily rental units to condominiums and the failure to date of private enterprise to provide sufficient additional multifamily rental housing constitute a serious menace to the health, safety, morals and general welfare of the people of the city and regulation of the conversion of multifamily housing to condominium units is necessary in order to prevent sudden and traumatic dislocations of elderly and handicapped city residents, disorderly restructuring of existing neighborhoods, dislocations and distortions in the already overburdened rental housing market, and to provide for the maintenance of an orderly rental market as well as for the security of existing apartment dwellers within the city.
(4)
The city has enacted legislation authorizing the issuance of multifamily residential bonds in order to encourage entrepreneurs to construct new multifamily dwelling units in the city and to make substantial improvements to existing multifamily apartment buildings in order to alleviate the shortage of multifamily dwelling units for low and middle income residents of the city.
(5)
For the purposes of this article and as provided by the Unit Property Act (25 Del. C. § 2201 et seq.), this council finds that a condominium exists and a property obtains that status in law as of the date of the recording with the recorder of deeds in New Castle County of the developer's declaration, as defined in such act.
(6)
The provisions of this article are necessary in order to establish minimum regulations of conversions of apartment buildings to condominiums in the city, and to best ensure and protect the rights and obligations of owners, developers, tenants and other purchasers, as well as the public health, safety and welfare, of the citizenry of the city.
(Code 1968, § 35-59)
The commissioner of licenses and inspections is authorized to conduct all necessary investigations and, if there appears to be any unlawful practice, the commissioner shall undertake one or both of the following:
(1)
Attempt to conciliate the matter and to secure a written conciliation agreement with the developer; or
(2)
Initiate criminal prosecution proceedings.
(Code 1968, § 35-67)
Sec. 9-40. - Violations and penalties.
(a)
Fine. A person who commits an unlawful practice under this article shall, upon conviction, be fined a sum not to exceed $500.00 for each offense. Each day's unlawful practice shall constitute a separate offense.
(b)
Remedial action. Any binding agreement of sale entered into by a developer which results in an unlawful practice under this article is:
(1)
Void, if the tenant was an object of the unlawful practice; or
(2)
Voidable at the option of the purchaser, if the purchaser was the sole object of the unlawful practice.
(Code 1968, § 35-70)
Sec. 9-41. - Applicability; license required.
(a)
The provisions of this article shall apply in their entirety to the conversion of any apartment building in the city to a condominium for which a declaration was first recorded with the recorder on or after February 15, 1980, by which recording such apartment building becomes a condominium.
(b)
Every developer undertaking the conversion of an apartment building to a condominium, the declaration for which is first recorded with the recorder, shall obtain a condominium conversion license from the department of licenses and inspections and shall pay the license fees as provided in section 5-101, except no fee shall be imposed for those units subject to the provisions of section 9-43(d)(8). Such license shall be renewed annually until all condominium units have been sold. The license fees for license renewals shall be based upon the number of condominium units for which there has been no close of sale as of January 1 of the year of the license renewal, excepting those units governed by section 9-43(d)(8).
(c)
Every developer to whom subsection (b) of this section applies shall apply for a condominium conversion license within seven days of the recording of that developer's declaration. The department of license and inspections shall not issue a condominium conversion license unless the developer or owner first has obtained final approval by the city of the developer's or owner's subdivision plat for the conversion. Any action of any kind undertaken by the developer or by any person who has legal or equitable ownership of an occupied apartment building to convert such building to a condominium by way of any form of notice to tenants-in-possession of intent to sell a dwelling unit or units or by way of any offer of sale to the public without first obtaining the license required by this article and section shall constitute an unlawful practice.
(Code 1968, § 35-61; Ord. No. 92-053(sub 1), § 22(c), (d), 7-2-92)
Sec. 9-42. - Notification requirements.
(a)
Notice of recording of declaration. A developer shall send a notice of the recording of a declaration and a copy of such declaration to the building official of the department of licenses and inspections by registered or certified mail, or by hand-delivery, within seven days of the recording of the declaration with the recorder. A developer who recorded a declaration between November 1, 1979 and February 14, 1980, shall comply with this subsection within seven days of the effective date of the ordinance from which this section derives.
(b)
Subdivision approval. In accordance with section 43-1, any developer proposing to convert an apartment building to a condominium shall make application to the planning department for approval of the developer's subdivision plat, the declaration and declaration plan, together with all documents required by the planning department and by the subdivision regulations of the city and obtain final approval of such subdivision plat before the filing for recording of the declaration plan. Between the date of filing such application to the planning department and the date not less than 48 hours before the scheduled review by the planning commission of such subdivision plat, the developer shall, with reasonable notice in advance, afford to not less than a majority of the tenants and/or the tenants' association, if any, the opportunity to review the proposed subdivision plat and conversion plan.
(c)
Effect of vacancy rate. If, as of the time of the filing of an application for approval of a subdivision plat, the planning department determines that the vacancy rate for multifamily dwelling units in the city, as most recently determined, is less than four percent, such vacancy rate to be determined not less than twice a year by the planning department, based on the information to be provided under section 43-1, no final approval of a subdivision plat for such conversion shall be granted until and unless the vacancy rate rises to four percent or more; provided, however, that final approval of such subdivision plat may be granted if at least 67 percent of the tenants of the proposed condominium project approve in writing the developer's plan to convert. In the event that the vacancy rate is less than four percent, a developer seeking to go forward with the conversion shall submit to the tenants of each unit a separate concise document clearly advising the tenants of the 67 percent approval requirement, enumerating therein the rights of tenants under section 9-43(d) if approval is granted, and setting forth the name, apartment address, date of receipt and witnessed signature of approval or disapproval by each tenant and including therein the proposed purchase price of the unit which shall not ultimately be increased for the tenant by more than five percent and the estimated operating budget and condominium fees. Any written consent signed by a tenant pursuant to this subsection shall be valid for not more than 120 days unless it is renewed in writing by the tenant for an additional 120 days and shall terminate upon abandonment of the proposed conversion, or upon final approval or disapproval by the planning department of the subdivision plan, or upon the 120th day, whichever first occurs. No more than one renewal of consent shall be permitted. No proposed conversion or application for subdivision approval shall be submitted to the tenants or to the planning department with respect to any building which has been the subject of a prior proposed conversion or prior application for subdivision approval within one year of a decision of disapproval by the tenants or by the planning commission of the prior proposed conversion or application for subdivision approval. Copies of all such documents shall be filed by the developer with the planning department. A developer aggrieved by a determination under this subsection may appeal such determination within 30 days to the board of licenses and inspection review. The provisions of this subsection shall not be applicable to conversions undertaken by recording of a declaration between November 1, 1979, and February 14, 1980, inclusive.
(d)
License revocation. Any license to convert an apartment building to a condominium issued to a developer shall be revoked by the commissioner of licenses and inspections if any subdivision plat filed with the planning department does not receive the final approval of the planning commission and the planning department. Such license may be reinstated upon subsequent approval of the subdivision plat by the planning department. This subsection shall apply to all conversions undertaken by recording of a declaration on and after November 1, 1979.
(Code 1968, § 35-62; Ord. No. 92-053(sub 1), § 1(k), 7-2-92; Ord. No. 93-023, § 1, 5-13-93)
Sec. 9-43. - Notice of intent to sell; tenants' rights; disclosure.
(a)
Notice of intent to sell. Within seven days of the recording of a declaration with the recorder of deeds, the developer shall send to each tenant residing in a unit and to the building official, by certified mail, return receipt requested, or by actual hand-delivery to each tenant as evidenced by a form for each tenant and signed by each tenant containing the tenant's name, apartment number, and the date of receipt, the following:
(1)
A notice of intent to sell the tenant's unit;
(2)
A report from a professional engineer licensed to do business in the state, stating the engineer's observations regarding the condition of the structure involved and the major mechanical components in the building; and
(3)
A proposed operating budget for the condominium which shall be based upon current operating expenses for the building.
(b)
Form of notice. The form of the notice of intent to sell shall contain the following:
(1)
The name and address of the current owner.
(2)
The name and address of the proposed developer.
(3)
The approximate date on which the proposed subdivision plat is proposed to be filed, or was filed, with the planning department.
(4)
The approximate date on which the final subdivision plat is to be filed with the planning department.
(5)
The approximate date on which the unit is to be vacated by nonpurchasing tenants.
(6)
A statement of the tenant's exclusive right to purchase.
(7)
A statement of the tenant's right of written notification to vacate by a date certain, which date will vary and depend upon the particular tenant's exercise of rights under subsection (d) of this section and the resulting particular applicable time periods as therein provided.
(8)
A statement of the tenant's right of termination of the lease.
(9)
A statement of limitations on interim rent increase.
(10)
A statement of the rights of tenants who are special cases, i.e., aged 62 years and over and/or handicapped persons.
(11)
Such other information as the planning department may deem to be required.
(c)
Other forms of notice. Any notice by way of public advertisement, or any other form of notice not in conformity with this section, or any notice of any kind given to any tenant prior to the date of recording of the developer's declaration shall not be deemed to be sufficient notice under this section.
(d)
Rights of tenants.
(1)
Exclusive right to purchase. A tenant of a unit at the time of the filing and recording of the developer's declaration shall have the exclusive right to purchase his unit for a period of 90 days commencing with the receipt of the notice set forth in subsection (b) of this section, unless the tenant, during such 90-day period, signs a written waiver of such right.
(2)
Right of privacy. Unless a tenant has sooner executed a written waiver of his exclusive right to purchase, the developer shall not show or offer the unit for sale to persons other than the tenant during the first 45 days following receipt by the tenant of such notice of intention to convert. Following such 45-day period, or such waiver, the developer shall show the unit to prospective purchasers only during reasonable hours of the day and only upon not less than 24 hours' notice to the tenant.
(3)
Nontermination of lease. After such 90 days, or after such waiver, the tenant deciding not to purchase shall not have his lease terminated by the building owner or developer for a minimum period of 90 additional days during which time the tenant shall continue to try to find an alternative residence.
(4)
Rent increases. In any instance in which a tenant has decided not to purchase his unit, no increase in rent charged to such tenant, during the periods of time established in this section, regardless of whether the unit continues to be owned by the developer or is purchased by an investor shall result in an amount of rent exceeding that most recently charged a tenant of a comparable unit in the same complex; further provided, however, that in no event shall such increase exceed ten percent of the rent previously charged to such tenant.
(5)
Tenant's right to terminate lease. Any tenant with more than 60 days remaining on a lease who receives a notice of intent to convert shall at any time after receipt of such notice have the right to terminate such lease with 60 days' written notice to the landlord. Such termination shall be without penalty or other termination charge to the tenant.
(6)
Terms of purchase. The exclusive right to purchase granted to tenants under this subsection shall include the right of a tenant to purchase his unit upon at least as favorable terms and conditions as such units are offered to the general public.
(7)
Access. The tenant in a conversion condominium shall not unreasonably withhold consent to the developer to enter the unit in order to inspect the premises, make necessary or agreed repairs, supply necessary or agreed services, or show the unit to prospective or actual workmen or purchasers in accordance with this section. The landlord shall not abuse the right of access or use it to harass the tenant. Except as provided in subsection (d)(2) of this section and except in case of emergency, or unless it is impracticable to do so, the developer or landlord shall give the tenant at least two days' notice of his intent and may enter only at reasonable times between the hours of 8:00 a.m. and 9:00 p.m. of the day.
(8)
Provisions for special tenants. Those tenants of a dwelling unit of which at least one occupant is 62 years of age or older, or who is entitled to receive social security disability benefits, or who is a handicapped person shall not be evicted for a period of not less than 18 months from the date of receipt of the notice of intent to sell; the developer shall provide relocation assistance equal to the amount of two months' rent to any such tenants and to any other tenants who are required to pay a monthly rent equal to 31 percent or more of their gross monthly income, provided that such tenants in fact vacate their units within 12 calendar months after receiving the notice of intent to sell the tenant's unit required by this section. Any elderly or handicapped tenant shall be permitted, without penalty, to terminate any existing lease after having given 30 days' notice. Any tenants who have minor, school-aged children residing with them who attend any school in grades kindergarten through grade 12 shall be permitted to remain in their units until the then-current school year is completed, notwithstanding the fact that any of the otherwise applicable expiration dates in this subsection involved have passed.
(9)
Tenant's agreement of sale. Any tenant who has executed an agreement to purchase his unit before receiving all of the information required by section 9-45, shall have the right to terminate such agreement to purchase without penalty within seven days of receipt of such information.
(10)
No impairment of rights and obligations. This subsection shall not be construed as in any way impairing any rights and obligations, whether expressed or implied, provided for either in the specific terms of the lease or under the provisions of the landlord-tenant code of the state (25 Del. C. § 5101 et seq.) except for the additional requisites set forth in this subsection, in instances in which a condominium conversion is undertaken, which provisions are specifically enacted pursuant to the police powers vested in the city.
(Code 1968, § 35-63; Ord. No. 92-053(sub 1), § 1(k), 7-2-92; Ord. No. 93-023, § 1, 5-13-93)
Sec. 9-44. - Inspections and repair.
(a)
Conversion standards. Any apartment building undergoing conversion to condominium ownership must meet all applicable provisions of this Code with respect to housing (chapter 34), the building code (chapter 4), and the fire prevention code (chapter 12, article II), and the provisions of this article.
(b)
Duties of the developer. The developer shall:
(1)
Arrange for access to all parts of the apartment building and request an inspection by the building official of the city and fire marshal of any apartment building undergoing conversion;
(2)
Correct all violations in a unit as noted in the inspection reports required by subsection (c) of this section at least seven days prior to the close of sale of that unit;
(3)
Correct all violations of the common elements as noted in the inspection reports required by subsection (c) of this section at least seven days prior to the close of sale of the first unit;
(4)
Warrant all repairs and improvements made by the developer to each condominium unit for one year from the close of sale of each unit;
(5)
Warrant all repairs and improvements made by the developer to the common elements for one year from the close of sale of the first unit;
(6)
Obtain a certificate of occupancy issued by the city for each unit at least seven days prior to the close of sale of each unit;
(7)
Obtain a certificate of occupancy issued by the city for all common elements at least seven days prior to the close of sale of the first unit; for purposes of this subsection, a temporary certificate of occupancy may be issued, provided that all required permits have been obtained and the required work proceeds in a timely fashion, such certificates to become final upon satisfactory completion of all work or to be revoked if the work is abandoned; and
(8)
Pay to the city all fees established for all applicable licenses, permits and inspections.
(c)
Duties of city departments. The department of licenses and inspections and the fire department shall:
(1)
Conduct inspections of all apartment buildings undergoing conversions;
(2)
Issue inspection reports listing all violations of applicable Code provisions discovered during the inspections;
(3)
Conduct inspections of all repairs and improvements in accordance with all permits authorized; and
(4)
Issue a final certificate of occupancy for each condominium unit and for the common elements to the developer only upon satisfactory completion of all repairs and improvements.
(d)
Impact, reports. The planning department shall monitor the impact upon the city and its residents of the number of conversions of apartment buildings to condominiums, shall determine and monitor the balance between the number of condominium units being sold and the number of available low and middle income apartment dwelling units in the city, and shall determine at least twice a year the vacancy rate for multifamily dwelling units in the city. The planning department shall make such periodic reports to council as are deemed necessary by the council.
(Code 1968, § 35-65; Ord. No. 92-053(sub 1), § 1(k), 7-2-92; Ord. No. 93-023, § 1, 5-13-93)
Sec. 9-45. - Information for prospective purchasers.
A developer shall provide the following information to prospective purchasers at least seven days before any agreement of sale is signed:
(1)
A copy of the inspection reports required by section 9-44
(2)
A copy of all documents filed pursuant to the Unit Property Act (25 Del. C. § 2201 et seq.).
(3)
An itemization of specific repairs and improvements made to the building and to the unit during the six months preceding the recording of the declaration.
(4)
An itemization of specific repairs and improvements to be completed.
(Code 1968, § 35-66)
Sec. 9-46. - Private right of action.
Any person who has been the object of an unlawful practice or any purchaser in a contract which may be voided under this article may rely on the provisions of this article to institute civil proceedings against the developer to secure compliance with this article.
(Code 1968, § 35-69)
Sec. 9-47. - Filing complaint.
Any person who has been the object of an unlawful practice under this article may file a complaint with the commissioner of licenses and inspections.
(Code 1968, § 35-68)
FOOTNOTE(S):