SANTA MONICA RESIDENTS PROTECTION AND HOMEOWNERSHIP CHAF~TER AMENDMENT

Transcription

1 CHARTER AMENDMENT BY THE PEOPLE OF THE CITY OF SA~~T A MONICA SANTA MONICA RESIDENTS PROTECTION AND HOMEOWNERSHIP CHAF~TER AMENDMENT Section 1. Statement of Purpose. The People of the City of Santa Monica find and declare: (a) This Charter Amendment shall be known as the Santa Monica Residents Protection and Homeownership Charter Amendment, "SMRPH." (b) SMPRH protects existing homes and apartment buildings, many of which have traditional Santa Monica architectural styles, by allowing them to be rebuilt after damage or destruction from fire, earthquake, or other natural causes, in the same style, density, and size. This ability to rebuild to the pre-existing size protects the number of residential units in the City. It also provides for the preservation of Santa Monica's character by allowing the rebuilding of properties to original styles of architecture. (c) Santa Monica is located in a small, finite area of approximately eight square miles. The City is fully built-out and has been so for decades. It has one of the highest percentages of land zoned for multi-family residential use among Westside/South Bay jurisdictions, with a population density of approximately 11,200 persons per square mile, one of the highest densities among coastal communities in Los Angeles County. (d) Santa Monica's vacant land parcels are finite and scarce. As of November 1995, there were only 62 vacant residential parcels out of approximately 6,132 multi-family zoned parcels in the entire City. Since then, even this limited number of vacant parcels has shrunk. This means that planning flexibility is limited. Virtually any new residential construction replaces an existing structure or improvement, often resulting in the loss of occupied apartment units. The vast majority of City residents live in multi-family dwellings. Most live in the City's approximately 37,000 apartment units. (e) Many of the City's older structures, which have been a hallmark of the City's aesthetic make up for decades, such as courtyard-style apartment complexes, are being torn down and replaced with large, luxury residential structures. (f) From 1994 to 1999, there has been a significant increase in multi-unit construction which is changing the traditional Santa Monica styles of architecture. The vast majority of the new units are affordable only to upper income individuals. (g) The building and rebuilding in the residential neighborhoods results in traffic problems and interferes with pedestrian enjoyment of City streets. (h) Santa Monica has inadequate opportunities for citizens to own their own homes. In the United States, approximately two-thirds of Americans own their own homes. According to the 1990 Census, less than one-third (28%) of Santa Monicans own their homes. More than two-thirds (72%) of the City's households rent. Most of new housing construction is affordable only to upper income individuals. (i) There is an inadequate supply of housing affordable to middle income families and individual home buyers. As a result, many middle income families and individuals who desire the stability and financial security of home ownership are forced to relocate out of the City. (j) According to the Santa Monica Housing Element Update Technical Appendix, the state's Costa-Hawkins law will produce increased household turnover in Santa Monica market rate rental units. The study states that because the Costa-Hawkins Act's vacancy decontrol provision are similar to the vacancy decontrol provisions that have always been part of the City of Los Angeles Rent Stabilization Ordinance, it is likely that longterm unit turnover rates in Santa Monica will climb to resemble the higher turnover rates found in West Los Angeles. (k) In general, those who own condominiums occupy their homes longer than those who rent market rate apartments. By increasing the percentage of homeowners, the City will decrease household turnover and produce more community stability. (I) Given the tax advantages of home ownership, the monthly cost of home ownership is comparable to the cost of market rate rental

2 apartments similar in size and amenities, based upon net after tax cost of housing. After five or ten years, the net after tax cost of ownership decreases as market rents increase. In addition, home ownership benefits citizens with equity build-up on their homes whereas renting does not provide equity build-up. (m) Converted apartments are generally smaller with fewer amenities than the new, large luxury condominiums being constructed. As such, these more utilitarian converted units will be usually be more affordable to middle income citizens than the newly constructed luxury condominiums. (n) It is ecologically beneficial and environmentally responsible to preserve and maintain existing functional housing rather than to demolish such housing and replace it with fewer, larger, luxury units. (0) Tenants in apartment buildings are currently unable to lawfully purchase the units they live in through any type of tenant cooperative or condominium project. (p) SMRPH provides tenants the opportunity to purchase their units at lower prices than new construction luxury condominium units. SMRPH does this without evicting existing tenants, demolishing existing buildings, losing community stability caused by the sudden eviction of many tenants under the Ellis Act, or inconveniencing neighborhoods through Ellis Act tenant evictions, demolitions, and new construction. (q) SMRPH is designed to provide tenants the opportunity to enjoy the security and financial benefits of home ownership and, at the same time, to protect the residency of those tenants who do not purchase their units. (r) SMRPH is an effective way to preserve and stabilize our finite existing housing stock and existing neighborhoods by allowing the conversion of apartment units to home ownership units. (s) SMRPH is an effective way to prevent the eviction of existing tenants and the demolition of existing rental housing units. (t) SMRPH is an effective method to empower tenants to increase their control over their buildings through home ownership. (u) SMRPH is an effective method to preserve and stabilize the existing character of Santa Monica's multi-family residential neighborhoods. (v) SMRPH conversion buildings protect SMRPH Tenants who choose not to purchase their units with an Irrevocable 99 Year Lease recorded in the chain of the title to the property. (w) SMRPH balances the City's housing policy, by allowing tenants who wish to purchase their homes the opportunity to do so while, at the same time, giving tenants who do not purchase, increased protections over and above that afforded by the Santa Monica Rent Control Law. (x) SMRPH provides incentives to encourage tenants to form Tenant Purchasing Groups in order to purchase and convert their buildings to homeownership units. (y) SMRPH protects Homeownership and preserves the character of existing housing by allowing reconstruction of existing single-family ownership housing in the event of a fire, earthquake, or Act of Nature. (z) Families living in single-family homes, condominiums and cooperatives, as well as owners and tenants of apartment buildings, are often faced with financial hardship when their homes or buildings are destroyed by fire, earthquakes, or Acts of Nature due to the density, set back, and other restrictions which prohibit the rebuilding of the same number and size of units and the high cost required to comply planning and zoning and the other regulations enacted after the family's home or building was constructed. SMRPH allows single-family homes, condominiums, and other multi-family ownership housing and apartment buildings to be reconstructed as the structure(s) existed before the destruction. (aa) SMRPH also protects home ownership by preventing involuntary resale controls which may make it difficult or impossible to obtain mortgages and may discourage individuals from owning their homes. (bb) This Charter is necessary for the public health, safety, and welfare of the City of Santa Monica. SECTION 2. Definitions. For purposes of this Charter, the following words and phrases shall have the following meaning: (a) Applicant The Owner, and/or a Tenant Purchasing Group, of a Qualifying Property, who files a SMRPH Application (b) Application. An application for a SMRPH conversion filed pursuant to this Charter. (c) Cosigning Tenant Any natural person consenting to a SMRPH conversion by his or her signature on a SMRPH Application who has been a tenant at a Qualifying Property living in one or more

3 (d) (e) (f) (9) (h) (i) (j) (k) units for a combined period of at least three (3) consecutive months immediately prior to the date he or she signs a SMRPH Application. An Owner of a Qualifying Property may be part of a Tenant Purchasing Group and/or, if the Owner is an individual, a Cosigning Tenant. Disabled Person. Any person who is receiving benefits from a Federal, State, or local government, or from any entity on account of a permanent disability that prevents the person from engaging in regular, full-time employment Ellis Act. Government Code Section 7060, et seq. Owner. A person or entity holding title to a Qualifying Property. Owner includes a Tenant Purchasing Group if it has acquired title to a property. Price Index. The Consumer Price Index for All Urban Consumers (CPI-U) in Los Angeles Anaheim- Riverside, California, as published by the United States Bureau of Labor Statistics or, in the event such index is discontinued, any comparable index approved by the City Council. Qualifying Property. Any property used for residential rental purposes in the City, except for single-family residential property zoned R-1, as of August 1,1999, for which no eviction has occurred pursuant to Government Code Sections 7060 et seq. (the Ellis Act) within a five (5) year period prior to the filing of a SMRPH Application, and for which no eviction has occurred pursuant to Section 1806(h) of Santa Monica City Charter (relating to eviction for purposes of owner occupancy by a relative of the Owner) within a two (2) year period prior to the filing of a SMRPH Application. A mobile home park is eligible to be a Qualifying Property. Senior Citizen. Any person sixty-two (62) years of age or older. SMRPH. "Santa Monica Residents Protection and Homeownership" Charter Amendment. SMRPH Conversion. Any conversion from residential rental property to any form of common interest ownership development recognized under California law, as implemented pursuant to this Charter Amendment. (I) (m) (n) (0) (p) (q) SMRPH Tenant Any tenant, including both Cosigning and non-cosigning Tenants, legally residing at a Qualifying Property on the date a SMRPH Application for said property is accepted for filing pursuant to Section 4(a). Tenant "Tenant" as defined in Section 1801 (I) of Article 18 of the Santa Monica City Charter, shall mean any tenant, subtenant, lessee, sub-lessee or any other person entitled to the use or occupancy of any rental unit at the time a SMRPH application is filed. Tenant Ownership. Ownership by Tenants or former Tenants of units in the form of either condominiums, community apartments, stock cooperatives, cooperative associations, limited equity stock cooperatives or any other means authorized under State Law. Tenant Purchasing Group. A California General Partnership, a California Limited Partnership, a California Limited Liability Partnership ("LLP"), a California Limited Liability Company ("LLC"), a California Corporation, or any other entity capable of holding title to a Qualifying Property, in which at least 51 % of the voting power of the entity is held by Tenants residing in the Qualifying Property. Tenant Purchasing Group Purchase Agreement A written agreement for the purchase of a Qualifying Property, between the Owner and a Tenant purchasing Group. The terms of the Tenant Purchasing Group Purchase Agreement shall: (1) contain the agreed upon terms of the purchase; (2) give the Tenant purchasing Group the right to file and process a SMRPH Application and any related tentative tract map or parcel map application; and (3) be contingent upon approval of the SMRPH Application and any related map application by the Planning Commission, or City Council on appeal. A SMRPH Application and any related map application shall be solely owned by the Tenant Purchasing Group. Tenant Sale Prices. The maximum sale price to each unit for each SMRPH Tenant as set forth in a SMRPH Application. 3

4 SECTION 3. Application for SMRPH. An application for a SMRPH Conversion shall be deemed complete by the City if it meets the following requirements: (a) Identifies the Qualifying Property which is the subject of the Application, its Owner and, if applicable, the Tenant Purchasing Group, and contains a declaration signed by the Applicant that such property is a Qualifying Property. A Tenant Purchasing Group shall have the right to file and process a SMRPH Application in its own name, prior to taking title to the property, under a Tenant Purchasing Group Purchase Agreement. (b) Identifies whether the Applicant is the existing Owner, a Tenant purchasing Group operating under a Purchase Agreement, or a Tenant Purchasing Group which obtained ownership prior to filing of the Application. (c) If the Application is being processed as a Tenant Purchasing Group Application, the Application shall include a declaration under penalty of perjury executed by the authorized representative(s) of the Group, stating the names and interests of the purchasing parties and stating that the Qualifying Property is currently in escrow subject to a condition that the SMRPH Application is approved by the Planning Commission, or the City Council on appeal. This provision shall not be required if title to the Qualifying Property is vested in the Tenant Purchasing Group at the time of Application. (d) Sets forth the following sales information: (1) The maximum sales price for each unit to each SMRPH Tenant (the "Tenant Sale Prices"). (2) If seller financing will be offered, the minimum down payment for each unit, the minimum amount to be financed, the maximum rate of interest and the minimum term of the loan to be offered by the seller. (e) Sets forth the following common area, maintenance and budget information: (1) A Parking Plan for the assignment and use of all parking spaces. A Parking Plan shall specify the minimum number of parking spaces to be provided on sale with each unit. Specific parking space assignments are not required in the SMRPH Application. (2) A plan for the use of all common area facilities. (3) Occupancy and management plans and policies. (4) A list of repairs and alterations, if any, which will be performed in each unit and in common areas before the close of the first escrow for an individual unit sale. (5) A plan for allocating costs and expenses for the Qualifying Property following completion of the conversion. (6) A prepared monthly operating budget for the Qualifying property in the form and substance of a budget prepared for the California Department of Real Estate ("DRE") pursuant to the Public Report ("White Slip") requirements for subdivided residential properties. The budget shall estimate the monthly maintenance assessment for each unit as required by the Department of Real Estate. The budget submitted to the Department of Real Estate later in the subdivision process, if required, shall be reasonably consistent with the initial budget filed with the SMRPH Application. (7) The procedures for the allocation and use of common area reserve funds. (f) Contains a declaration with the following information: (1) That there has been a building inspection report covering the accessible portions of the entire Qualifying Property, including but not limited to, the roof, walls, floors, heating, air conditioning, plumbing, electrical systems and recreational facilities, prepared by a building inspection service, a licensed contractor, or comparable agency within the preceeding six (6) months. The inspection shall include an inspection for lead paint and for asbestos. 4

5 (2) That, for each tenant occupied unit, a copy of the complete building inspection report has been delivered to the unit or a Tenant occupying the unit. (3) That, for each Tenant occupied unit, a written statement setting forth any substantial defects or malfunctions identified in the building inspection report regarding the unit and the common areas has been delivered to the unit or a Tenant occupying the unit. (g) Sets forth the form or type of property ownership (condominiums, cooperative, etc.) for which the Application is submitted. (h) Identifies the Cosigning Tenants and the units occupied by such Tenants and lists all other Tenants known to the Applicant in the Qualifying Property and the units they occupy. (i) Contains a notice that substantially states the following: "This is an Application for a Santa Monica Renters Protection and Homeownership ("SMRPH") Conversion. Before you sign any documents, you should understand the SMRPH program. A copy of the law and information about the SMRPH program is available without cost from the City of Santa Monica. this information may be obtained by contacting City hall." The City may provide for inclusion on the notice a phone number and address of city staff where more information may be obtained. The notice shall be printed on a separate sheet in at least 18 point type. 0) That the Application: (1) If filed by an Owner, is signed by Cosigning Tenants occupying not less than two-thirds (2/3) of all the residential units in the Qualifying Property on the date the Application is submitted for filing. If there is more than one Tenant in a unit, the signature of only one Tenant shall be required for that unit or mobile home. In the case of a mobile home park, that the Application is signed by Cosigning Tenants occupying not less than two-thirds (2/3) of all occupied spaces (pads) in the mobile home park, and that the total number of occupied pads constitutes no less than two-thirds of the park's total pads. (2) If filed by a Tenant Purchasing group, is signed by Cosigning Tenants occupying not less than one-half (1/2) of all the occupied residential units in the Qualifying Property on the date the Application is submitted for filing. If there is more than one Tenant in a unit, the signature of only one Tenant shall be required for that unit or mobile home. In the case of a mobile hone park, that the Application signed by Cosigning Tenants occupying not less than one-half (1/2) of all the occupied spaces (pads) in the park, and that the total number of occupied pads constitutes no less than one-half fo the park's total pads. (k) Contains a declaration that the signature of each Cosigning Tenant was obtained only after the delivery, in writing, to such Tenant of the information required in Subsections (a) -(i) inclusive of this Section. (I) Contains a declaration that all lawful notices of the Application required to date have been given. (m) Contains a declaration that in obtaining the signatures of Cosigning Tenants, the Applicant neither offered nor agreed to pay money or other consideration to any SMRPH Tenants in exchange for a release of rights that the Tenant has to purchase his/her unit in the Qualifying Property. This section is intended to be an "anti-speculation" provision to prevent Tenants and the Owner from agreeing to a "guaranteed option" payment in return for Tenants voting for the project. (n) Contains a declaration that in obtaining the signatures of Cosigning Tenants, neither the Applicant nor the Applicant's agent or represntative coerced a Tenant to sign by threatening that the Owner, or any successor thereof, would cease operating the property as residential rental property pursuant to Government Code Sections 7060 et seq. ("the Ellis Act") if the proposed conversion of the Qualifying Property pursuant to this Charter Amendment did not occur. Notwithstanding this provision, if an owner has in fact been solicited by a 5

6 prospective buyer who indicated that he/she was considering using the Ellis Act to evict the Tenants, the owner may disclose that fact to the Tenants. (0) Contains a copy of a written Irrevocable Lease Addendum executed by.the Owner and the Tenant Purchasing Group, if there is one, in a form suitable for recordation in the Los Angeles County Recorder's Office. This Irrevocable Lease Addendum shall be an addition to the lease terms of each SMRPH Tenant. The Addendum shall be in substantially the following format, and shall include only such additional provisions as maybe required to record the document on title: IRREVOCABLE 99 YEAR LEASE This IRREVOCABLE 99 YEAR LEASE affects improved real property located in the City of Santa Monica, with a street address of ("Property"). owned by ("Owner".) To the extent that any prior written or oral agreement is inconsistent with this Irrevocable 99 Year Lease, then this Irrevocable 99 Year Lease supersedes and replaces those specific provisions which are inconsistent with this Irrevocable 99 Year Lease. The legal description of this property is The following persons are "SMRPH Tenants," as defined in Section 2 of the Santa Monica City Charter Amendment, the Santa Monica Residents Protection and Homeownership Charter Amendment,("SMRPH"), and shall have the rights and privileges set forth for such persons in SMRPH, including, but not limited to, those rights and privileges specified in this Irrevocable Lease Addendum: [The names shall be listed as set forth in the following format.] "Common Unit "Tenant names" "Senior" Disabled" Designation" 1503 xxxx St. #A xxxx Yes/No Yes/No 1503 xxxx St. #B xxxx Yes/No Yes/No A B c. For valuable consideration, receipt of which is acknowledged by the Owner, in the form of SMRPH Tenant signatures on the SMRPH Application in sufficient quantity to qualify the Property for a SMRPH Conversion, the Owner hereby IRREVOCABLY grants, conveys, and transfers to all SMRPH Tenants listed above, this Irrevocable Lease Addendum. This grant, conveyance, and transfer is made by Owner, on behalf of Owner, and Owner's successors-in- interest, including, but not limited to, any Tenant Purchasing group which acquiries title from the Owner. This Irrevocable Lease Addendum contains the rental protections and benefits which the Owner has agreed to grant all SMRPH Tenants as consideration for the approval of the SMRPH Application. Owner agrees that all SMRPH Tenants will be given the protections in the Irrevocable Lease Addendum whether or not they have signed the SMRPH application. This Irrevocable Lease Addendum shall be recorded on the title to each and every unit occupied by a SMRPH Tenant, and shall run with the land for as long as the SMRPH tenant occupies his/her unit, or if the SMRPH tenant elects to cancel. No SMRPH Tenant shall be charged more than the Maximum Allowable rent plus authorized surcharges as determined by the Santa Monica Rent Control Board for the SMRPH Tenant's unit, from year to year, No SMRPH Tenant shall be given a rent increase under "Costa-Hawkins," Civil Code Section et seq., or any other law which seeks to decontrol the rent level of any residential unit. The Owner voluntarily contractually waives the right to raise rent under "Costa- Hawkins" and any other existing law or future law, despite the fact that the unit is "separately alienable" through the SMRPH conversion process or otherwise. No SMRPH Tenant shall be evicted under the "Ellis Act," Government Code Sections 7060 et seq. (the Ellis Act). 6

7 D. E. F G. H No SMRPH Tenant shall be evicted for "owner-occupancy" pursuant to Section 1806(h) of the Santa Monica City Charter (relating to eviction for purposes of owner occupancy or occupancy by a relative of the Owner). Should the Rent control Board cease to set the Maxim um Allowable Rent provisions, then the maximum rent for each unit occupied by a SMRPH Tenant shall be the last established Rent Board controlled rent, adjusted anually on September 1st to allow an increase of no more than the increase in the Price Index. The cost of making improvements set forth in the SMRPH application shall NOT be passed on to the SMRPH Tenants by any means, including but not limited to, an application to the Rent Control Board for a rent increase. Each SMRPH Tenant shall have the non-assignable right to continue to personally reside in the his or her unit as long as the SMRPH Tenant chooses to do so, subject only to just cause eviction as defined in Article 18 of the Santa Monica City Charter provided that the eviction is not for Owner or relative occupancy under Article XVIII (Rent Control Charter Amendment), Section 1806h, of this Charter, or the removal or demolition of the unit. Each SMRPH Tenant shall have the right, without liability of any kind, to immediately terminate this Irrevocable Lease Addendum upon written notice to the Owner, whether or not the SMRPH Tenant vacates his or her unit. Each Senior Citizen SMRPH Tenant may designate in writing the name of one person who is entitled to continue living in the rental unit under the same terms as the Senior Citizen SMRPH Tenant if the Senior Citizen predeceases him or her and if the person designated is residing in the unit at the time of the death of the Senior Citizen. The person designated by the Senior Citizen SMRPH Tenant must be an occupant of the unit, at least fifty-five J (55) years of age on the date of the filing of the SMRPH Application, and must have resided in the unit for a continuous period of three months prior to the filing of the SMRPH Application. The name of the person so designated shall be listed above as a SMRPH Tenant. If such person is also a Senior Citizen or disabled, it shall be indicated above in the list of SMRPH Tenants. The Owner hereby relinquishes any claim Owner may have against any tenant listed in the SMRPH application based upon an unauthorized sublet or assignment which may have existed up to the date the SMRPH application is filed with the City. The tenants listed in the SMRPH application each agree that he/she/they shall not assign or sublet his/her/their interest(s) in the unit and that any other assignment or sublet will terminate this Irrevocable 99 Year Lease. The rights and privileges of SMRPH Tenants, SMRPH Senior Citizens and SMRPH Disabled Persons listed in this Charter Amendment may only be terminated consistent with SMRPH provisions. Such rights shall be deemed terminated and removed from record title when a declaration in the form set forth below is executed under penalty of perjury by the record Owner of the property and is recorded in the Los Angeles County Recorder's Office which states: (a) it pertains to this Irrevocable Lease Addendum; (b) the name(s) of the SMRPH Tenants being removed from record title; (c) the unit number(s) being occupied by the SMRPH Tenants; (d) the date the SMRPH Tenants' interest was (were) terminated; (e) the reason the interest was (were) terminated, and; (f) a declaration that the Owner has been advised that the unlawful removal of a SMRPH Tenant's interest may result in criminal penalties under this Charter Amendment as well as other criminal penalties and civil liability, including attorney's fees and costs. An acceptable form for the declaration of removal of a SMRPH Tenant's interests is set forth below:

8 'When Recorded Return to: map or parcel map. Recordation of such Condominium Plan is a condition precedent to Declaration of Removal of SMRPH the applicability and effectiveness of the 99 Year Tenant's Interests Lease. This Irrevocable Lease Addendum shall from be deemed to be an Addendum to each and Irrevocable 99 Year Lease every SMRPH Tenant's lease, whether the SMRPH Tenant's lease is oral or in writing, The undersigned is the record Owner of whether the SMRPH Tenant's lease is for a a unit in that condominium project in the specified term of a month-to-month lease; and City of Santa Monica, County of Los Angeles, State of California, with a street whether or not the SMRPH Tenant consented to the conversion. address and unit number of more particularly described as follows: (legal description) Owner wishes to remove a Tenant interest as set forth in the Irrevocable Lease Addendum recorded in the Los Angeles County Recorders Office on as Instrument No.- The following Tenant Interest is hereby removed from said Irrevocable Lease Addendum: "Tenant Name" (e.g., Mildred Smith) "Date of Termination" Termination" (e.g. July 7,2001) "Reason "Unit No." (e.g. 104) for (e.g. death, moved to Arizona,etc.) The undersigned acknowledges being advised that unlawful removal of a SMRPH Tenant's interest from the Irrevocable Lease Addendum may result in criminal penalties under this Charter Amendment as well as other criminal penalties and civil liability. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Date Owner (INSTRUMENT MUST BE ACKNOWLEDGED BEFORE A NOTARY PUBLIC)' K. The 99 Year Lease shall automatically be in full force and effect upon the recordation with the County of Los Angeles of the project's Condominium Plan for the final subdivision tract L. ~A. All the SMRPH Tenants have relied upon the representation made to them that this Irrevocable Lease Addendum shall be a valid binding agreement insuring the benefits set forth in this Irrevocable Lease Addendum. The Owner for himself/herself and for all subsequent owners, represents and contracts with the SMRPH Tenants that but for the Owner's representations of the binding force of this 99 Year Lease, The SMRPH Application would not have received the necessary SMRPH Tenant signatures. the Owner represents and agrees for himself and for all subsequent owners that some SMRPH Tenants may not have signed the SMRPH Application if they thought that the nonsigning SMRPH Tenants would not be protected to the same extent as the SMRPH Tenants who did sign the SMRPH Application. This Irrevocable 99 Year Lease shall become an addendum to any existing written or oral lease, and shall be read in conjunction with any existing lease or rental agreement. In the event of any conflict between the terms of this Irrevocable 99 Year Lease wherein the exisitng lease or rental agreement provide lesser protections to the tenants, the terms of this Irrevocable 99 Year Lease shall prevail." ***End of Irrevocable 99 Year Lease*** SECTION 4. Processing of SMRPH Application. The following procedures shall be followed in the processing of a SMRPH Application: (a). A SMRPH Application shall be accepted for filing by the City when it meets the requirements of Section 3 of this Charter Amendment. Within 30 days of the filing of a SMRPH Application, the City shall either accept the Application for filing or advise the Applicant in writing of all reasons that is not accepted for filing. The Applicant shall then have the 8

9 opportunity to respond and/or supplement or amend the Application. (b). A SMRPH Application shall be filed by the Owner or Tenant Purchasing Group prior to or sim ultaneously with the filing of any application for a tentative subdivision map or tentative parcel map under the Subdivision Map Act of the State of California. (c). Within five (5) business days of the date a SMRPH Application is accepted for filing, the City shall send notice to every unit in the Qualifying Property stating that a SMRPH Application has been filed and that comments or objections thereto may be filed with the City. (d). Upon the filing of the SMRPH Application and of any required tentative subdivision map or tentative parcel map or, if no such map is required, at the end of forty (40) days from the filing of the SMRPH Application, the SMRPH Application and any required tentative map shall be scheduled for hearing and processed in accordance with the procedures for the processing of subdivision maps. The city and the Applicant may agree to extend the time periods required for processing for a period not to exceed sixty (60) days. (e). Any SMRPH Application shall be deemed approved subject to the conditions set forth in this Charter Amendment if it is not approved or denied within the time periods required by this Section. SECTION 5. Approval or Denial of SMRPH Application. A SMRPH Application shall be approved or denied within the time periods set forth in Section 4 of this Charter Amendment and in accordance with the following standards: (a) A SMRPH Application, along with any required tentative subdivision map or tentative parcel map, shall be denied if the SMRPH Application fails to meet any of the requirements of this Charter Amendment, was the result of fraud, misrepresentation, threat or similar coercion, or fails to meet any mandatory requirement of the Subdivision Map Act of the State of California. (b) A SMRPH Applications, along with any required tentative subdivision parcel map. shall be approved if it meets the requirements of this Charter Amendment and shall be subject to the following conditions and no others: (1) After approval by the Planning Commission, or City Council on appeal, the Owner shall file with the City a written consent to each condition imposed in connection with the approval of the SMRPH Application. The written consent shall be filed and prior to the approval of any required final subdivision map or final parcel map, or if no such map is required, within six (6) months from the date of approval of the SMRPH Application. Such written consent shall constitute an agreement with the City of Santa Monica and each SMRPH Tenant binding upon the Owner and any successors in interest, to comply with each and every condition imposed in connection with approval of a SMRPH Application. The City and any SMRPH Tenant shall have the right to specific enforcement of this written agreement with the City in addition to any other remedies provided by law. (2) Recordation of the Irrevocable 99 Year Lease. (3) The Owner shall offer and continue to offer the exclusive right to purchase each rental unit in the Qualifying Property to the SMRPH Tenants thereof upon the terms set forth in the Application, without change, for a period of not less than one (1) year from the date of Final Subdivision Report, "White Slip," approval by the California Department of Real Estate or the date the first unit in the Qualifying Property is offered for sale, if no approval by the California Department of Real Estate is required. Upon the written acceptance of the offer by the SMRPH Tenant at anytime within the one year period, escrow shall open within thirty (30) days from the written acceptance by the SMRPH Tenant. Unless otherwise agreed by the parties, the period of the escrow shall not exceed sixty (60) days. It is the intent of this section that the one year option is IN ADDITION TO the year or more typically required to complete a SMRPH Application and receive the final Department of Real Estate's "White Slip" approval needed to sell the units. The one-year option begins AFTER the White Slip. (4) No SMRPH Tenant shall at any time be evicted for the purpose of occupancy by the Owner, occupancy by any relative of the Owner, or for removal or demolition of the unit. In the event the Owner transfers title to a unit occupied by a SMRPH Tenant, the transfer shall be expressly made subject to all rights and benefits of the SMRPH Tenant, including but not limited to, the right continue to occupy the unit and the right to purchase the unit as provided for in SMRPH. (5) Each SMRPH Tenant shall have the full protections of Article XVIII of this Charter, the Santa Monica Rent Control Charter Amendment, Q

10 before, during and after any SMRPH Conversion. (6) The Qualifying Property may be required to comply only with the applicable laws, including the building, safety, and zoning codes, which were in effect as of the date the Qualifying Property was approved by the City for construction. No new or additional requirements including, but not limited to, parking, room size, or interior or exterior improvements of any kind, may be imposed as a condition, either directly or indirectly, on the SMRPH Conversion. Notwithstanding the above, the City may impose reasonable health or safety requirement consistent with this Charter Amendment upon such Qualifying Property provided that such requirements uniformly apply to all similar multiunit residential structures in the City of Santa Monica, regardless of the form of ownership of the property. (7) Notwithstanding the paragraph immediately above, a bootleg unit (a unit which was created after the original building permit was issued and was created without proper planning approvals and/or building permits but which is registered as a rental unit with the Santa Monica Rent Control Board) shall be handled in one of two ways --(a) A bootleg unit may become a separable, converted unit, subject to inspection, modification if required by the City, and approval by the City for building and safety compliance for a habitable unit; or (b) A bootleg unit may be combined with any other unit with which it is contiguous, subject to inspection, modification if required by the City, and approval of the combined unit by the City for building and safety compliance for habitable unit. The Applicant may designate which of the above alternatives is to be utilized. In all cases, no SMRPH Tenant in a bootleg unit may be evicted upon any grounds except for a just cause eviction as defined in Article 18 of the Santa Monica City Charter, provided that the eviction is not for the purpose of Owner or Owner's relative occupancy, or for the demolition or removal of the unit. No additional parking may be required by the City pursuant to application of this paragraph. (8) Prior to the approval of any required final subdivision map or final parcel map for a SMRPH Application, or if no such map is required, prior to the filing of the written consent required by Subdivision (b)(1) of this Section, each SMRPH Tenant shall be informed in writing, on a form approved by the City, of his or her rights under this Charter Amendment. (9) No Owner shall close the first escrow for sale of a unit without completing the repairs and alterations agreed to pursuant to Section 3(e)(4) of this Charter Amendment. The time to complete the repairs and alterations may be extended for a period not to exceed ninety (90) days if the Tenant purchasing the first unit agrees to the extension and the Owner provides a bond approved by the California Department of Real Estate in an amount sufficient to cover the cost of the work yet to be com pleted. The Building Officer of the City of Santa Monica may authorize a further extension of time to complete the repairs and alterations upon finding that the Owner has diligently sought to make the repairs during the initial extension period and that additional time is reasonably required to complete the work. (10) Prior to the filing and approval of a SMRPH Application by the Planning Commission, or City Council on appeal, no SMRPH Tenant shall offer or agree to release all rights that he or she has to purchase a rental unit in the Qualifying Property in return for receiving money or other financial consideration from the Owner. (11) The requirements of this Section shall be set forth in the Declaration of Covenants, Conditions, and Restrictions, or equivalent document, and shall specifically name the SMRPH Tenants in each unit entitled to the benefits and protections of this Charter Amendment and shall specifically reference the Irrevocable 99 Year Lease and Consent to Conditions. The City shall review and approve for compliance with this Charter Amendment the Covenants, Conditions, Restrictions, or equivalent documents, prior to the approval of any required final subdivision map or final parcel map, or if no such map or final parcel map, or if no such map is required, prior to the filing of the written consent required by Subdivision(b)(1) of this Section. (12) The Declaration of Covenants, Conditions, and Restrictions, or equivalent document, contain a non-discrimination clause in substantially the following form: "No unit owner shall execute or file for record any instrument which imposes a restriction upon the sale, leasing or occupancy of his or her unit on the basis of sex, race, color, religion, ancestry, national origin, age, pregnancy, marital status, family composition, disability, Acquired Immune Deficiency Syndrome (A.I.D.S.), sexual orientation, or the potential or actual occupancy of minor children. 10

11 SECTION 6. Prohibition Against Resale Controls. The City shall not impose either directly or indirectly any restrictions on the price, terms or conditions of sale of any single-family home, SMRPH, or non-smrph condominium unit, or cooperative. Nothing in this Section shall restrict the City, any other governmental agency, or any other person or entity from making any voluntary loans or providing, guaranteeing, or assisting other forms of voluntary financial assistance to purchasers of SMRPH units with any terms agreeable to all principal parties. SECTION 7. Prohibition Against Other Tax and Fee Requirements. No tax or fee other than those expressly set forth in this Charter Amendment may be imposed, either directly or indirectly, by the City on a SMRPH Conversion except the imposition of actual processing, engineering, and map costs not to exceed five hundred dollars ($500.00) per unit for the first five units plus fifty dollars ($50.00) for the sixth and each additional unit. These fees may be adjusted annually, on or after the anniversary date of this Charter Amendment, by the Price Index. For Applications filed by Tenant Purchasing Groups, the above costs shall not exceed two hundred fifty dollars ($250.00) per unit for the first five units plus twenty-five dollars ($25.00) for the sixth unit and each additional unit. These fees may be adjusted annually by the Price Index. SECTION 8. Applicability of Other Laws. No Applicant of a Qualifying Property shall be required to obtain permission under 1803(t) of the Santa Monica City Charter, nor shall 1803(t) be applicable in any way to the processing of a SMRPH Conversion Application. Any other previously enacted provisions of the City Charter, or any provisions of any ordinance of the City, or any provisions of the Municipal Code, or any appendix thereto inconsistent with the provisions of this Charter Amendment, to the extent of such inconsistency and no further, shall not apply to the extent necessary to effect the provisions of this Charter Amendment. Any general or specific plan of the City inconsistent with this Charter Amendment shall be amended to the extent necessary to be consistent with this Charter Amendment, and until such amendment, shall be deemed consistent with this Charter Amendment. SECTION 9. Ownership Ratio. If the City Council finds, based upon competent factual data obtained from municipal, State, Federal or other independent sources of data that the ratio of non-owner occupied residential units to owner occupied residential units within the City of Santa Monica has fallen below the average of such ratio for the State of California, the City Council may, at its discretion, place a referendum on the ballot to determine if the voters of the City of Santa Monica wish to continue the SMRPH. SECTION 10. Information and Compliance. The City Council shall cause to be prepared and supervise a program to disseminate information about this Charter Amendment to Tenants, apartment owners and other parties informing each Tenant, apartment owner and other parties of their rights and obligations under this Charter Amendment. The City Council shall issue an annual report to include data on compliance with this Charter Amendment. Each report shall include data on the number of Applications and the status of each project. SECTION 11. Criminal Penalties. Any material violation of this Charter Amendment shall constitute a misdemeanor. SECTION 12. Civil Remedies. The City Attorney shall supervise and promote educational and legal information concerning civil remedies and civil causes of action which may be available to persons who feel that their rights have been violated. The City Attorney shall refer persons seeking a civil remedy to any referral agency or referral panel operating in accordance with the requirements of the Los Angeles County Bar, the State Bar of California or similar authority. Any aggrieved party may bring an action in a court of competent jurisdiction in order to obtain relief for any violation of this Charter Amendment. SECTION 13. Partial Invalidity. (a). Except as provided in Subdivision (b) of this Section, if any provision of this Charter Amendment or application thereto to any person or circumstance is declared or found invalid by a court of competent jurisdiction, this invalidity shall not affect other provisions or applications of this Charter Amendment which can be given effect without the invalid provision or application, and to this end the provisions of this Charter Amendment are declared to be severable. This

12 Charter Amendment shall be liberally construed to achieve the purposes of this Charter Amendment and to preserve its validity. (b). In the event that this Charter Amendment is declared invalid in its entirety, any Applicant who has filed a SMRPH Application meeting the requirements of this Charter Amendment at the time of the filing of the Application shall have a right to proceed with the conversion in accordance with the terms of this Charter Amendment as though each and every provision hereof was severable. SECTION 14. Right to Rebuild Single Family & Multiple Residential Buildings. (a). If a structure or structures containing any existing single family residence, residential condominiums or cooperatives, apartments or other multi-family residences is (are) substantially or totally destroyed by fire, or by earthquake or other Acts of Nature, the owner(s) shall have the right to rebuild the structure(s) in the same architectural style within the previous building envelope and with up to the same number of units as had legally existed immediately prior to destruction, regardless of any limitations set by any City laws regulating development, including without limitation, planning and zoning regulations, which exist at, or subsequent to, the time of said destruction, except for applicable building and safety codes in effect as of the date the building is to be rebuilt. The City shall take no action to interfere with this right to rebuild. (b). If an Owner wishes to substantially modify the architectural style of the structure(s) from that which existed prior to the destruction, but in other respects utilize the benefits of paragraph (a) above, said modified style shall be allowed subject to approval by the City's Architectural Review Board pursuant to Chapter "Architectural Review" of the Santa Monica Municipal Code. (c). If this Section 14 is held to be invalid, it shall be deemed severable from the other terms of this Charter Amendment. with this Article. (b). The General Plan of the City shall at times contain a provision that the Tenant Ownership Rights Charter Amendment shall be the only procedure by which a multifamily conversion may be approved" is hereby repealed. (b) A new Section 2018 for the Santa Monica City Charter, is hereby adopted: "2018. Prohibition of non-smrph conversion. No multifamily residential conversion, whether by condominium, stock cooperative, community apartment, cooperative apartment, or other means, shall be approved unless it is approved in accordance with the Santa Monica Residents Protection and Homeownership Charter Amendment." SECTION 16. Amendment to this Charter Amendment. This SMRPH Charter Amendment was enacted by the People of the City of Santa Monica. It shall not be modified or amended by the City Council. --- SECTION 15. Amendment to the City Charter. (a). The Santa Monica City Charter, Section 2018, which reads as follows: "2018. Prohibition of non- TORCA conversion. (a) No multifamily residential conversion, whether by condominium, stock cooperative, community apartment, cooperative apartment, or other means, shall be approved unless it is approved in accordance