These articles make me think of presenting them to my landlord and explaining how he is so much better off paying me to leave and "condo" my unit than wait 8 years.

Given that landlords are so restricted on their ability to sell their own property I wouldn't be surprised if landlords who wanted to condo their building(s) kept rental units empty....

How would that work out for the sacrosanct goal of cheap rental housing?

Quote:

Quote:


I bought my 675 sq ft, 1 bedroom apt on Hamilton Park for $75K... in 1997. And that's about $14K less than my landlady had originally paid for it in the late 80s. Now THAT'S a good deal.

Quote:

What needs to be further stated in this article is that Hudson County specifically provides for additional protection for qualified senior citizens and the disabled:

Tenants' Rights in New Jersey

Special Hudson County protections
The law provides additional protections for certain tenants living in Hudson County. Cite: N.J.S.A. 2A:18-61.40. Qualified Hudson County tenants are permanently protected from eviction due to the conversion of their building. Qualified tenants must continue to pay rent and follow reasonable lease rules. They can still be evicted if their landlords can prove in court one of the other legal causes for eviction.

Qualifications for protection. Hudson County tenants qualify for protection from eviction if their household income is below certain amounts that are established each year. These tenants must also have lived in their apartments for at least 12 months before they apply for protection. They must also apply for protection before the landlord gets permission from the state to convert.

Before an owner can convert, all tenants in the building must be notified in writing that they have a right to apply for special protection from eviction. The state will not allow the owner to convert unless the owner can show that all tenants have been notified of their right to apply for protection.

How to apply for protection. The city will send an application to every tenant in the building before a Hudson County owner converts a building. Tenants who wish to apply for protection must fill out the form and return it to the town within 60 days of receipt. Tenants may also have to sign a written statement, sworn before a notary public, giving their income and stating that they have lived in the apartment for 12 months.

The city must notify tenants who qualify in writing within 30 days after receiving the applications. Tenants who do not qualify for these special Hudson County protections still have the same rights as all other tenants in conversions, as discussed above.

Other requirements. Hudson County tenants can lose their protection against eviction if their household income goes higher than the amounts allowed in the law. Tenants can also lose protection if they no longer reside in the apartment. In addition, the rent for protected Hudson County tenants continues under rent control if their building is covered by rent control. An owner who asks the rent control board for a hardship increase cannot use increases in costs from conversion as a reason for a hardship rent increase. If rent control does not apply, an owner can only receive reasonable rent increases that do not include any increases in costs resulting from conversion.

Quote:

Maybe he was figuring in a $500/month condo fee... but either way, if I had a choice between giving a landlord $1100 a month or building some equity at $1800 a month, I'd stay put... at least to flip the place... $225k seems like a good deal.

Mark.

"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.


$1,800-a-month mortgage payment... really? even with no money down it shouldn't be 1,800. LeBlond spend the next three years improving your fico score.

wow three months between articles? maybe I should just wait for the book

Note: This is part II of a two-part series on condo conversions. The first part "Not everyone is converted" was published on Sept. 23.
================================

Condo, or no can do?

When apartment buildings are converted, it creates problems for tenants

Ricardo Kaulessar
Hudson Reporter
12/24/2007

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 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.

Not everyone is converted
While condo conversions force out renters, it's often a tough investment

Ricardo Kaulessar -- Hudson Reporter -- 09/22/2007

CONDO CONVERTER ? Jersey City resident John FioRito is one of the partners in Point Capital Partners, the firm which is currently converting several rental buildings in Jersey City into condos.
Those who can't build new condos often do the next best thing - buy an apartment building and start converting.

It has happened at a rapid pace in downtown Jersey City, even with small multi-unit properties.

In the entire town, 38 applications for condo conversions were submitted to the city from January to June of this year.

But for new owners, it's not always easy to profit. And tenants don't always immediately know whether to buy out their rental unit or move out within the three year notice period.

This is the first part of a two-part article on condo conversions from the perspectives of those who uphold or support the practice and those who are forced out.

The process of condo conversion

A condo conversion is the process of transforming rentals into individual for-sale units.

The State of New Jersey has several laws that govern how conversions take place in order to protect both the owner and tenant. Essentially, it 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. The notice of intent to convert and the conversion plan must be sent by certified mail.

In addition, the owner must give tenants a three-year notice to vacate the rental unit because of the conversion. The notice of intent to convert and the conversion plan documents must be given to all affected tenants at least 60 days before giving the tenants the three-year notice to quit.

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. 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 of eviction), rent increases cannot be unreasonable. After the three-year notice period, the landlord may file for an eviction if he chooses to.

State law protects certain groups from eviction for up to 40 years: qualified senior citizens and disabled people. And there are county laws that also 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 some other reason, such as nonpayment of rent.

The Army didn't prepare him for this

Jersey City resident John FioRito is one half of a two-man company called Point Capital Partners, an investment group based in Jersey City and Chatham.

The Army veteran works with fellow vet and best friend Ted Williams, an investment broker.

Their specialty is condo conversions, as they have acquired eight buildings with 140 units in nearly two years in Jersey City, and are converting them into condos.

FioRito spends much of his time as project manager, overseeing the conversion work at one of five multi-unit buildings totaling 40 units. They are all located on Sixth Street across from the formidable Sixth Street railroad embankment in downtown Jersey City.

Point Capital acquired the buildings in April 2006 on behalf of investors for $5 million.

FioRito said this is anything but a get-rich-quick opportunity.

"When I think back, I would have to say that based on what I know now, I would have second thoughts about doing this," Fiorito said.

FioRito pointed out that for each $1 million investment in a building, nearly a million was spent on everything from renovation of each unit to retaining lawyers to guide them through the process.

"That's why we do condos rather rentals, because of the massive amount of money just for renovating the buildings, as these buildings date back to the 1880s," FioRito said.

He also said that the condos, if all 40 units were converted, may sell from $250,000 to $300,000. But of those 40 units, the money earned from the first 24 will pay off banks that issued loans for acquisition. Profits from the 12 will go to investors in this project, and money from the last four will go toward paying Fiorito and Williams.

So far, 200 and 202 Sixth St. have not been converted yet. Point Capital may pursue rentals in 202 because of the slumping condo market. Building 204 is currently under construction, 206 has seven of eight units sold with an eighth pending, and 208 has four purchased.

As he was interviewed on Sixth Street near the buildings, he pointed out that two of the buildings were not yet converted, as there were still a total of seven units still occupied by tenants who are exercising their three-year stay option, which means they can stay there until 2009.

Dealing with tenants

One of the major tasks for any condo conversion is dealing with the tenants.

FioRito said that after the acquisition of the buildings, he was able to evict several tenants immediately whom he considered transients.

But it became more difficult with senior citizens and those with living on limited incomes.

"I literally drove people in my car to look for apartments; I network with landlords across the city who could put up families who are low and moderate income," FioRito said. "You have to go the extra mile."

He also had to deal with several tenants who went to city officials and complained they were being evicted illegally, only for FioRito and his partner to have to show paperwork in a meeting with City Councilmen Steven Fulop and Mariano Vega.

FioRito said while he understands the tenants' plights, they will have to face the reality of the situation.

"You can hang out in our buildings for the rest of the time, as following state law, and then at the end of three years get nothing," FioRito said. "Or you can move on with your life and you'll have money to relocate someplace else."

In a future issue, Part Two will profile the views of tenants, city officials, and others on condo conversions.

For comments on this story, contact Ricardo Kaulessar at rkaulessar@hudsonreporter.com.