Apartments converted to CondosMEMORANDUM
July 28, 2003
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Converting Apartments to Condominiums
Building Services Manager Rich Russell is providing information about the process of
converting apartments to condominiums. The perceived benefit to the property owner
to make this conversion is that the property taxes are reduced by up to 50%, based on
the fact that the residential rollback taxes property at about 50% of value. In
discussions with City Assessor Rick Engelken, the assessed valuation for a
condominium is significantly higher than an apartment, wiping out that financial gain.
Building Services Manager Rich Russell recommends adoption of an ordinance
regulating the conversation of apartments to condominiums and adoption of a resolution
adopting fees related to the conversion process. The regulation is consistent with the
Code of Iowa, requiring buildings being converted into condominiums to comply with the
building code in effect on the date of conversion.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Rich Russell, Building Services Manager
CITY OF DUBUQUE, IOWA
MEMORANDUM
July 23, 2003
TO: Michael Van Milligen, City Manager
FROM: Rich Russell, Building Services Manager
RE: Converting Apartments to Condominiums
INTRODUCTION: The Building Services Department recently received requests
from two landlords who wanted to convert their apartment buildings to
condominiums.
DISCUSSION: The primary reason that apartment building owners are
considering these conversions is to reduce property taxes for their property. As
you know, apartment buildings are taxed at the commercial rate (with very little
rollback). Condominiums are taxed at the residential rate (with the approximate
50% rollback).
Apartments that are converted to condominiums and leased by the owner like
apartments are nonetheless taxed as residential property under the rules of the
Iowa Department of Revenue and Finance. Under the revenue rules, it does not
matter whether the owner occupies the condominium unit or leases it.
The process involved includes developing a condominium agreement by an
attorney and a survey of the units by a licensed land surveyor or engineer. The
building services department will ensure that the units meet the separation
requirements for wall and or floors between units, but newer apartment buildings
are constructed to meet that requirement regardless of whether the units are
rented or owned individually.
As you can see, the process is fairly simple, with some upfront expenses to the
building owner. The benefit to the property owner is that the property taxes are
reduced by 20 to 50%, based on the reassessment by the City Assessor's office.
Corporation Counsel Barry Lindahl, Administrative Services Manager Pauline
Joyce, Director of Housing and Community Development David Harris, you and I
have met on two occasions to discuss the City's response to the requests for
conversions.
Barry Lindahl researched the Code of Iowa and found that Section 499B.20
requires buildings being converted into condominiums to comply with the building
code in effect on the date of the conversion. I have attached a copy of that code
section for your review.
The proposed ordinance similarly requires that the condominium comply with the
building code at the time of conversion and also requires that a property owner
who intends to convert property to a condominium must file the declaration of
condominium with the city clerk 60 days prior to recording the declaration with
the county recorder. The sixty-day notice requirement will allow the city manager
to determine whether the proposed condominium meets the current building
code. If so, a certificate to that effect is issued to the property owner. If the
property does not meet the current building code, the property owner may not
record the declaration of condominium.
I informally surveyed several cities in Iowa to find out how they were reacting to
these requests. The City of Iowa City and the City of Marion have already
adopted ordinances reinforcing that the converted units meet the building codes
in effect at the time of the conversion. The City of Iowa City also adopted fees
related to the conversion process. I have attached these ordinances and
resolutions for your review.
The recommended fees for the City of Dubuque are as follows:
(a) Initial consultation requesting information on the City's
condominium conversion policy: $0
(b)Condominium conversion: $200
(includes project specific consultation and plan review)
(c) Inspection
(1) If a building permit is required: $0 (declarant will be
assessed building permit fee)
(2) If a building permit is not required: $30/staff hour (one hour
minimum)
(d) Certificate of Compliance
(1) If a building permit is required: $0 (declarant will be
assessed building permit fee)
(2) If building permit is not required: $25
RECOMMENDATION: The City Council should adopt the attached ordinance
regulating the conversion of apartments to condominiums and the attached
resolution adopting fees related to the conversion process.
CC:
Corporation Counsel Barry Lindahl
Administrative Services Manager Pauline Joyce
Director of Housing and Community Development David Harris
Preparer: Barry A. Lindahl, corporation Counsel Address: Suite 330, Harbor View Place, 300
Main Street, Dubuque, IA 52001 Telephone: {563) 583-4113
ORDINANCE NO. 61-03
AMENDING THE CITY OF DUBUQUE CODE OF ORDINANCES CHAPTER 11
BUILDINGS AND BUILDING REGULATIONS BY ADOPTING A NEW ARTICLE V
CONDOMINIUM CONVERSIONS REQUIRING THAT AN EXISTING STRUCTURE
SHALL NOT BE CONVERTED TO A HORIZONTAL PROPERTY REGIME UNLESS
THE CONVERTED STRUCTURE MEETS BUILDING CODE REQUIREMENTS AND
PROVIDING THE PROCEDURE FOR THE ISSUANCE OF A CERTIFICATE OF
COMPLIANCE
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. The City of Dubuque Code of Ordinances Chapter 11 is amended
by adopting the following new article:
V. Condominium Conversions
Sec. 11-70. Building Code Requirements:
No person shall file a declaration in the office of the county recorder to
convert an existing structure to a horizontal property regime unless a certificate
of compliance has been issued by the City Manager that the converted structure
meets the building code requirements of this Code of Ordinances in effect on the
date of conversion.
Sec. 11-71. Filing Declaration with City Clerk:
At least sixty days before being recorded in the office of the county
recorder, the declarant shall file a copy of the declaration and as-built plans of the
structure with the city clerk to enable the city to establish whether or not the
converted structure meets the building code requirements. The declarant shall
also at the time of filing the declaration and plans pay a condominium conversion
fee established by resolution of the City Council.
Sec. 11-72. City Manager to Investigate; Certificate of Compliance
(1) Upon receipt of the plans, the City Manager or the City Manager's
designee shall conduct an inspection of the structure to determine whether or not
the structure meets the building code requirements.
(2) If the structure meets the building code requirements, the City Manager
shall isSue a certificate of compliance to the declarant.
(3) If the structure does not meet the building requirements, the City
Manager shall notify the declarant in writing as to the building code requirements
not met by the structure.
Passed, approved and adopted this 4th day of August, 2003.
Attest:
Jeanne F. Schneider, CitY Clerk
F:~USERS~
4th dayof August. ,2003.
Terrance M. Dugga~layor
RESOLUTION NO. 267-03
RESOLUTION ADOPTING FEES FOR CONVERSION OF EXISTING
STRUCTURES USED FOR HUMAN HABITATION TO HORIZONTAL
PROPERTY REGIMES (CONDOMINIUMS).
WHEREAS, Iowa law and the City of Dubuque Code of Ordinances require that if an
existing structure used for human habitation is to be converted to a horizontal property
regime (condominium), the declarant must file the declaration with the city in which the
regime is located so the city can inspect the structure;
WHEREAS, Iowa law and the City of Dubuque Code of Ordinances require that the
existing structure used for human habitation shall not be converted to a horizontal
property regime unless the city's building code requirements in effect at the time of the
conversion are met;
WHEREAS, the City Council adopted an ordinance authorizing the adoption of a fee
schedule to offset the costs of conducting the required inspections,
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
The fees to conduct site and building inspections and to fulfill all other obligations of
Iowa law and the City of Dubuque Code of Ordinances shall be as follows:
(a)
(b)
(c)
(d)
initial consultation requesting information on the City's condominium
conversion policy: $0
Condominium conversion: $200
(includes project specific consultation and plan review)
Inspection
(1) If a building permit is required: $0 (declarant will be assessed
building permit fee)
(2) If a building permit is not required: $30/staff hour (one hour
minimum)
Certificate of Compliance
(1) If a building permit is required: $0 (declarant will be assessed
building permit fee)
(2) If building permit is not required: $25
Passed, approved and adopted this 4th day of August, 2003.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, City Clerk
RESOLUTION NO.
RESOLUTION ADOPTING FEES FOR CONVERSION OF EXISTING
STRUCTURES USED FOR HUMAN HABITATION TO HORIZONTAL
PROPERTY REGIMES (CONDOMINIUMS).
WHEREAS, Iowa law and the City of Dubuque Code of Ordinances require that if an
existing structure used for human habitation is to be converted to a horizontal property
regime (condominium), the declarant must file the declaration with the city in which the
regime is located so the city can inspect the structure;
WHEREAS, iowa law and the City of Dubuque Code of Ordinances require that the
existing structure used for human habitation shall not be converted to a horizontal
property regime unless the city's building code requirements in effect at the time of the
conversion are met;
WHEREAS, the City Council adopted an ordinance authorizing the adoption of a
schedule to offset the costs of conducting the required inspections, fee
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CiTY OF
DUBUQUE, iOWA:
The fees to conduct site and building inspections and to fulfill all other obligations of
Iowa law and the City of Dubuque Code of Ordinances shall be as follows:
(a) Initial consultation requesting information on the City's condominium
conversion policy: $0
(b) Condominium conversion: $200
(includes project specific consultation and plan review)
(c) Inspection
(1) If a building permit is required: $0 (declarant will be assessed
building permit fee)
(2) If a building permit is not required: $30/staff hour (one hour
minimum)
(d) Certificate of Compliance
(1) If a building permit is required: $0 (declarant will be assessed
building permit fee)
(2) If building permit is not required: $25
Passed, approved and adopted this _
day of August, 2003.
Attest:
Terrance M. Duggan, Mayor
Jeanne F. Schneider, City Clerk
4839
centage equal to the in-
terest owned by each owner i: after
first paying out of the shares of the
apartment owners
purpose, ail liens on t ~ in the
property owned by
[C66, 71, 73, §499B.16]
499B.17
All ~ ' the council of
but unp]~a
charg~'ble to any a
lien~4~ such apartment prior to ~ ex-
ce~ only (1) tax liens on the a
ay assessing unit and s and (2) all
sums unpaid on e of record. Such
lien may
owners ( thereof,
behalf of the a
In the event
ment ffso
meut of~
powe~, unless prohibited b,
in the apartment at
quire and hold, lease,
same. Suit to recover
paid common
shail have
to bid
sale, and to ac-
and convey the
for un-
shail be maintainable
the lien securing
[C66, 71, 73, §499B.17]
499B.18 expenses before fore-
closure.
etd or purchaser of an ~
title t
the the ac-
Such unpaid share of
sessments shail be
to be common
of the apartment own-
[C66,71,! 79,81,§499B.18]
Common expenses after
a voluntary conveyance the an
shall be jointly and liable
the grantor for all assessments
agaLust the latter for the of the
common expenses ~ of the grant or
conveyance, without
paid
, any such grant-
ee shail be entitled'
setting forth
the amoun' .gainst the
grantor and grantee shall not be liable
nor shall ti
lien for, unpaid assessments against
grantor in excos~
[C66, 71, 73, 75, 77, 79, 81, §499B.19]
499B.20 Conversions to meet building
codes.
After April 25, 2000, an existing structure shall
not be converted to a horizontal property regime
unless the converted structure meets local city or
county, as applicable, building code requirements
in effect on the date of conversion or the state
building code requKrements ff the local city or
county does not have a building code. For pur-
poses of this section, if the structure is located in
a city, the city building code app~as and if the
structure is located in the unincorporated area of
the county, the county building code applies.
2000 Acts, ch 1142, §4, 5
CHAP~R 500
COLLECZ MARKETING
500.1 ~ 500.3 Applicability ofl
500.2 Liqlfidated damages.
500.1 Authorization. / nnnmg, ¢
Persons engaged in the con, ct of any agricuL
rural, horticnltm-ai, dairyfstock, mercantile,
,fort
ORDINANCE NO. ~
AN ORDINANCE AMENDING CITY CODE TITI. E 14, ENTITLED "UNIFIED ,DEVELOPMENT CODE,"
CHAPTER 5, ENTITLED "BUILDING AND HOUSING," BY ALONG A NEW' ARTICLE K ENTITLED
"~ONDOMINIUM CONVERSION CODE" TO ESTABUBH PROCEDI'JRES ,.FOR CON~RSlON OF
EXISTING STRUCTURES USED FOR HU~ ~BITA~ON ~. HOR~ONTAL PROPERTY REGIMES
WHER~S, on April 25, 2000, the state ~glslature e~ed '$[F. 2426 e~tified "An Act'Relatmg to the
' O~lg~ation, Valuation, and Ta~tion of Pmpe~ in a H~zon~l P~y R~ime and lnCtu~in~ an
. E~ct~e Da~/' S.F. 2426 requires that if an exis~ng s~m is tO ~ ~nv~ed to a hodzon~ property
r~ ~e (condominium), ~e de~amnt must file ~e d~ra~n wi~ ~e c~ in which thc:: regime is
' : . ~ the:ci~s building de~ment can Ins~tthe ~e; ~d
~HEREAS, S.F. 2426 furor requires that the ~isting stru~re Shall not b~ cenw~;ted to a
: pro~y reg me unless the city's building requirements ~n effect o~ the date of conve;~km am m~; and
'WHER~S, ~nsistent with H.F. 76~, ~ich amend~ Iowa C~e ~9~B.11 in ~999, S.F 2426
a~t~le only to condominiums used or l~tended ~.~ us~ for human halation; and
~ER~S, ~e Ci~ Council ~lieves ~at it is in the ~st ln~fes~ of the City of Iowa C~ty to e;~tablish a
. ' ~um ~ fulfill the requirements of S.F. 2426.
NOW, THEREFORE, BE IT ORDAINED BY THE CI~ COUNCIL OF TH[- cF1rY OF IOWA CITY.
·IOWA:
' SECTI~ I. AMENDMENt. Title 14, enfl~ed "un,ed ~vebpme.nt C~e," Chapte~ 5 entit~
.. a~ Ftous~ng,~ is hereby amonded by ad,rig new Afficle K, ended 'Co~mium Co~w~,o~ Code" as
. loews:
(a) All declarations to ~nve~ an existing structure, which iS ~ for huma~ habitation o,~ i~te~ded for
' ~ fo~ human habitation, to a ho~zon~l p~o~ m~me $~'be a~d ~ ~e city C~erk.
(b) U~n filing, the Ci~ Clerk w~l provide a co~ of the declaration to tl~o Bu~di~g
: (C) B~ore any inspection is ~nduct~, the d~larant m~t:
(1) Submit "as-built" plans for mvi~ by ~e Building Official ~at indicate compl[~nc<~ w{~h the C~y
". . ~u~di~ Code requirements in effect on the date ~ the ~nvemion; '~d
(2) Pay ~ndominium conversion f~, which will be set by ~olu~n,
(d) After "as-bui~ts" am sub ~ tied a~d the f~ paid, the Bu Id ng.~lal sh~ ~';~nduct s~te e~a bu~ ng
· . ~S~ions to determine whether the struc~re commies ~ the CI~ BUildi~'C~de r'<~quir{~mffnl~ t[~ effect
= On ~e da~ of the ~nversion
(e) Within six~ (60) days of the declara~on being fil~ with t~e Ci~ 'Cle~. the ~uildln~ Off~c~
~ue a ¢edificate of Comptia~ ir the ~ucture mee~ the CI~ Bu~ng C~de ~equu'emen~ ~ nff~ct ~'n
· e d~e of the ~nvers~n or provide ~n notch to.~e de~ara~ ~ting why the str~m~ur~ does
· m~t the City Building Code ~uirements in effect 0n the ~ o[.~e
8E~ION I11 PENALTIES FOR .VIO~TION. The v~at~ of .any provision {:,t thh~ o~'di0ance ~
.... munl~l infraction.
SECTION IV. SE~E~8 L ~ Irany section, p~vision o~ peA.of the Ordinance sh~dl be adjudged t~ b~.
. ~vali~ or unconsat~onal, such adjudi~tion uhall not ~c[ ~e va~di~ of the Ordinem':,~ as ~J whole or any
s~n, pmvis~n or pa~ thereof not adjud~d invalid ~ u~st~al.
SECTION IV. EFFUSIVE DATE· This O~i~n~ shall be in eff~ after its fl{m~ ~a,.~apo. app~-ova~
"~ubli~on, as provided by ~w.
Passed and approved this 5th~ayof_ Hatch ......... 2001.
: .: Cl3'~ CLERK
AplXOVed by
"¢~ Attorneys Office
II
ID=
Prepmed hy Sut;ar~ Dulek, Assistant City Attorney, 410 £, Waslfl~lgto~t ~t:, Iov~ City. IA 5224[~I..t-356,5030
2
RESOLUTION NO. 0~-5z :'
RESOLUTION ADOPTING· FEES 'FOR CO~ERSlON OF EXISTING
STRUCTURES USED FOR HUMAN 'HABrtrATION TO HORIZONTAl..
PROPERTY REGIMES (CONDOMINIUMS).
'WHEREAS, on April 25, 2000, the state legislature enacted' S,'F, 2426,, which requires that if an
existing structure used for human habitation is to be converted tO a horizontal property regime
(pendomir]ium), the declarant must file the decla~ation with '~he city in which thc, .regime L~
I~caled so the city's building department can inspect the .structure;
~t/HEREAS, S.E 242(3 further requi{es that the existing Stracture used for human f!abitation
,~_ all not bc converted to a horizontal property regime unless 'the city's building ~equirements in
~f'Ceot on the date of conversion are met;
, V)CHEREAS, the City Counc I adopted ar~ oral nance authoi'izlng the adoption of a fee s~hedule to
~ 4ffset the costs of conducting the required inspections,
~OFryW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA
, IOWA:
·T[ie fees to conduct site and building inspections and to fulfill all other obligation~ of $ F 2426
' .~all be as follows:
(al
(bi
(c)
(d)
Initial consultation requesting information on' the City's condominium c~nversion
policy: no fee
Condominium conversion: $200
(includes project specific consultation and plan review)
Inspection
(1) If a building permit is 'required: $0 (declarant will be~ assessed buildfrtg permit
fee)
(2) If a building permit iS not required: $301 ~aff hour (one hour minJmt~)
Certificate of Occupancy ,
(1) If a building permit is required: $0 (declarant. will'be; asse,~sed building perntit
fee)
(2) If building permit is not required: $25
Passed and approved this
5th
· '':: ' CITY'CLERK
· }
· C~:Attomey's Office.
CONDOMINIUM CONYERSION
APPLICATION,
SUBMITTAL CHECK UST ANOFEE SCHEDULE
:.Site:Address: ............................... !
'CttY: .............................
Daytime Phone: . ::
. y, ..cor'-,tact Person: ................................
:' ~' :P!Oj~ct: Convert Multi-Family Dwelling Units to
State ...................................... Zip ...... ~
Other Phone: ......................................................
Phone: ...................................................................
...... Condominiums
* '.Aff,~iclarations to convert an existing mu~-famtly structure to condominium? sh~ltl be filed with the City
Clerk,
' :" U~ filing the City CI .~rk will provide a oopy of the deolafattoll to the BuilUing Offioial
, ~ ~ any inspection is conducted, the declarant must:. . . ,
, (!) ~;ubmlt as-butlt plans for review by (fie Bulldlng OffiCial ttlat tnO'lcate cornph,:~nc,,, with, the City Bulldir~
· .(. ' ' 7 . '~tecle requirements in effect on the date of the converston;.and
'. :: ..(2) il~aycondominium conversion fee, ' . .
i' Im~ .~ct site and building to determine whether the stnJcture complies with the City Building Code
ferments in effect on the date of the Convemion..' '
',.. 'W~t~n .sixty (60) days of the declaration being filed w th the Ci~ .Clerk,'the Bufldin90~ciat shall issue a
. . '~cate of Compliance if the structure meets tlie City Cod~e. requirements or provide wt;Jtter~ notificatie~
..: t6'itl~:e d~clarant stating why the structure does ndt meet the CitY' Cede requirements. :
'.The:fee~, ..to Conduct site and building inspections and to fulfill alt ot~? obi gafions or' the Condominium
.,{?,o~n shall be as follows: .
· i.'' ~ttfl(i! corlsultation requesting information on the City's COndordihium conversion policy' nO fee
.; .~.~nium conversion: $200
..'. (tllll~fdes project specific censultation and plan review)
('1) Ifa building permit is required: $0 (de~;larant will be assessed b~JIIdin~ permi~ fee.)
(2).~a bulldl g permit is not required: $;:~01staff hour.(one tu:~t r~intmum)
· ,, ".~lfica{e of Occupancy
: ' (1I.) If:.~ building permit is required $0 (declarant will be assessed building permit fee)
· .~.. :(~1.:~ I~uilding permit is not required: $2'5
'. ' GOUNTY OF ,IOHNSON
~'I~A t'E Of IOWA
AFFIDAVIT OF "CERTIFICATE OF'COMpI,,I~IN(
re: CONDOMINIUM CONVERSION
)
)
)
· I, Douglas Boothrqy, upon being duly sworn do d,~pbse ~'n(l state
I am thc building official tbl- the City of Iowa Ci.ty,
on ...................... ........................... 200 ' , tile ("il ¥ of I,:~w;i it5 ~sst~d ;.i
· : . ' ~,ertilicate el'Occupancy tbr the structure located at
"' : ' ~Wa C,ty, Iowa, and legally described as follows:
.~tlerelnafler the "Real Estae")
3. ~rhc City of Iowa City has inspected said stmctilre; ami ~"I met th,:. City Building
Code r~uiremems in effect when thc Ceffificate of.Occup~cy ' ' '
4. '[]tis A ffidavit is being Wen in order to e~tabti'sh compti:mc~~ w'~h Iowa ( ode
[ 499B.20 (2001) and l,wa City Ordinance No. 01-3960,. which is. codific:d m ..~y [ otl~.
Do.ugta~.'B0othl,oy
S~ bsc~Sbed and sworn to me this
day of '....2 ....
Notary'Pt}blic-S.tat{: i:,f h,w:t
4
Subject: Marion Condo Conversion Ord
160.27 CONDOMINIUM CONVERSIONS. For the purposes of condominium conversion,
structures built prior to April 25, 2000 and thereafter converted to a horizontal property regime
(condominium) are not required to be updated to comply with the building code in effect at the time
of the conversion, except the following building code provisions shall be complied with:
· Fire Protection Systems
· Means of Egress
· Structural and Life-Safety concerns specifically noted
The Building Official may waive compliance with any or all of the above exceptions where he
determines compliance to be unduly burdensome or not practical or reasonable given the nature of the
structure.
06/17/2003