CONDO CONVERSION RIGHTS

Are you an Oakland homeowner looking to defray some of the costs of adding an Accessory Dwelling Unit (ADU) to your property? Locale Real Estate will buy the condo conversion right generated by your new ADU for between $3000 and $6000. Let us handle the paperwork and put easy money in your pocket as you make your ADU dream a reality!

Don’t know what these conversion rights are? You’re not alone. In early 2020 the Oakland City Council passed exciting new legislation specifying that the creation of a new ADU on generates one condo conversion right on the basis of the ADU adding one unit to the city’s overall housing stock. Most homeowners would have little to no use for this conversion right - and the right quickly disappears after 60 days of issuance of building permits - so get in touch with us before it’s too late and start earning money from your ADU investment before it’s even complete.

NEW LEGISLATION IN OAKLAND LEADS TO UNTAPPED HIDDEN VALUE WITHIN NEW ADU’S FOR HOMEOWNERS

“Conversion rights” are generated by projects which add housing units to the City’s rental supply, and one conversion right is equivalent to one housing unit within such a project. Conversion rights may be generated by project(s) either undertaken by the subdivider or by others from whom subdivider has obtained or acquired such “rights” in a legally binding manner by a recorded document to be approved by the Advisory Agency.

-Oakland City Council Ordinance amendment to Oakland Municipal Code Chapter 16.36, adopted February 6, 2020

Click here for complete text of the City of Oakland ordinance amendment, dated February 6, 2020

FAQs - SELLING MY CONVERSION RIGHT

• How quickly do I need to decide?

  • The City of Oakland has mandated an accelerated timeline that the first component of the conversion rights transfer – the bill of sale and recorded agreement – needs to be executed within 60 days of the issuance of the project’s building permit.

• Will selling the condo conversion credit generated by my ADU have a negative impact on my home’s value?

  • The creation of a conversion right from a new ADU is a benefit that most homeowners creating ADUs do not even realize they have. Selling the credit simply involves a recorded statement tied to the property that the ADU no longer has a condo conversion right (because that right has already been utilized by you selling the right).  Further, selling the right will not affect your property’s value because the right needs to be sold within 60 days of the issuance of the ADU’s building permit. This time constraint would make it nearly impossible for future homeowners down the line to be able to exercise the right to sell

• What does the transfer of rights for the condo conversion mean in terms of my ownership of my property?

  • The transfer of the condo conversion rights does not affect your ownership of your property. It is simply a recorded statement tied to the property that the ADU no longer has a condo conversion right (because that right has already been utilized by you selling the right).

• How do I sell/transfer the right?

  • The transfer first involves a simple bill of sale and recorded agreement. The second step to transfer the right is proof of a Certificate of Occupancy from the City of Oakland upon completion of the ADU unit.

• What do I have to do to get paid?

  • First, you must first transfer the credit via a bill of sale and recorded agreement. Locale will line up the paperwork for you and will make this step easy and seamless. Then you will need to finish construction/rehab of your ADU unit and obtain a Certificate of Occupancy from the City of Oakland, just as you were intending to do regardless of selling the credit or not.  

• When will I be paid?

  • Locale will pay the homeowner a refundable deposit of $1000 at the signing of the bill of sale and recorded transfer agreement. This deposit is contingent upon the owner completing work on their ADU unit and ultimately obtaining a Certificate of Occupancy (CO) for it from the City of Oakland.  Upon furnishing the CO, the homeowner’s responsibility is complete, and the homeowner will be paid the remaining balance.

• How will I be paid?

  • Locale Real Estate will pay you by check or electronic transfer, depending on your preference.

• Can I just use the condo conversion credit right myself?

  • Yes of course, but a condo conversion project is a complicated endeavor that would involve the purchase of a new property to convert as well as an acquisition of even more conversion credits. A typical conversion process lasts nearly 18 months and has onerous City, State, and Building Department regulations, etc.