In March 2021, the Boston City Council and Mayor’s office approved an amendment to the Boston Condominium and Cooperative Conversion Ordinance (“Boston Conversion Ordinance”). Below is an overview of the Boston Conversion Ordinance and a summary of the changes and new requirements.
The protections and benefits under the Boston Conversion Ordinance (most notably the re-location payments) are greater and more extensive than those under state law.
Conversion Ordinance Overview The conversion of certain apartments to condominiums (or cooperative units) is governed by state law or, where applicable, municipal ordinance as towns and cities can enact stricter provisions, like Boston has done. The Boston Conversion Ordinance -- like the state law -- applies to any residential property built before December 1983 that has four or more rental units. The state ordinance and Boston Conversion Ordinance are triggered when the owner intends to convert a multi-family residential property to a residential condominium or cooperative use. State law or applicable ordinances then kick in to provide certain protections to the tenants.
The basic protections afforded to tenants under the state and local conversion ordinances are:
• Notice Period (during which tenants cannot be evicted)
• Limits on rent increases (during the notice period)
• Right of First Refusal (to purchase the converted unit)
• Re-Location Payments (per household)
The Boston Conversion Ordinance provides enhanced protections for low-moderate income tenants, disabled tenants, and elderly tenants. The protections and benefits under the Boston Conversion Ordinance (most notably the re-location payments) are greater and more extensive than those under state law.
The Updates The new amendment to the Boston Conversion Ordinance revises the conversion process in several material ways: (1) it requires the owner to work with the Department of Neighborhood Development (DND) to create a Conversion Plan; and (2) it requires the owner to obtain a Conversion Permit from the Inspectional Services Department (ISD) before units are sold.
The New Process Once a Boston property owner decides to convert their rental property (assuming it is a pre-1983 building with four or more units), the owner must:
1. Notify Tenants of their Rights under the Boston Conversion Ordinance (with a copy to DND).
2. Apply and obtain a Conversion Plan from DND (landlords must apply even if building is vacant).
3. Apply for a Conversion Permit from ISD ($1000 per unit).
Legal – Recording the Master Deed The legal conversion of the property from multi-family to condominium occurs when the land and building are submitted to condominium form of ownership by the recording of a master deed. The new amendment to the Boston Conversion Ordinance relates to the conversion as it impacts the occupancy of the housing and does not change the legal conversion process of the property. An owner of property covered by the Boston Conversion Ordinance may file a master deed with the Suffolk County Registry of Deeds at any time, thereby completing the legal conversion of the property, but cannot sell a particular unit (and alter the occupancy of the premises) until a conversion permit has been issued by the City’s ISD for that unit.
Financial – Conversion Tax A final practice point for those in Boston that is not new but is unique: there is also an excise tax (the “Tregor tax”) levied at $500 per condominium (exempting the first unit), which must be paid prior to the recording of the master deed. The Suffolk County Registry of Deeds will not record a master deed (or amendment adding units) if the master deed does not have a Tregor Stamp.