Surf City Condos’ Status Is Illegal

Dozens of Huntington Beach apartments have been illegally converted to condominiums in recent years, according to city officials, who say sellers could face criminal charges and unwitting buyers will have to pay more than $7,000 each in back fees.

So far, the city has identified 25 to 40 four-unit buildings that apparently were illegally converted as early as 1998, said city Planning Director Howard Zelefsky.

City Atty. Jennifer McGrath said an investigation by her office and the Planning Department may uncover more. “There are a lot of people impacted by this who are not aware of this,” she said.

The owners of the suspect properties, who probably were unaware that they bought former apartments without the required city permits and approvals for the conversion, will be notified by mail in May, McGrath said. City officials will hold a community meeting several weeks later to answer questions and tell condo owners how to make their homes legal.

To help the homeowners, she said, the city is taking steps including possible changes to the zoning code that would permit “most, if not all” of the properties to meet the code. “The way it’s written right now, they can’t,” she said.

The owners, however, will have to pay more than $7,000 in city permit fees in a lump sum.

The city will turn over to police and prosecutors any evidence that sellers or real estate agents broke the law by arranging the illegal conversions, McGrath said.

The conversions are a concern to the city, Zelefsky said, because they threaten to upset the balance between rental and owner-occupied property in the city. According to the 2000 census, Huntington Beach dwellings were about 60% owner-occupied and 40% rentals.

“The law was written to make it difficult to make condo conversions” because the city needs a healthy mix of both, he said. But it is more profitable to sell condominiums than rent apartments, particularly in Huntington Beach, a formerly working-class city that has become dramatically more desirable -- and expensive -- in recent years.

The problem came to light about two years ago, Zelefsky said, when the building department received a complaint that work was being done at a residence without the necessary permits.

The complaint was forwarded to the Planning Department, which investigated and found that the property was converted from an apartment to a condominium without permits.

Six months later, another complaint was received by the Planning Department, and city officials asked whether the problem was limited to the two units or was more widespread.

“We started digging under the surface,” McGrath said. “Two became four, and that’s when we started digging in earnest.”

The city also received complaints from new owners who said they were promised certain improvements by the seller that were never done.

Zelefsky said the city launched an extensive review of condo sales in the city and uncovered even more units that were condominiums in county records but listed as rental properties by the city.

“We started to connect the dots, and three or four of the same names kept popping up as doing the conversions,” Zelefsky said.

City officials declined to name individuals or real estate companies that arranged the conversions.