§ 41B.3. "SALE OF A MULTI-FAMILY RESIDENTIAL BUILDING" DEFINED.

(a) General Definition. As used in this Chapter 41B, “Sale of a Multi-Family Residential Building,” or “Sale,” means any of the following:

(1) The transfer, in exchange for money or any other thing of economic value, of a present interest in the Multi-Family Residential Building, including beneficial use, where the value of the present interest is the Fee Interest in the Multi-Family Residential Building, or substantially equal to the value of that Fee Interest;

(2) If an interest in the Multi-Family Residential Building is held by a trust, the transfer, in exchange for money or any other thing of economic value, of a beneficial interest in the trust, where the value of the beneficial interest in the trust is substantially equal to the value of the Fee Interest of the Multi-Family Residential Building; or

(3) If an interest substantially equal to the value of the Fee Interest of the Multi-Family Residential Building is held by any kind of corporate entity or partnership (including, but not limited to, a corporation, limited liability company, general partnership, limited partnership, or limited liability partnership), and if that interest is substantially equal in value to the total value of assets held by the corporate entity or partnership, the transfer, in exchange for money or any other thing of economic value, of a controlling interest in the corporate entity or partnership.

(b) Multiple Owners. For purposes of this Section 41B.3, in any instance in which multiple entities (whether those entities are natural persons, trusts, corporate entities, partnerships, or any other kind of entity, or any combination of different kinds of entities) hold interests in a Multi-Family Residential Building, the transfer of multiple interests by or in those entities shall be considered the transfer of a single interest, if the transfers are made in connection with substantially the same transaction or set of transactions.

(c) Exclusions. Notwithstanding subsections (a) and (b), “Sale of a Multi-Family Residential Building,” or “Sale,” does not include any of the following:

(1) Any transfer made under a mortgage, deed of trust, or deed in lieu of foreclosure;

(2) Any transfer made in connection with any bankruptcy proceeding (including, but not limited to, any transfer made by a bankruptcy trustee);

(3) Any transfer of an interest in real property held by the Federal government, by the State government, or by any special district created by State law (including, but not limited to, any transfer of any such interest held because of a taxpayer’s nonpayment of tax);

(4) Any transfer by devise or intestacy, or any other transfer made in connection with a bona fide effort to pass an interest in real property to one’s devisees or heirs (including, but not limited to, such transfers made in connection with a living trust); or

(5) Any transfer between or among spouses, domestic partners, siblings (including, but not limited to, half-siblings, step-siblings, and adoptive siblings), parents (including, but not limited to, step-parents and adoptive parents) or guardians and their children, grandparents and their grandchildren, aunts or uncles and their nieces or nephews, great-aunts or great-uncles and their grand-nieces or grand-nephews, or first or second cousins, or any combination thereof.

(6) Any transfer of an interest in a Multi-Family Residential Building income-restricted at or below an average of 80% of Area Median Income for a minimum of 10 years, if such transfer is to an entity controlled by a California public benefit corporation, and that entity also participates in the management, direction, or control of the Building.

(Added by Ord. , File No. 181212, App. 5/3/2019, Eff. 6/3/2019)