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Commissioner O'Connor inquired who determines what the market rent is for the non low- income households who choose not to purchase a condominium. Mr. Roush replied that under current State law, the park owner makes that determination and that there is no guidance on how this is to be done. He noted that the argument would be that if the price were set so high or over the market rate, the City or residents would be able to go into court to show this is unfair. He noted, however, that it was his understanding that when other owners have converted following this process, they have done it through an appraisal or market survey so there is some basis for the sales price. With respect to the ten -year waiting period and if a condominium conversion is so desirable, Commissioner O'Connor inquired why the sale would not be done immediately or within a shorter period of time after the Department of Real Estate (DRE) report is received. Mr. Dolan replied that staff did not intend to describe it as desirable but is explaining what State law indicates. Mr. Roush stated that the owner felt that, rather than placing the existing residents into a situation in 2009 where the condominium plan would be recorded and lots would begin to be sold and the residents would need to make the decision sooner than later, it was more equitable to existing residents to move that decision out ten years. He noted that there is no requirement that the owner start selling the units in ten years, and he could wait a longer period of time. Commissioner O'Connor inquired if there was any provision in State law regarding mobile home conversions that required a minimum of half the units be sold, as there was in a straight condominium project. Mr. Roush replied that he was not aware if this similar provision applies in this case wherein a certain number of sales must be in escrow before the first sale can be closed. Commissioner O'Connor inquired if, after the first right of refusal 90 -day period, the units of those residents who choose not to purchase their condominium could be offered to anyone else interested in purchasing the right to be the new landlord of that unit. Mr. Roush said no. He added that it was his understanding that the applicant cannot sell the lot out from underneath the person. He deferred the question to the applicant for further explanation. Commissioner Fox requested clarification that although the staff report indicates that the units would become resident -owned in ten years, the owner of the mobile home park is under no obligation to do that and may extend the ten -year period. EXCERPTS: PLANNING COMMISSION MINUTES, February 25, 2009 Page 3 of 19