TORCA Conversions, Every Always Wants To Know What This Means

In case you were wondering, TORCA stands for Tenant Ownership Rights Charter Amendment. If a condominium or townhouse property is a TORCA conversion and is tenant occupied by the original tenant, you may not be able to get rid of the tenant unless they leave of their own free-will.

Back in the mid-1980's local landlords were able to get the City to allow conversions of their apartment buildings to condominiums. Many landlords appreciated this because the strict Santa Monica Rent Control laws made it an often unprofitable experience for these property owners. Under this agreement the landlords had to offer the properties for sale first to the tenants. If the tenants declined to make the purchase they were allowed to stay in the unit indefinitely. One of the reasons why there are so many TORCA conversions with tenants still occupying the property is because the city allowed these original tenants to also keep the old antiquated Santa Monica Rent Control. This older version is similar to what they have in New York City, where the tenants pay an exceptionally low rent in comparison with what the market will allow for.

A TORCA property can be sold by an owner even if it is occupied by the original rent control tenant. However, the new owner wil be subject to the same laws that governed the ownership by the previous owner and will not be able to get the old tenant out unless they leave of their own free will. For many of these long-term tenants, their rent controlled home is the only thing in their lives that give them a feeling of security. It is often a very serious part of their identity. Because of this, many of them, even when offered tens of thousands of dollars, will not leave.

If you are considering buying a property with a TORCA tenant, you may want to make it a contingency of the sale that it is delivered vacant of the tenant.

Please note that the new Santa Monica Rent Control is very similar to what you find in the rest of the City of Los Angeles, and is not something to be terribly worried about. Additionally, a TORCA conversion that is tenant occupied, but not by the original tenant, from the conversion period, is not under the same rules and regulations. There is nothing wrong with buying a TORCA conversion if you don't have the orginal tenant. In fact, about 80% of the properties in Santa Monica under $700,000 are TORCA conversions and are virtually free of any major encumberances.