The Ninth Circuit upheld dismissal of a takings claim as unripe because plaintiffs did not seek a timely exemption from the City’s requirements for conversion of property into condominium ownership. Pakdel v. City and County of San Francisco, No. 17-17504 (9th Cir., March 17, 2020).
The City of San Francisco allows conversion of property owned as a tenancy-in-common to condominium ownership on condition that the owner agree to offer any existing tenants lifetime leases in units within the converted property. Plaintiffs purchased an interest in a tenancy-in-common property and rented their portion of the property to a tenant. When they later applied to convert their property to condominium ownership, plaintiffs initially agreed to offer their tenant a lifetime lease as a condition of receiving final conversion approval from the City. In November 2016, they signed an agreement with the City committing to offer the lifetime lease and specifically “covenant[ed] and agree[d] that [they] w[ould] not seek a waiver of the provisions of the [applicable ordinance] after that stage of the approval process.” In exchange, plaintiffs sought and received a partial refund of the permit conversion application fee.
Plaintiffs’ final conversion map was approved in December 2016. Six months later, they requested that the City either not require them to execute the lifetime lease or compensate them for the value of the lease interest. When the City refused to do either, plaintiffs sued, contending that the lifetime lease requirement violated the Takings Clause of the Fifth Amendment.
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