Selling an LA Apartment BuildingA guide by Shaya Lowenstein, Lyon Stahl Investment Real Estate Call (323) 944-2221

For owners of apartment buildings in Los Angeles

Selling a building under the Los Angeles soft-story retrofit program

The City's soft-story ordinance reaches wood-frame buildings of two or more stories with parking or other open space on the ground floor, built under codes enacted before January 1, 1978, other than residential buildings of three or fewer units. An owner served with an order has 2 years to file proof or plans, 3.5 years to get a permit and 7 years to finish, and a sale leaves the order with the building.

On this page
  1. Which buildings does the ordinance cover?
  2. What does the order require, and by when?
  3. How do you check where your building stands?
  4. How much of the cost can come back from RSO tenants?
  5. What will a buyer ask for?
  • Ordinance 183893 covers wood-frame buildings of two or more stories with parking or similar open space on the ground floor, built under codes enacted before January 1, 1978, except residential buildings of three or fewer units.
  • From the day LADBS serves the order, the owner has 2 years to file proof of an earlier retrofit or plans, 3.5 years to get a permit, and 7 years to finish the work.
  • LADBS keeps the inventory of covered buildings, and its building records show the permits pulled against yours.
  • In an RSO building, LAHD can approve passing up to half the cost to tenants, at no more than $38 a unit each month for 120 months, once the Tenant Habitability Program is done.
  • The order belongs to the building, so a buyer takes over whatever stage you reached and will ask for the file that proves it.

The City of Los Angeles soft-story ordinance applies if your building is wood frame, has two or more stories with parking or other open space under the upper floors, was built under codes enacted before January 1, 1978, and holds more than three units. Its deadlines run from the day LADBS serves you an order to comply. A sale does not stop that clock, so a buyer will want to see exactly where the building stands on it.

A building in Santa Monica or Long Beach answers to that city's own rules, if it has any. What follows is the City of Los Angeles program only.

Which buildings does the ordinance cover?

The City Council adopted Ordinance 183893 on October 9, 2015, setting mandatory earthquake standards for existing wood-frame buildings with soft, weak or open-front walls, and a second set for non-ductile concrete buildings, according to LAHD's seismic retrofit page. The LADBS soft-story program page sets out the wood-frame target. It is a building of at least two stories, put up under building code standards enacted before January 1, 1978, whose ground floor holds parking or other open floor space of that kind. The program leaves out residential buildings with three units or fewer.

Soft here means the ground floor. The familiar case is parking tucked under the units, where the ground floor is more opening than wall. LADBS says its mandatory retrofit programs exist to improve how these buildings perform in earthquakes.

The code date and the RSO's date sit nine months apart. The Rent Stabilization Ordinance covers units with a certificate of occupancy issued on or before October 1, 1978, so a building old enough for this program is often old enough for rent control as well, and LAHD's RSO property search will tell you whether yours is. In a building under both, LAHD's cost recovery program decides how much of the bill tenants can share.

What does the order require, and by when?

Every deadline runs from the service date of the order to comply, and LADBS sets three of them:

Time after the order is servedWhat LADBS requires
2 yearsProof of a previous retrofit, or plans to retrofit or demolish
3.5 yearsA permit to start construction or demolition
7 yearsConstruction or demolition finished

Take an order served on June 1, 2020, a made-up date. Proof or plans were due by June 1, 2022, the permit by December 1, 2023, and the finished work by June 1, 2027. A building on that schedule and listed for sale in 2026 should already have its permit, and the question every buyer will ask is how much of the construction is left.

For questions about a specific order, LADBS lists the program office at 201 N. Figueroa St, 8th floor, Suite 890. Its phone is 213-482-7638, spelled 482-SOFT, and its email is Soft-storyretrofit@lacity.org.

How do you check where your building stands?

  1. Ask LADBS's Custodian of Records for the inventory list of buildings in the program, at 213-482-6770 or LADBS.custodianofrecords@lacity.org. LADBS names that office as the source of the list.
  2. Pull the permits and the certificate of occupancy from LADBS's online building records. If a retrofit permit was issued, it is part of the building's permit record there.
  3. Look at the City's open data portal, which publishes LADBS datasets titled LADBS Soft Story Permits and Building and Safety Soft-Story Compliance.
  4. Gather your own copies of the order, the approved plans, the permit and the final sign-off into one file, because the buyer will ask for each.

If the records do not match what you believed, such as a retrofit you thought was closed out with no final inspection on file, take it up with LADBS before you list. A buyer's due diligence period is measured in days, and a records problem found inside it becomes a price conversation.

How much of the cost can come back from RSO tenants?

LAHD's Seismic Retrofit Work Cost Recovery Program, in effect since February 12, 2016, lets the owner of a rent-stabilized building ask for a temporary rent surcharge. Nothing is charged until LAHD approves it. An approved surcharge passes through up to 50 percent of the total retrofit cost, divided equally among all the rental units, at no more than $38 a month per unit for 120 months. LAHD says the recovery period may be extended until the full approved amount is collected. The owner files through LAHD's online application, which runs the formula, and has to complete the Tenant Habitability Program requirements before using it.

On made-up numbers, a $120,000 retrofit on a 10-unit RSO building gives a tenant share of $60,000, or $6,000 a unit. Spread over 120 months that would be $50 a month, above the $38 cap, so each unit pays $38 and the 120 months bring in $4,560. The remaining $1,440 a unit takes another 38 months, the last one partial, if LAHD extends the period, for 158 months in all. The other $60,000 stays with the owner from the start.

Keep LAHD's approval and the record of what has been collected in the sale file. A buyer will want to see both, and to know how much of the approved amount is still to come.

What will a buyer ask for?

LADBS defines the program's scope by how a building was built, and it counts the deadlines from the day the order was served, so nothing in the program as LADBS describes it ends or restarts when the building changes hands. The order stays with the building, and the buyer takes it over with the deed. Expect to be asked for:

  • The order to comply, with its service date, or the proof of an earlier retrofit that you submitted to LADBS.
  • The approved plans and the engineer who drew them.
  • The permit, and the final inspection if the work is complete.
  • If the work is open, where it stands against the 3.5-year and 7-year deadlines, and the contract and budget for what remains.
  • Any LAHD cost recovery approval and the Tenant Habitability Program filings behind it.

Those papers sit alongside the rest of the records a buyer reviews. Whether unfinished work should be priced, credited at closing or finished before escrow closes is a term to negotiate, and how the purchase agreement words it is a question for a real estate attorney. Shaya is a real estate agent, not a lawyer, and his part is telling you what the file will mean to the buyers reading it.

Questions sellers ask

Can I sell my building before the soft-story retrofit is done?

The program has no rule tied to a sale. Its deadlines run from the day LADBS served the order, so the buyer takes over the building at whatever stage you reached, and will want the order, the plans and the permit to see how much time is left.

Which buildings need a soft-story retrofit in Los Angeles?

In the City of LA, wood-frame buildings of two or more stories with parking or other open space on the ground floor, built under codes enacted before 1978. Residential buildings with three or fewer units are exempt.

How long do I have to finish a soft-story retrofit?

Seven years from the date the order to comply was served. Along the way, proof of an earlier retrofit or plans are due at two years, and a permit at three and a half.

Can I pass soft-story retrofit costs on to RSO tenants?

Up to half of them, if LAHD approves, as a temporary surcharge split evenly across the rental units and capped at $38 a unit per month for 120 months. LAHD can extend the period until the approved amount is paid, and the Tenant Habitability Program has to be finished first.

How do I find out if my building is on the soft-story list?

LADBS sends requests for its inventory list to the Custodian of Records, at 213-482-6770. The building's permit history on LADBS's online records will also show any retrofit permit that was issued.

Straight to Shaya

Talk to Shaya about selling your building

Tell Shaya about the building and where you are in the decision. He will call or email you back to talk about price, timing and the steps that apply to your property.

Rather talk now? Call or text (323) 944-2221Or email shaya@lyonstahl.com
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Shaya Lowenstein

About Shaya Lowenstein

Multifamily Real Estate Advisor · Lyon Stahl Investment Real Estate · CA DRE #01942326

Shaya Lowenstein has worked in real estate since 2011, across brokerage, operations and development. His practice is apartment buildings and land in Southern California: repositioning and value-add work, land use and zoning analysis, and long-range planning for owners, investors and developers.

Shaya is a licensed real estate agent. He is not an attorney or a tax advisor, and nothing on this site is legal or tax advice. When a decision turns on the law or on your taxes, talk to a California attorney or a CPA. How this guide is researched and kept current.

830 S Pacific Coast Hwy, Suite D-200, El Segundo, CA 90245(323) 944-2221shaya@lyonstahl.com