Residential rental units built before March 1979 are subject to both rent control and eviction protection under the San Francisco Rent Ordinance. Under rent control, rent increases are strictly limited under guidelines published by the San Francisco Rent Board. In general, a tenant's rent may only be increased once each year by a percentage equal to 60% of the Bay Area Cost of Living Index. In 2010, the permitted annual increase is only .010% (one-tenth of one percent). However, if the unit is turned over to new tenants the rent may be established at full market value. Landlords may also petition the Rent Board to obtain rent increases based upon capital improvement expenses and increased operating and maintenance expenses.
Under eviction protection, tenants may only be evicted if the landlord can establish "just cause" under the Rent Ordinance. Just cause may be established based upon tenant's default under the rental contract or misconduct, or based upon the landlord's need to recover the unit for personal reasons including owner-occupancy. There are fifteen "just cause" grounds for eviction under the Rent Ordinance.
Rental units that were built after March 1979 are exempt from both rent control and eviction control. The legislative policy has been to encourage construction of new residential units by exempting them from such controls.
Single Family Dwelling Exemption From Rent Control
Under a California law called the Costa Hawkins Rental Housing Act, single family dwellings, including most condominiums, are exempt from rent control if the tenancy commenced after 1995. The California law overrides any contrary provisions of San Francisco ordinances. Single family dwellings built after March 1979 are exempt from rent control and eviction protection. Units that have been converted to condominiums are exempt from rent control and eviction control if the unit has been sold after it was converted, or if it was the only unit in the building retained by the developer and rented at least one year after it was converted.
Due to the interplay of the Costa Hawkins Act and the San Francisco Rent Ordinance, single family dwellings that were built before March 1979 with tenancies that commenced after 1996 are subject to eviction protection but exempt from rent control. Thus, the landlord can raise the rent to any level but must have just cause under the Rent Ordinance to evict a tenant.
Just Cause Eviction Under The San Francisco Rent Ordinance
All rental units built before March 1979 are subject to eviction controls. A landlord may lawfully evict a tenant from a residential unit based upon one or more of 15 "just causes" enumerated in section 37.9(a) of the Rent Ordinance, which fall into two general categories, tenant causes and landlord causes. Tenant causes include tenant defaults such as non-payment of rent and other breaches of the rental contract. Landlord causes include owner occupancy, occupancy by the landlord's close relatives, and remodeling or demolishing the unit. Eviction proceedings are commenced by serving written notice to the tenant. The eviction notice must state the grounds for eviction under the Rent Ordinance "just cause" provisions and must inform the tenant that advice can be obtained at the San Francisco Rent Board. Depending upon the legal basis of the eviction, the notice used may be a 3-Day Notice, a 30-Day Notice, a 60-Day Notice or a 120-Day Notice.
How long does it take to evict a tenant?
The legal process to evict a tenant involves several procedural steps and can take as little as four weeks to up to six months, depending upon the type of legal notice given to the tenant, the speed in serving the tenant with the eviction lawsuit, and whether the tenant fights the lawsuit or not. The landlord is obligated to strictly comply with procedural requirements beginning with drafting and serving a legal eviction notice to the tenant. If the landlord does not comply with each requirement, the eviction may be delayed by weeks or months. Advice from an experienced attorney can assure such compliance and prevent any unnecessary delays.
Evictions And Condominium Conversion
Most rental housing in San Francisco consists of older buildings comprised of 2 to 4 rental units, typically Victorian, Edwardian or Marina-style flats. In many instances, groups of property owners purchase tenancy-in-common interests in such multi-unit buildings with the intent to owner-occupy each of the units and convert the units to condominiums through a legal subdivision. Condominium conversions are limited by law to buildings with no more than six units. Each year, 200 units are selected by lottery from a large pool of applicants as potential condominium conversions. The odds are against entrants winning the lottery until they have entered each year for at least six years, because lottery entrants are given an additional lottery ticket for each year they have entered the lottery. Two unit buildings wherein both units have been owner-occupied for at least one year may be converted to condominiums without first entering and winning the lottery. However, the Department of Public Works will not allow condominium conversion of buildings which have had two or more evictions from separate units that were not based upon tenant default under the rental contract or other tenant misconduct,("two evictions rule") or if a protected tenant (over 60 years of age, disabled or catastrophically ill) and the eviction was not based upon tenant default or misconduct ("one bad eviction rule"). Evictions based on tenant fault and evictions that occurred before 1995 will not disqualify condo-conversion applicants.
Evictions Based Upon Tenant Fault May Proceed Despite Tenant's Protected Status
If the cause for eviction is the tenant's fault, such as non-payment of rent, the eviction process may proceed notwithstanding the tenant's protected status based upon age, disability, illness. In contrast, if the eviction is based upon the landlord's choice, such as owner-occupancy or to renovate the unit, the landlord must pay the tenant monetary relocation assistance and, in certain instances, the eviction may not proceed if the tenant is a senior, disabled, catastrophically ill. If there are school-aged children in the home, evictions based upon owner-occupancy or occupancy by the owner's relative may only occur during the summer school break.
Eviction For Non-Payment Or Late Payment Of Rent
The tenant may evicted for failing to pay the lawful rent when due. If the tenant has failed to pay rent, the landlord may serve the tenant with a 3-Day Notice to Pay Rent or Quit. If the tenant fails to pay the rent or vacate the unit within 3 days, the landlord may bring a lawsuit for unlawful detainer and seek a court-ordered eviction. Unlawful detainer is the type of lawsuit that is used most often to obtain an eviction order because the issues to be determined by the court are limited and the case will proceed quickly. By law, unlawful detainer cases are entitled to priority on the court's calendar so that delays are minimized.
The 3-Day Notice must state the correct amount of rent due. It is important to review the rent increases imposed from the inception of the tenancy to assure compliance with the rent increase limits under the Rent Ordinance, if applicable. If any rent increase was illegally high, the excess amount paid may have to be refunded.
The 3-Day Notice may not demand rent that became due more than one year before the date of the 3-Day Notice.
The tenant may be evicted for habitually paying the rent late or with checks drawn against insufficient funds. Since the eviction ground is based upon past defaults and not an immediate breach of the lease that could be cured within three days, the tenant must be served with a 60-day notice of termination of tenancy, unless the tenancy is less than 12 months old, in which case a 30-day notice is sufficient.
"Habitually Late" Rent Payments
"Habitually late" is not defined in the Rent Ordinance. Therefore, whether the rent has been paid habitually late may be subject to interpretation in court by a judge or jury. We recommend that the rental contract should define "habitually late." The parties may agree in the rental contract that the rent is considered late if paid after the due date and habitually late if it is paid after the due date more than a certain number of months (e.g. three late payments during a twelve-month period).
Most rental contracts provide that the tenant must pay an additional charge if the rent is paid late, usually from 5% to 10%. Late charges are not rent and may not be demanded in a 3-Day Notice to Pay Rent or Quit, unless the rental contract defines late charges as additional rent. If not, then late charges may be demanded in a 3-Day Notice to Cure Breach of Covenant or Quit.
Breach Of Rental Contract
A tenant may be evicted based upon a serious breach of the rental contract, for example, subletting the unit without the landlord's consent required under the terms of the contract. The landlord may require the tenant to cure the breach or vacate the unit by serving a 3-Day Notice to Cure Breach of Covenant or Quit. A 3-Day Notice must identify the provisions of the rental contract that the tenant has breached so that the manner to cure the breach will be apparent. The Notice must also state the grounds under the Rent Ordinance upon which the Notice is based, and inform the tenant that advice can be obtained from the Rent Board. If the tenant corrects the problem (cures the breach) within three days after the notice is served, the tenant may retain the tenancy and avoid eviction.
Although a landlord may change the terms of the rental contract by giving a 30-day notice, under Rent Board rules, the landlord may not enforce the changed terms with an eviction notice unless the tenant has agreed to the change. Thus, a landlord may not unilaterally change the terms of a contract in order to create grounds to evict the tenant. However, if both sides have agreed to the changed terms, the new terms may be enforced by a 3-Day Notice. If the tenant has not agreed to the changed terms, then the landlord may not use the eviction process to enforce the changed terms but may have other legal remedies, such as a lawsuit for breach of contract.
A tenant may be evicted for creating a nuisance such as excessive noise, creating an unhealthy condition, like accumulating trash, or an unsafe condition such as obstructing fire exits. Any condition that is injurious, unhealthy or unreasonably disturbs the quiet enjoyment of other tenants in the building may be considered a nuisance. The tenant creating a nuisance may be caused to vacate with a 3-Day Notice to Quit (with no option to cure and remain in possession), followed by an unlawful detainer (eviction) lawsuit. The nature of the nuisance must be specifically stated within the 3-Day Notice. A copy of the Notice must be delivered to the Rent Board. Unless the nuisance is a true emergency, it is recommended that the landlord attempt to gain the tenant's cooperation by writing to the tenant, before using the 3-Day Notice alternative.
A tenant may be evicted for serious and/or repeated criminal activities conducted from the unit. For example, drug dealers and prostitutes may be evicted by serving a 3-Day Notice to Quit followed by an unlawful detainer lawsuit. The illegal activity must be serious and involve the tenant's possession of the unit. It is questionable that marijuana use would be considered serious enough to justify an eviction, unless other tenants in the building are materially disturbed. However, possession of hard drugs or drug dealing would certainly be considered serious illegal activities.
A tenant who has acted as a violent aggressor against another tenant may be evicted under the nuisance guidelines, above. However, a victim of domestic violence who has obtained a restraining order against the aggressor may not be evicted. If two occupants of the same unit both obtain restraining orders against each other, the court will make a determination as to which of them was the aggressor and subject to eviction.
Failure To Sign A New Lease
A tenant may be evicted if the tenant refuses to renew a lease for the same duration and on substantially the same terms as the original lease. This ground for eviction is seldom utilized because most landlords allow the lease to renew on a month-to-month basis after the initial one-year term expires. Since the price-controlled rent is usually lower than market rent after the first year of the tenancy the landlord does not want to tie the tenant down to a lengthy lease term. The landlord will be allowed to raise the rent to market rent when the unit turns over to new tenants.
Refusal To Allow The Landlord Lawful Access To Unit
A tenant may be evicted for refusing to allow the landlord to enter under the conditions imposed by Civil Code Section 1954 "Landlord's Right to Enter Rental Dwelling" A landlord may enter after giving adequate advance notice in order to exhibit the unit to prospective buyers, lenders, tenants or workers, to effectuate necessary or agreed upon repairs, or without notice in emergencies or to determine if the unit has been abandoned. Entry may be made during regular business hours. If the tenant refuses to allow notice after proper notice is given based upon one of the provided reasons, then the tenant may be given an eviction notice.
Evictions Based Upon Landlord Choice
Evictions based upon landlord choice, as opposed to tenant's fault, are subject to greater restrictions. The landlord must serve a 60-day notice and pay each tenant relocation assistance of about $5000 each, an amount that increases each year with inflation. The landlord must also make greater disclosures in order to support the grounds for eviction. In some instances, the landlord will be prevented from evicting the tenant if there is another vacant unit available or if the tenant is "protected" based upon age, disability, catastrophic illness, or if there are children in school in the home. These eviction cases are subject to scrutiny to assure the landlord's good faith.
Evictions based upon the owner's intent to sell a unit after a condominium conversion are subject to other rules under the Subdivision Code. Tenants evicted under these rules are entitled to relocation assistance including moving expenses of $1000.
Owner Move In ["OMI"]
Landlords may ask tenants to vacate in order to occupy the dwelling as a primary residence. The landlord must have a minimum 25% ownership in the property and must have the intent to reside there for at least three years. The landlord may not evict the tenant under the OMI provisions if there is a comparable vacant unit available. The landlord may not evict protected tenants (seniors, disabled, catastrophically ill, or with children in school) unless the dwelling is the only dwelling owned by the landlord in the building, or if the landlord is also senior or disabled. The landlord must use a 60-Day Notice to terminate the tenancy, unless the tenant has resided in the unit for less than one year, in which case, a 30-Day Notice is sufficient. The Notice must contain numerous disclosures and explanations of tenant's rights under the Rent Ordinance. The landlord must also pay each tenant monetary relocation assistance in the amount specified by the Ordinance (currently over $5000 each). Additional payments must be made if the tenants are protected or if there are children in the home.
Owner Relative Move In ["ORMI"]
Landlords may ask tenants to vacate in order to provide a primary residence for a close family member, provided that the landlord already lives in the building or is moving in at the same time. The landlord must have a minimum 25% ownership in the property and the relative who will move in must have the intent to reside there for at least three years. The landlord may not evict the tenant under the ORMI provisions if there is a comparable vacant unit available. The landlord may not evict protected tenants (seniors, disabled, catastrophically ill, or with children in school) unless the relative who will move in is also senior or disabled. The landlord must use a 60-Day Notice to terminate the tenancy, unless the tenant has resided in the unit for less than one year, in which case, a 30-Day Notice is sufficient. The Notice must contain numerous disclosures and explanations of tenant's rights under the Rent Ordinance. The landlord must also pay each tenant monetary relocation assistance in the amount specified by the Ordinance (currently over $5000 each). Additional payments must be made if the tenants are protected or if there are children in the home.
Renovating The Unit
Landlords may ask tenants to temporarily vacate the unit in order to carry out renovations or substantial rehabilitation. Prior to serving a 60-Day Notice to Vacate, the landlord must obtain all necessary building permits. The landlord is obligated to complete the work within 90 days and then to offer the unit for reoccupancy by the tenants at the same rent. In addition, the landlord must pay each tenant relocation assistance in the amount specified under the Ordinance (currently over $5000 each).
Landlords may ask tenants to permanently vacate the unit if it is to be demolished and permanently removed from housing use. Prior to serving a 60-Day Notice to Vacate, the landlord must obtain all necessary building permits. In addition, the landlord must pay each tenant relocation assistance in the amount specified under the Ordinance (currently over $5000 each). This ground is often utilized in order to remove units built without permits or in-law units.
Exiting The Rental Market Under The Ellis Act
A landlord may ask all of the tenants of a residential building to permanently vacate so that the landlord may exit the rental market under a California law know as the Ellis Act. Under the Ellis Act, the building is converted from rental housing to owner-utilized housing. The law contemplates that the building will not be rented again for at least five years. If any of the units are rented again during the five-year period, they must be offered back to the departed tenants at the same rent. If the tenants do not reoccupy, then they may be rented to new tenants, but at the same rent that was paid by the departed tenants at the time the units were first removed from the rental market, adjusted under the inflation guidelines. If the units are rented after five years, they may be rented at full market value. This ground has often been utilized to convert rental housing to owner-occupied housing. Tenants are entitled to 120 days notice and monetary relocation assistance. If the tenant is protected, the tenant may request up to one year to vacate. The legal procedural process for an Ellis case is more complex, but if the procedures are followed the tenants have no defense.
Tenants may be asked to vacate after the owner has completed a condominium conversion so that the unit may be sold vacant. The Subdivision Code governs how such evictions may occur. Senior tenants are protected from eviction. Other tenants are entitled to relocation assistance including moving expenses of $1000.
Tenant Buy Outs
It may be appropriate for the landlord to offer to relocation assistance in exchange for the tenant vacating the rental unit, thereby avoiding an eviction and any negative impact upon the ability to convert the units to a condominium, or simply to avoid the costs and uncertainties of litigation. Tenants are often receptive to such offers. It is important to remember that the Rent Ordinance prohibits any endeavor to recover possession of a rental unit that does not comply with tenant protection provisions. In other words, a landlord may not threaten to evict in order to leverage a buy-out deal. On the other hand, court decisions have conclusively established that landlords have the constitutional free speech right to negotiate with their tenants. Tenant buy outs should be handled with caution after consulting an attorney and should be documented with care in order to protect both sides.
Foreclosure Is Not A Ground For Tenant Eviction
The sale of a unit including a sale by trustee's sale (foreclosure) is not a ground for a tenant's eviction. The tenancy is protected and the prospective buyer will take the property subject to the tenant's occupancy rights and the provisions of any lease. However, the foreclosed mortgagor is not a tenant subject to the Rent Ordinance, thus the former mortgagor may be evicted under California law without regard to the Rent Ordinance.
Intended Sale Is Not A Ground For Tenant Eviction
The intended sale of a rental unit is not grounds for eviction. The tenancy is protected and prospective buyer will take subject to tenant's occupancy rights and the provisions of any rental contract. After consulting legal counsel it may be appropriate for the seller to negotiate a buy-out of the tenant's occupancy so that the unit may be marketed vacant.