Question 1: I would like to sell my rental property. I have a tenant with a month to month lease agreement. How do I legally inform her that I plan to sell the property and she needs to vacate by a certain date? What time frame do I need to give her to vacate?
Also, I’m in a rent control area. If the rent she pays is below the area standard can I raise it up to the area standard or is there a limit I can raise it per year?
Answer 1: You may not terminate a tenancy covered by rent/eviction control without one of the ‘just cause’ grounds provided under the applicable ordinance. Selling the property is not one of the specified grounds. You can simply market the property with the tenant in possession, or you can attempt to negotiate a deal with the tenant by which the tenant agrees to move out, usually in exchange for compensation (money). However, it is recommended you consult an attorney or realtor familiar with this process before contacting the tenant.

If the rental unit is a single family home as you indicate, and the current tenants moved in after 1996, you may be able to raise the rent to market rate under the state law known as “Costa Hawkins.” However, there are some restrictions on that right, such as how the prior tenancy ended, so you may want to get a legal opinion on that effort as well.

Generally, you have a valuable asset, and it is usually worth seeking competent guidance to make sure you are maximizing your asset (and minimizing your risks) by proceeding knowledgably.

 

Question 2: A tenant who is on month-to-month lease has given us her notice to move out. She gave notice on Feb. 9th and moved out on Feb. 25th. Are we entitled to deduct nine days of rent in March from her security deposit since she had not given a proper full 30 days notice?
Answer 2: Based on your statement of facts, yes, you are. Unless the lease provides for a shorter or longer period, the tenant can terminate her tenancy on 30 days notice. On your description, the tenant is obligated for payment of rent for 30 days from her notice to terminate, or through March 11 – the 30 days of her notice of termination. You are allowed to deduct from the security deposit unpaid rent. You have 21 days from the date the tenant vacated to account for the deposit. However, she may be able to argue that you could have gotten a new tenant in place by March 1, and under the mitigation of damages rule, are therefore not entitled to rent for that March period. But that is a question of fact based on the circumstances, which may come into play if she seeks a small claims case for return of the deposit.  

Question 3: We have a month-to-month tenant who has stopped paying rent. She sublet without our permission and against the rules of her lease, and the sub-lessee left. Our tenant with whom we have the lease is unable to be reached, except via e-mail, and says she is “in China.” She says she will return at end of April to get her possessions out of the apartment, including a piano, but cannot return until then, due to her student visa.
We can’t wait until April to see if she shows up! Is there any way we can empty and re- rent the apartment without getting a court order of eviction, which we can’t mail to her anyway, since she will give us no forwarding address?
Answer 3: If the tenant has not paid the rent for a total of at least 14 days, as it sounds like in your case, and you cannot get the tenant’s cooperation, you might be able to serve a Notice of Belief of Abandonment, though since you are in contact with the tenant via email, and she has stated her intent to retrieve her possessions, that option may not be available. If not, you would need to go through the unlawful detainer nonpayment of rent process, which is a bit costly and time consuming. Ideally, you would contact her and get her express permission to retake possession of the premises – on her declaration that no one else has a right to possession or is in possession – and then store her belongings until she returns (at her expense).

My suggestion is to let her know it will be better for all concerned if she agrees to terminate her tenancy effective immediately, and you will store her possessions until ‘x’ date, or dispose of them according to law if she has not made arrangements by that date to recover them and pay the storage fees.

It’s potentially a tricky situation, so you may want to retain counsel to guide you through it if the above seems overly complicated. But again, with her cooperation, you can likely take care of it without such assistance, but be careful regarding the storage of her possessions as she could have a claim against you if you mishandle the obligation to care for those possessions until they are returned to her or disposed of according to applicable law.

Question 4: I have a commercial (retail) tenant who is demanding that I pay him thousands of dollars because I cannot produce a Certificate of Occupancy (CO) for this unit (building was built in 1951). My understanding is that CO’s are not required in commercial properties. The tenant is late with his February rent and is in default on two of the terms in his lease agreement so I’ve proceeded to hire a process server to serve him a 3-day Notice to Perform or Quit, followed by an unlawful detainer lawsuit. Please advise on the CO issue?
Answer 4: There are very few defenses to a commercial nonpayment case, so if you elect to file that action, you are more likely than not going to be successful. Whether the tenant has an independent claim for rent refund based on his argument is unknown, but he would have to bring it as a separate lawsuit, as such claims are not permitted in the eviction action. If your lease obligates you to provide a building in compliance with all applicable laws (which may be implied, and the lease may have an applicable provision), then he may be entitled to argue that you are in breach of such obligation, but would 1) have to prove it and 2) have to demonstrate how it caused him any harm (seems unlikely). And realistically, the chances of him suing separately would depend on the amounts and the strength of the claim, so that would be up to him to determine.

Here is an excerpt from the Berkeley Planning Department on that city’s certificate of occupancy rules: A Certificate of Occupancy represents the completion of a construction project, and that the building is ready for occupancy. Prior to January 1, 2011 single-family residential dwellings did not require Certificates of Occupancy. Currently Certificates of Occupancy are required for all new residential and commercial properties. In addition, new Certificates of Occupancy are required whenever there is a change of use, or change of occupancy for a building. (i.e. Change from residential to commercial.) 

Question 5: I am trying to determine the classification for a property that I am managing for a client. It is a single residential unit over a single commercial unit. As far as I know, they are not mapped as separate condos and are owned by a single entity. The main issues at hand are surrounding rent control. Since it is not multiple residential units, would it be considered a single family home?
Answer 5: That’s a good question.  Reviewing the state law known as Costa Hawkins and its local interpretation in the SF Rent Ordinance, I read the following language as meaning your client’s residential unit is subject to the Costa Hawkins exemption from local rent control: “An owner of residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit which is alienable separate from the title to any other dwelling unit…”

However, you can always run it by one of the Rent Board’s administrative law judges and make sure they agree. If they do, that should be pretty conclusive. If they don’t, then you might want to commission a binding legal opinion for your client. 

Question 6: What recourse do we have if our San Francisco tenant is constantly late with his rent? Rent is due on the 1st with a five day grace period. He sends his checks registered receipt but we don’t get it until the 7th or after. We’ve sent several letters telling him to include a late fee with the next month’s rent but he ignores us then we have to take it out of his security deposit.
We’ve asked him to use banking online but he probably doesn’t have the rent money by the 5th and therefore doesn’t send his check on time.
We’ve asked him several times to pay back the security deposit so the security deposit is brought back to its original amount. He also ignores us. It has become a nuisance having to write him letters every month.
Answer 6: If you are familiar with the San Francisco rent ordinance (as you should be, at least to some degree), consistent late rent payments from the tenant is a ‘just cause’ ground to terminate a tenancy. It is not a well defined line as to when the number or degree of lateness justifies terminating the tenancy, and it’s very much a ‘case by case’ analysis (depends on length of tenancy, history of payments, recent disputes between the parties, all of which can affect the perception of the landlord’s ‘dominant motive.’) I typically suggest a very clear warning letter that rent is due when it’s due, and any further late payments will be ‘just cause’ under the applicable rent ordinance section to terminate the tenancy and suggest the tenant consult with the rent board or a lawyer about their rights, etc. Invite the tenant to provide any explanation they think excuses their late payments. And then, if the tenant continues the late payments, you should be in pretty good shape (absent some unusual facts) to take action. But I would also seek the opinion of an attorney knowledgeable in this area before proceeding in terminating the tenancy.
 

Question 7: Can I call the police when my tenant’s guests smoke marijuana inside the apartment every day? 
Answer 7: I don’t think there is any law against calling the police to report behavior you believe to be criminal. But if the tenant or his guest has a prescription for medical marijuana, it’s not against the law to smoke it, though it may be against the lease terms – (which is a whole other issue, and likely the avenue you would pursue if you feel such behavior is in violation of the lease).  

Question 8:  I have a tenant who has given us a 30 day notice to move out, stating they have been discriminated against and harassed. Prior to sending their notice, they had called asking us to replace their carpet. These people are filthy and we were actually going to ask them to leave due to the same. Should we reply to their 30 day notice other than the standard process?
Answer 8: If the tenants have given written 30 day notice of termination of their tenancy and intent to vacate, and that falls in line with your own goals, then what could be better? If they elect to sue over claims of discrimination and harassment, at least they won’t be able to claim you terminated their tenancy on those grounds. Just accept their notice and follow the standard process regarding pre-move out inspection and return of any security deposit, all as set forth in Civil Code Section 1950.5. And you might want to check with your agent to make sure your insurance includes coverage for housing claims. 

Richard Beckman, of Beckman Blair, LLP has been practicing landlord-tenant law for over 19 years, primarily in rent-controlled jurisdictions such as San FranciscoOakland and Berkeley. He represents clients in a broad range of real estate-related disputes, including partition of co-ownership interests, purchase contract disputes, insurance coverage analysis and land use. Mr. Beckman also specializes in all aspects of landlord-tenant issues, representing landlords and tenants in residential and commercial matters. He can be reached at 415-871-0070; email rich@beckmanblairllp.com or by visiting the website www.beckmanblairllp.com