Question 1: Has San Francisco changed its ‘Ellis Act’ relocation payment law again?
Answer 1: Yes. Effective June 15, 2015, tenants evicted under the state law know as the “Ellis Act” will be entitled to receive a relocation payment of up to $50,000.00. The SF Board of Supervisors recently passed, and the Mayor signed, an amendment to the Rent Ordinance to base the relocation payment on the difference between the rent paid by an evicted tenant and market rent for a comparable size unit (rental payment differential). 
 

While a similar effort last year was overturned by a court on constitutional grounds, the Supervisors are trying again, and presumably have incorporated the ‘lessons’ learned in their previous attempt. This amendment requires having the Controller use “reliable market data” to determine the applicable rent payment differential, and to cap relocation payments based on the rental payment differential at $50,000.00. It also requires the tenant to submit to the landlord a sworn statement of intent to use the relocation payment solely for housing or other relocation costs, and to require the tenant to keep proof of expenditures on relocation costs for at least three years after vacating the unit. The tenant must make copies of such proof of expenses available to the landlord within ten business days of a request, and the tenant must reimburse the landlord any portion of the relocation payment not expended on relocation costs within three years after vacating the unit. Whether this new attempt to increase relocation payments to tenants will survive the anticipated legal challenge remains to be seen. 

Question 2: What legal verbiage can I use on my San Francisco leases and rental agreements prohibiting my tenants from listing their units on Airbnb type websites?
Answer 2:The standard subletting/assignment provision in most leases should be sufficient to prohibit Airbnb rentals by your tenants, though it could not hurt to specifically mention a prohibition on such short term rentals. There is nothing that prohibits your tenants from listing their unit on such websites (some people do it out of curiosity, oddly enough), but you can of course prohibit them from actually engaging in such activity (without your express written approval in advance).

Also, as you probably know, San Francisco has passed an ordinance seeking to regulate short term rentals, and any property owner or tenant considering such services should be familiar with that new law. On October 27th, 2014 Mayor Lee signed San Francisco Ordinance No. 218-14, amending the Administrative and Planning Codes to allow some residential properties to conduct short-term residential rentals without violating the requirements of the City’s Residential Unit Conversion and Demolition Ordinance (Administrative Code Chapter 41A) or the Planning Code. A short-term residential rental is a rental of all or a portion of your residential unit for periods of less than 30 nights. This law became effective on February 1st, 2015, allowing eligible Permanent Residents (owners and tenants) to apply to place their residential unit on the Planning Department’s Short-Term Residential Rental Registry. An overview of the law with FAQs can be found at the SF Building Department’s website at http://www.sf-planning.org/index.aspx?page=4004            

 Question 3:    We have an apartment occupied with a father, mother and 35 year-old son. When I serve a 3-day notice to pay rent or quit, do I need to serve all three of them or can I just serve the notice with all three names on it to one person?
Answer 3:  If all three persons are named on the lease, then service on one named tenant is service on all. Otherwise, you would need to serve all three separately, which is typically done by ‘sub- service,’ i.e. an attempt to serve all three personally, but if they are not able to be personally served on the first attempt, leave a copy for each tenant with anyone who responds to the service attempt at the front door, and then mailing a copy addressed to each tenant (if no one answers, the notice is posted at the door and then mailed to each of the tenants). In case it’s not clear, the notice itself should name all three tenants, so you would not need three separate notices. It is only service of the notice that must be done for each individual tenant.
 

Question 4: If I find a potential tenant is a registered sex offender on Meagan’s law database, can I reject that applicant on that basis?
Answer 4: This is an oddity, but if you searched for and found the information about the candidate on the Megan’s law database in response to the application, you may not use it to deny housing to the offender unless it is done “to protect a person at risk”. That phrase is not defined by the law, and I have not found any case law that defines that expression. However, one case implied that the category could include basically any child or family with children if the requested housing would put the registered offender in close proximity to those potentially at-risk persons.

It is odd that there is so little guidance on this issue, but below is an excerpt from the Megan’s Law database website for the summary of the prohibition on using the information provided by the website.

Use of Web Site Information Is Authorized Only to Protect a Person at Risk

A person is authorized to use information disclosed on this web site only to protect a person at risk. Except to protect a person at risk or as authorized under any other law, use of any information disclosed on this web site for purposes relating to any of the following is prohibited:

  • Health insurance
  • Insurance
  • Loans
  • Credit
  • Employment
  • Education, scholarships or fellowships
  • Housing or accommodations
  • Benefits, privileges, or services provided by any business establishment

    Use of information on this web site for purposes other than to protect a person at risk or for a prohibited purpose as described above, shall make the user liable for the actual damages caused, and any amount that may be determined by a jury or a court, not exceeding three times the amount of actual damages, and not less than $250, plus attorney’s fees, exemplary damages, or a civil penalty not exceeding $25,000. (Penal Code § 290.46, subd. (j).)

    Question 5: Can a landlord send a rental increase notice by regular U.S. mail (i.e. non-certified) as long as it is 35 days before the increase date? Also, can we send a copy via email?
    Answer 5: A notice of rent increase can be served either by personal delivery to the tenant or by mailing it first class U.S. post.  And you are correct to note that if the service is by mail, five days must be added to the notice period. See Civil Code Section  827. This is in contrast to notices of termination of tenancies, which must be served like a three day notice (personal service, substitute service or post and mail service, or by certified or registered mail).

    If your rental agreement allows for service of notices by email, it is not clear that such a provision would be effective to supersede the statutory service requirements. In a commercial lease, case law has held email service of notices is acceptable if the lease so provides, but residential leases often are subject to a different analysis, and so, until the case comes out approving service by email, I would suggest sticking to the ‘tried and true’ (statutorily mandated) method of personal service or U.S. postal delivery.

    Question 6:  I noticed that there is a strong trend of apartments now charging for water, garbage, and/or hot water. In fact, I recently visited 8 other large complexes in Sunnyvale and every single one of them charged about $40 per person for this.
    Question 1: If we started doing this at our Sunnyvale apartment units, would this be considered a “rent increase”, such that we would have to give a 60 day notice instead of a 30 day notice if the total rent (increase in rent plus these utilities) increased by more than 10%?
    Question 2: For all people on a lease, would we have to wait until the lease ends and transitions to “month-to-month” before charging for these utilities?
    Answer 6: Any increase in the payment required from the tenant to remain a tenant would be considered a rent increase (possibly excepting an increase in the security deposit). So, as you note, if the increase (to add the cost of a utility or any other reason) exceeds 10%, then a 60 day notice would be required. However, I would separate the two increases into separate notices, as one would be a rent increase and one would likely be a change of terms of tenancy, requiring a separate 30 (or 60) day notice.

    And yes, you may not change the lease terms until the lease ends and transitions to a month-to-month agreement.

    Question 7:  What is the maximum we can increase rent for our Oakland tenants? They have been living there for seven years and we haven’t increased their rent on a yearly basis. They are on a month-to-month basis. It has been over 2 years since we last increased their rent.
    Answer 7: If the unit is subject to the Oakland rent control law, then you are restricted in the increases you can impose on the tenant to the annual percentage based on the consumer price index. This annual amount is posted each year at the Oakland Rent Board’s website (http://www2.oaklandnet.com/Government/o/hcd/o/RentAdjustment/). However, you are allowed to impose ‘banked’ rent increases based on the annual allowable increase for any year in which you did not impose that increase. However, note that the total amount may not exceed 10% in any one year, or 30% in any five year period. You might contact the Oakland rent board and ask for a member to help you calculate the proper amount of increase you may impose.

    Also, as AOA members were recently notified, the original annual increase percentage posted on the rent board’s website was 2.4%. That annual allowable rate increase, however, was later corrected on the Rent Board’s website to reflect what it now states to be the actual (corrected) allowable annual increase effective July 1, 2015, which is 1.7%.

    Question 8: Would it be legal to accept an applicant’s credit application and driver’s license via email to conduct the tenant screening?
    Answer 8:  I know of no restriction on the ability of a landlord and tenant applicant to conduct their application process by email, as long as the tenant applicant’s confidential information is protected from disclosure.

    Richard Beckman, of Beckman Blair, LLP has been practicing landlord-tenant law for over 24 years, primarily in rent-controlled jurisdictions such as San Francisco, Oakland 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