The San Francisco Rent Ordinance is complex.  Mistakes made at the beginning of a tenancy can haunt you for years, even decades and can negatively affect both your monthly rental income and the value of your property.  Further mistakes can compound a problem. 

Consulting with a lawyer is part of the cost of properly managing residential rental property.  Many property owners only involve a lawyer when something has gone terribly wrong in the landlord-tenant relationship.  At that point, the problem is frequently difficult to solve, given the tangled web of pro-tenant laws and consequently, also expensive.

Many problems in the landlord-tenant relationship can be either prevented or can be solved relatively easily if caught early on.  There are certain decision points which arise over the course of a tenancy at which you will either need to take action or make an informed decision, to avoid certain pitfalls.  There is a lot at risk.  You could be making a huge mistake which could lead you to years of frustration, large attorney fees and potentially, a reduction in the value of your building.

Your property manager should help flag for you the points at which you need to speak to a lawyer.  If you do not have a property manager, here are some of the significant points at which you need the advice of a lawyer to preserve your rights and minimize the risk of future problems. 

Action Points

You need to take action to avoid losing your rights when… 

  • You’re sued or a Rent Board petition is filed against you
  • Your tenant is breaching the lease/rental agreement
  • Your tenant has paid rent late more than once
  • Your tenant is creating a nuisance
  • You’re unsure about the amount of a rent increase you can impose or how to properly impose it
  • Someone other than the tenant named on the lease or rental agreement tries to pay you money, whether denominated as security deposit, rent or otherwise
  • Your tenant requests adding a new tenant, occupant or roommate
  • You find out that there are people living in the unit who are not your tenants or approved subtenants
  • You find out the tenant on your lease is no longer living in your unit
  • You’re cited by the Department of Building Inspection for having an illegal in-law unit 

Decision Points

Know what you’re getting yourself into when… 

  • You’re considering evicting a tenant for any reason
  • You’re considering renting out a vacant in-law unit (renting an illegal in-law unit in a single- family home places the entire property under rent control)
  • You’re having any conflict with your tenant living in an in-law unit or a unit that has been physically divided without proper permits
  • You’re considering whether to begin negotiations with a tenant to buy out his/her tenancy
  • You’re considering physically dividing a unit into two or more separate units (Note: SPOSFI advises against this)
  • You’re considering renting out individual rooms in a unit to different individuals or signing more than one lease or rental agreement for different individuals who reside in the same unit (Note:  SPOSFI  advises against this)
  • You’re considering reducing a tenant’s rent, including on a temporary basis
  • You’re considering renting to a Section 8 tenant 

This list is not exhaustive, but it highlights some of the most common consequential points that arise during a tenancy.  Even if you have an understanding of and level of comfort with how to handle some of the circumstances above, given the rapidly changing landlord-tenant laws in San Francisco, it remains advisable that you consult with an attorney.  For example, the legal rules and policies regarding in-law units and tenant buyouts have changed markedly in the past two years. 

Preventative Landlording

To have the best chance of a successful landlord-tenant relationship, the tenancy needs to be set up properly and monitored at all the decision points discussed above.  Practicing “preventative landlord” by getting appropriate legal advice at these points will help you not only protect yourself and your property, but will also give you peace of mind. 

Patrick J. Connolly is with the law firm of Utrecht & Lenvin, LLP and may be reached at (415) 357-0600. 

Reprinted with permission of the Small Property Owners of San Francisco Institute (SPOSFI) News.  For more information on becoming a member of SPOSFI or to send a tax-deductible donation, please visit their website at www.smallprop.org  or call (415) 647-2419.