Q:  Are Condominiums Exempt from Rent Control?

With the plethora of rent control rules and regulations in San Francisco, there is widespread confusion about how condominiums are treated by the Rent Ordinance. 

Price Control vs Eviction Control

Before getting into the details, it’s important to understand that there are actually two parts to San Francisco rent control: 

  •  Eviction Control: The owner of a rental unit subject to eviction control may only evict the tenant for cause, such as nonpayment of rent, illegal use, etc., or for an owner (OMI) or relative (RMI) move-in.
  • Price Control: The owner of a rental unit subject to price control can only raise the rent by an amount dictated annually by the Rent Board. 

All rental units (that are not condos) in buildings with Certificates of Occupancy before June 1979 (when the Rent Ordinance was enacted), are subject to BOTH eviction and price controls. 

Q: How Does Rent Control Apply to Condos?

All rental units in pre-1979 condo-converted buildings remain subject to the same eviction control regulations they were when they were regular rental units – no change. The big difference is in price control. Most condos in pre-1979 buildings are exempt from the price controls dictated by the Rent Ordinance, but with a few important exceptions.

A tenant in a pre-1979 condo-converted building continues to enjoy full rent control protection if s/he occupied the now condo as a rental unit since 1996, or – and this is by far the most common reason a condo-converted pre-1979 unit remains under price control—the condo is still owned by the original sub-divider.

Once the original sub-divider sells the condo in an arm’s-length transaction to a new owner, it is no longer subject to price control (but of course, it is still subject to applicable lease terms). If the original sub-divider owns only one condo, and has lived in it for one year after conversion, it is exempt from price control.

The rules pertaining to condos in buildings constructed after June 1979, regardless of when the conversion took place, are simple: all post-1979 condos are exempt from rent control, period. 

Is a New Rental Unit in a Pre-1979 Building Exempt from Rent Control?

Ordinance 30-15, sponsored by Supervisors Wiener and Breed, amends the Planning Code to permit exceptions from dwelling-unit density limits and other requirements when adding dwelling units to existing buildings undergoing seismic retrofitting. It also removes the requirement that a new in-law unit constructed in and near the Castro Street Neighborhood Commercial District be limited to 750 square feet in size. However, with its final passage on March 17, 2015, the question arises whether such new construction is exempt from rent control. This same question arises for in-law units added anywhere in the city before or after the Rent Ordinance was passed in June 1979.

The straightforward answer is that these units in older buildings do fall under rent control. It does not matter if they are recently added or date back years, even before the Rent Ordinance was passed. 

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.