2014 Developments in Real Estate in San Francisco

This looks like a perfect moment to look back and observe what's new on our real property scene and what changes were most notable in 2014. I can't climb down your chimney, but please accept as my present to you, this short summary of the most noticeable movements I assembled below:

Friday after Thanksgiving--Not a Business Day

The fact that the day following the Thanksgiving Day is not a business day is not obvious. After all, most retail outlets on that day are gladly open for business--even earlier than usual--to keep up with the Black Friday sale spirit. Government Code 6700 does not mention it. However, it is a holiday, as established by these statutes:

Employment Posters

2015 is coming up, and it is this time of the year, when we think of upgrading employment posters.

Dog Law

Dogs are in the spotlight lately. Governor Brown has recently signed into law a new act allowing statewide access for dogs in restaurants. There is also an ongoing debate of a too flexible and uncontrollable approach of "service animals," proliferating in great numbers, especially in San Francisco, who are often confused with rigorously trained guide dogs. San Francisco also now amended its Health Code, by adding Article 39, which codified a "commercial dog walker," which is in effect since April 21, 2013. How all these developments affect the landlord-tenant relationship?

Anti-Ellis Act SF Ordinance Found Unconstitutional (Fed) and Unreasonable (State)

Federal Judge Breyer found the recently enacted San Francisco [anti] Ellis Act ordinance unconstitutional in a memorandum published on October 21, 2014. (Scribd copy). It is interesting that the court addressed the application of ordinance's formula as bringing counterintuitive results in amounts payable to the tenants (see page 8 of the memo), in line with the hypotheticals I made in my June post. In February, state Judge Quidachay found the ordinance "unreasonable." (Rent Board copy).

Update: the Rent Board issued a bulletin confirming that the subject payment requirements under the new ordinance are currently off, and the payments proceed under the prior scheme.

Update 2-20-15: on the state trial court level, demurrer to Jacoby's petition is overruled, on the distinction between characterizing the payment to evicted tenants as "unreasonable" or "prohibitive."

Update 3-25-15: the Rent Board had the decision on demurrer in Jacoby case published as well, but what is more interesting is the annual report, issued March 23, 2015, covering the statistics on eviction notices filed from March 1, 2014, through February 28, 2015. Page 2 shows the impact this unreasonable [state court] and unconstitutional [Fed. court] legislation had on the housing: 48% decline in filed notices under the Ellis Act cause for eviction. For the short time the legislation was alive, it slashed the total number of a whole of Ellis Act filings in half--a huge impact by all means.

Update 6-14-15: the Rent Board caps proposed total payment amounts at $50,000. More on this here.
Update 10-2-15: the court strikes this new 50K cap proposal, as even more unreasonable than the original regulation (Coyne case, CPF-15-514382)

Update 3-21-17: the court of appeals affirmed the trial court's decision in Coyne and Jacoby, invalidating both 54-14 and 68-15 ordinances.



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More real property posts

Your options and available strategies in handling evictions will depend on your case's particular facts. If you want to learn on your options, rights, and obligations in contesting or preserving your real property rights, including the Ellis Act evictions, make your first step toward taking control over the circumstances, and call my office at (415) 987-7000. I will be glad to assist in guiding you through the jungle. The only thing you can't afford is to stay put and uninformed. My office provides a confidential assessment of your particular scenario, free of charge, and I will share with you the results of the analysis along with my thoughts on available solutions.

A Right For Private Action For a New Public Enforcer - Pro-Tenant Non-Profits

In the heavily discussed and disputed legislation proposing regulation of short-term homesharing (facilitated via online services such as airbnb.com or vrbo.com, among others), one offered amendment proposes to give the ordinance some "teeth" by including an opportunity for pro-tenant non-profits to sue landlords for violations of this short-term vacationing ordinance. In other words, to have a citywide Private Attorney General Act, or, more appropriately labeled as a Private City Attorney Act.  We are yet to see if this proposal will fit the applicable state law on the subject. Comparing with the already existing enforcement schemes in the fields of disability discrimination (ADA) and employment (PAGA), there are several things are to consider:

Joint Liability of Tenants

It is not uncommon to encounter a situation when two or more original tenants under a single lease agreement would act differently, and then expect different treatment by the landlord. A non-defaulting co-tenant might want to disassociate from a defaulting one. And, sometimes, a defaulting tenant would like to take all the liability on his or her own, in an effort to save other co-tenants from being held liable alongside with the defaulter. The outcome for such intentions may be decided based on the text of the lease.

E-filing works in SF Superior Court

Since I wrote about the e-filing coming to San Francisco last October, many changes were proposed, and some were even made, and the system started working on a wide variety of cases on July 14. Yesterday, I tried it for myself and today my first ever state-court filing went live! You may want to give it a try, the water looks safe!

[UPDATE 11-6-14] E-filing becomes mandatory across the board in civil cases in this court, with very few exceptions, effective December 8, 2014. Three more vendors were approved on November 5 in addition to the previously sole vendor, File & Serve Xpress.

Drafting the Owner Move-In Notice in San Francisco

Termination of tenancy starts from drafting and serving the notice of such termination, and the importance of making that notice as accurate and complete as possible is hard to understate. If the notice is defective, the landlord most likely will have to go back to the square one, starting the whole process again by reissuing and reserving the notice. Sometimes, months will pass before the landlord finds out about the deficiency. It may become a very expensive mistake to learn.

This article concentrates on the elements of a notice of termination of tenancy on the grounds of owner's move-in, the so called "OMI notice." It has quite a few elements and steps to be concerned about.

ATTENTION: this article was published in 2014, and things have changed since. Commencing on January 1, 2018, significant changes in the OMI/RMI procedure came into force. Read more here.  This is a fluid area of local law, your diligence in checking with the latest version of the law currently in force is required.

A Lose-Lose Scenario: Changes In Rent Ordinance Regarding Ellis Act Treatment Appear To Be Counterproductive

Update 10-21-14: Federal District Court finds this ordinance unconstitutional, see judge Breyer's opinion as published on PACER (scribd copy), case No. 14-cv-03352-CRB.

A significant change in the treatment of the Ellis Act went into effect in San Francisco on June 1, 2014 (Ordinance No.54-14). It is no longer enough to just look up the current amount for the fixed relocation assistance payment. To calculate what is due to tenants vacating under the Ellis Act one now has to employ a formula to select the greater from the two options: either the fixed amount, or "an amount equal to the difference between the unit's rental rate at the time the landlord files the notice of intent to withdraw rental units with the Board, and the market rental rate for a comparable unit in San Francisco as determined by the Controller's Office, multiplied to cover a two-year period, and divided equally by the number of tenants in the unit." Section 37.9A(e)(3)(E)(ii). The funny part is in the math: lesser entitled tenants stand a higher chance to recover large payments.

Employer's Bond To Appeal Labor Commissioner's Decisions - Mandatory or Not?

Not everyone works a 4-hour workweek, but all those who work some finite periods of time may wonder, when does the time worked starts counting toward the overtime. In California, a straightforward response would be, after 8 hours per day or after 40 hours per week. But not everything is straightforward, and the overtime may come sooner just as well as it may come later in the workday or workweek. In other words, "it depends."

When Overtime May Be Due Over A Shorter (Longer) Time?

Not everyone works a 4-hour workweek, but all those who work some finite periods of time may wonder, when does the time worked starts counting toward the overtime. In California, a straightforward response would be, after 8 hours per day or after 40 hours per week. But not everything is straightforward, and the overtime may come sooner just as well as it may come later in the workday or workweek. In other words, "it depends."

The Times Are A-Changing: Pending Developments Affecting San Francisco Real Estate In 2014

There are several developments currently--and rapidly--changing the San Francisco real property scene, all worthy of attention: condo-conversions, Ellis Act, vacation rentals, changes in in-law apartments, and more, all actively brewing right before our nose. Here is the short summary of the developments as of today:

Rescind, Surrender, And Cancel. Courts' Handling Of Leases.

I recently had to ask a clerk of the San Francisco Superior Court to enter a default judgment "for possession only" in an eviction case. The procedure does not require many steps to comply with, but this time I talked the details over with the clerk, and left very glad that I did, because I accidentally discovered that the SF Court follows an ancient tradition of physically canceling an original instrument, the lease agreement.

fLAWcharts and fLAWpps

The laws are the rules, and following those rules is akin following steps of an algorithm. "Yes" or "No," or, if you did X, then you get Y under the rule Z.  On this basic premise, I decided to try my hand in making a legal flowchart ("flawchart") and an app to walk a user by that flawchart ("flawpp"). I so far was able to complete just one, covering steps a homeowner might take if (s)he gets a notice of violation from the San Francisco Department of Building Inspection.

Comparing Housing Regulations Across Atlantic

As economy improves, so does the housing market. Increased activity on that market causes prices to go up, together with the pressure on tenants who pay below the market rent. This general rule appears to work the same way in various urban markets, which makes it interesting to take a look at how it is handled across the Atlantic, in London, UK.

Access to UK Caselaw And Beyond

If you need to look up a case decided in United Kingdom, try this free database. While there, look at the right column, entitled "World Law Resources," it has links to a collection of world jurisdictions.

Legal Paper Size is ... Illegal. Foolscap!

Today, for the first time, my complaint was not accepted for filing because some of the pages were presented on legal size paper. The lease was printed on an old "long" form, requiring the legal size, and, while I used to have those exhibits successfully filed before, my luck ended today. The reason is not even a law, but the technology: I was told that the scanning company complains about the legal size, so all non-letter sized papers are now prohibited, in order not to upset the scanners. There you have it, the paper size called "legal" is not legal after all. I made a new copy of the long pages, reducing them to 8.5" x 11," and the filing went through, but, while I waited in line, I tried to look the subject up, and here are my findings.

Running Circles Around Planning Department: Start By Planning

Back in 2012, I've made a simplified flowchart of the steps required for a real estate homeowner or developer to handle the San Francisco Department of Building Inspection's notices of violation.  This plan is still relevant today.

"App" Help For Lawyers - FilingRabbit.com Takes On Document Management

The "Internet of Things" comes as a next phase in our practical appreciation of the Internet, going beyond webpage interactions and social media. You can call a cab substitute, summon a baby-sitter, or get your online order delivered, all by tapping into a power of crowd-sourced and -outsourced apps, straight from your phone.

Search your phone's app store, and you will discover that pretty much any activity under the sun has its own app for it. Legal profession, though, notably lags in the apps offering.

Similarities Between Landlord-Tenant and Employer-Employee Relationships

Since I primarily practice litigation in these two fields, real property and labor law, it has caught my eye that the rights and obligations of the parties in rental and employment contexts have many similarities. To see just a few, consider the holdings I highlighted in this post.

When You Hear "S.O.S.," Listen Between The Lines. Landlords See More of The "Season of Sharing."

An eviction for "nonpayment of rent" used to be considered as a more predictable, straightforward kind of an unlawful detainer action, especially when compared against evictions for more sophisticated causes, like nuisance or breach of an obligation other than a payment of rent. But, since the only constant we can rely on is the change [Heraclitus], the change is here and the easiness is no more. "'Tis the Season" say some of the tenants, who fell behind in paying rent, and they don't mean Christmas. They cry "S.O.S.," aka "Season of Sharing," and want landlords to accept their offer without reading the small print. But let us take a closer look.