Common wisdom holds that, while certain housing units are exempt from the Rent Control in San Francisco, they are still subject to the Eviction Control. That is, even if you can raise rent in those units above the limits dictated by the Rent Board, you still can't evict a person but for the defined "just cause" reasons. Such is the statement in Topic No. 19, issued by the San Francisco Rent Board.
Yet a close analysis of applicable sections of the SF Administrative Code indicates that an exception to the rule does exist, albeit a very narrow one. Despite what is said in the Topic No. 19, the prohibition is not absolute.
True, limitations on the rent increase are curtailed by the Costa-Hawkins Act, exempting certain units from the Rent Control coverage. For instance, single family residences are exempt. CC 1954.52(a)(3). Yet in the same statute we find that "[n]othing in this section shall be construed to affect the authority of a public entity that may otherwise exist to regulate or monitor the basis for eviction." CC 1954.52(c).
This compels us to look, how local authorities regulate the basis for eviction. Should we be in Los Angeles, the answer is clear and easily found: single-family residencies are exempt. The court decision in Gabor v. Cox, 26 Cal.App.4th Supp. 16 (1994), went even further, to treat a single-family house with an in-law unit as a single-family property, exempt from L.A. ordinance. But in San Francisco, the answer is scattered among several sections, and a lot of stars have to line up to have a unit exempt, even if it is a single-family residence.
We should start from the Section 37.9, which defines "just causes" of eviction. It begins with a preamble: "Notwithstanding Section 37.3, this Section shall apply as of August 24, 1980, to all landlords and tenants of rental units as defined in Section 37.2(r)." Remember to check about the 37.3, but let's start from the definition of the "rental unit" in Section 37.2(r). I have put here the important parts for our analysis:
Putting it together, if the physical unit itself complies with the requirement for exemption, the test is then to check if the landlord also complied with the procedural part, i.e. did not treat the unit under any of the statutes requiring notice for termination. The only scenario when the notice is not required is if the lease was for a fixed term, and the eviction is sought upon that term's expiration, not sooner and not later. "Later" is technically Ok, if no consequent rent payment was accepted (CC 1945), but waiting for too long is impracticable, see e.g., Section 37.2(r)(1). Landlords shall prepare to argue that no new tenancy is created by the holding over without consent. Ryland v. Appelbaum, 70 Cal.App. 268 (1924). Tenants would seek a chance to make an argument similar to one made in Ellis v. Columbine Creamery, 83 Cal.App. 48 (1927).
In reality, it appears to work well after the first expiration. Second and later consequent leases create an opportunity for tenants to argue, why the lease was renewed at the end of the previous term, but not renewed now. It may also be advantageous to consider a longer fixed term at the inception, like two or three years. I didn't see authority capping the length of the fixed-term lease. The court in Ryland v. Appelbaum upheld a 3-year fixed term lease.
Other exceptions under 37.2(r), such as units rented through government-subsidized housing (some of the Section 8 or SFHA contracts, and alike), have they own particulars, and they are not always obvious. For instance, under some of those programs, the rent agreements are renewed annually, but this is not true for the actual Section 8 HUD agreement, where often only the rent values are renewed (or changed), leaving the rest of the agreement the same.
______________________
Your options and available strategies will depend on your case's particular facts. If you want to learn on your options, rights, and obligations in a similar situation, 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.
Yet a close analysis of applicable sections of the SF Administrative Code indicates that an exception to the rule does exist, albeit a very narrow one. Despite what is said in the Topic No. 19, the prohibition is not absolute.
True, limitations on the rent increase are curtailed by the Costa-Hawkins Act, exempting certain units from the Rent Control coverage. For instance, single family residences are exempt. CC 1954.52(a)(3). Yet in the same statute we find that "[n]othing in this section shall be construed to affect the authority of a public entity that may otherwise exist to regulate or monitor the basis for eviction." CC 1954.52(c).
This compels us to look, how local authorities regulate the basis for eviction. Should we be in Los Angeles, the answer is clear and easily found: single-family residencies are exempt. The court decision in Gabor v. Cox, 26 Cal.App.4th Supp. 16 (1994), went even further, to treat a single-family house with an in-law unit as a single-family property, exempt from L.A. ordinance. But in San Francisco, the answer is scattered among several sections, and a lot of stars have to line up to have a unit exempt, even if it is a single-family residence.
We should start from the Section 37.9, which defines "just causes" of eviction. It begins with a preamble: "Notwithstanding Section 37.3, this Section shall apply as of August 24, 1980, to all landlords and tenants of rental units as defined in Section 37.2(r)." Remember to check about the 37.3, but let's start from the definition of the "rental unit" in Section 37.2(r). I have put here the important parts for our analysis:
(r) Rental Units. All residential dwelling units in the City and County of San Francisco together with the land and appurtenant buildings thereto, and all housing services, privileges, furnishings and facilities supplied in connection with the use or occupancy thereof, including garage and parking facilities.
...
The term "rental units" shall not include:
...
(5) Rental units located in a structure for which a certificate of occupancy was first issued after the effective date of this ordinance; (A) except as provided for certain categories of units and dwellings by Section 37.3(d) and Section 37.9A(b) of this Chapter;
...
(7) Dwellings or units otherwise subject to this Chapter 37, to the extent such dwelling or units are partially or wholly exempted from rent increase limitations by the Costa-Hawkins Residential Housing Act (California Civil Code Sections 1954.50, et seq.) and/or San Francisco Administrative Code Section 37.3(d).
In my opinion, it meant to say that, depending on how your unit fits the definition of 37.3(d), it either is exempt from the "rental unit" definition under 37.2(r)(7), or not exempt (literally, excepted from the exemption) under 37.2(r)(5). I say "in my opinion," because this is not crystal-clear: remember that the 37.9 preamble starts with a qualifier "notwithstanding Section 37.3 ..." If I am wrong, we can stop right here, but if I am right, let's look at 37.3(d).
Section 37.3(d) provides:
(d) Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50, et seq.). Consistent with the Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50, et seq.) and regardless of whether otherwise provided under Chapter 37:
(1) Property Owner Rights to Establish Initial and All Subsequent Rental Rates for Separately Alienable Parcels.
(A) 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 or is a subdivided interest in a subdivision as specified in subdivision (b), (d), or (f) of Section 11004.5 of the California Business and Professions Code. The owner's right to establish subsequent rental rates under this paragraph shall not apply to a dwelling or unit where the preceding tenancy has been terminated by the owner by notice pursuant to California Civil Code Section 1946 or has been terminated upon a change in the terms of the tenancy noticed pursuant to California Civil Code Section 827: in such instances, the rent increase limitation provisions of Chapter 37 shall continue to apply for the duration of the new tenancy in that dwelling or unit.
(B) Where the initial or subsequent rental rates of a Subsection 37.3(d)(1)(A) dwelling or unit were controlled by the provisions of Chapter 37 on January 1, 1995, the following shall apply:
(i) A tenancy that was in effect on December 31, 1995 remains subject to the rent control provisions of this Chapter 37, and the owner may not otherwise establish the subsequent rental rates for that tenancy.(ii) On or after January 1, 1999 an owner may establish the initial and all subsequent rental rates for any tenancy created on or after January 1, 1996.
In a short and over-simplified summary, it reads like this: (i) find out if it is a single-family residence, then (ii) see if CC 1946 or 827 was invoked, and if "yes" on the first and "no" on the second step, then it won't be a "rental unit" (Sec. 37.2(r)(7)), otherwise it will be (Sec. 37.2(r)(5)).
Note, that our local ordinance mentions CC 1946. Costa-Hawkins in a similar limitation refers to CC 1946.1 [CC 1954.52(a)(3)(B)(i)]. All these statutes (CC 1946, 1946.1, and 827) deal with a month-to-month tenancy or a tenancy for an unspecified period of time. The common part is that a termination or a change of terms in such tenancies requires a notice. See also, CC 791.
On the other hand, a tenancy for a fixed period of time, say a year, requires no notice and terminates by itself. See, CC 1933(1); CC 793; CEB Landlord-Tenant Litigation, Sec. 4.11.
Can a landlord maintain that fragile particular dedication of the premises being rented for a fixed term? It appears that the answer is "Yes," because even for rent-controlled units, there is a just cause for evicting a tenant refusing to sign a new lease for a fixed term, Section 37.9(a)(5):
The tenant, who had an oral or written agreement with the landlord which has terminated, has refused after written request or demand by the landlord to execute a written extension or renewal thereof for a further term of like duration and under such terms which are materially the same as in the previous agreement; provided, that such terms do not conflict with any of the provisions of this Chapter;In theory, all the landlords have to do is to ensure they don't miss the date when the old fixed-term lease expires to have the tenant to sign a new fixed-term lease. This way, at the end of that fixed term, the landlord can evict, provided that the unit and other prerequisites fit the bill.
In reality, it appears to work well after the first expiration. Second and later consequent leases create an opportunity for tenants to argue, why the lease was renewed at the end of the previous term, but not renewed now. It may also be advantageous to consider a longer fixed term at the inception, like two or three years. I didn't see authority capping the length of the fixed-term lease. The court in Ryland v. Appelbaum upheld a 3-year fixed term lease.
Other exceptions under 37.2(r), such as units rented through government-subsidized housing (some of the Section 8 or SFHA contracts, and alike), have they own particulars, and they are not always obvious. For instance, under some of those programs, the rent agreements are renewed annually, but this is not true for the actual Section 8 HUD agreement, where often only the rent values are renewed (or changed), leaving the rest of the agreement the same.
______________________
Your options and available strategies will depend on your case's particular facts. If you want to learn on your options, rights, and obligations in a similar situation, 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.
No comments:
Post a Comment