The Property Management Shop
by Marc Wilson
Q. I have a tenant who is six months into a one-year lease. She called me last week and requested a rent reduction. She said that she has been looking around and that she can find a comparable apartment for $400 less per month. Also, my building is a no smoking building and she has been observed smoking in or around her apartment. What should I do?
A. Did your tenant tell you what she would do if you did not lower her rent? If she did not, I can tell you that she will continue to pay her contractual rent for the remaining term of her lease. When a tenant who is still in the initial lease period calls and requests a rent reduction, I tell the tenant to call back when the initial lease term is over. I explain that I will gladly meet the market and quite possibly lower the rent at that time, but not before then. Most tenants are reasonable people. All things equal, a tenant will not vacate at the end of the term because he or she resents your earlier decision not to nullify and rewrite a perfectly good lease. I always remind the tenant who requests a re-write that times could be worse. For example, I describe how the tenant could be a law firm that signed a 15-year deal for 40,000 square feet at $92 a foot in the year 2000 for space that is now worth $32 a foot. I ask, “How much do you think these people would pay for a quick trip in a time machine to the five minutes before they signed that deal?” As I said, things could be worse.
The smoking tenant issue is a different problem. Obviously, you should be predisposed not to negotiate or, at a minimum, not to grant concessions to any tenant who is in breach of her contract. I know that you can enforce a nonsmoking clause in your rental agreement. This involves a simple Three-Day Notice to Perform, followed by a notice terminating the tenancy if the tenant fails to comply. I personally do not believe in “no smoking” policies within residential real estate. Your tenant has rented your apartment, which is now her home. I do not believe that a tenant who smokes in her home is materially disrupting the habitability of other tenants at the property. Do you want to regulate her alcohol consumption? What about her sexual orientation?
I see the real villain as rent control and just-cause evictions. In a non-rent controlled environment, property owners would not have so many rules and regulations governing tenants’ behavior because the owner would simply evict the tenant if the tenant smoked irresponsibly, had a disruptive pet or roommate, etc. In short, the owner would have the ability to effectively and safely manage his property without unnecessarily impeding the rights of the tenants. Do you honestly believe that the woman killed by the dog in Pacific Heights would be dead today if San Francisco was not a rent-controlled city? Do you think the owners of that property wanted to do business with the two attorneys who owned the dog?
The irony of rent control and just cause evictions is that they have actually served, in the long run, to reduce freedoms enjoyed by most tenants. Look what rent control has done for the average renter: no smoking, no dogs, no cats, no roommates, no laundry facilities within the apartment, no sub-leasing, no painting or altering the apartment, no this, no that, no the other thing and some of the highest rents in the nation. I can only imagine how proud San Francisco tenant activists must be…what a fine list of accomplishments.
The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. Marc Wilson has been managing and selling San Francisco apartment buildings for over 15 years. Please send your questions concerning property management issues to Marc Wilson at 1699 Van Ness Avenue, SF, CA 94109. He can be reached at 415-229-1275. © Copyright 2002.