Legal Corner Q & A

Handling Unknown Tenants, Unruly Guests, and Rent Reductions

By Various Authors

Q. How do I determine the name of a person who has moved into my flat with the master tenant?

A. The easiest way to determine the name of a person who has moved into your unit with your tenant is to ask. The vast majority of the time you will receive an answer. You can ask either your tenant or the new person. In the event that the occupants do refuse to give you the name of the new person, you can choose to serve a 6.14 Notice or take some other action. The notice allows you both to document that the name has been refused and to provide a physical description that identifies the person. For example, your description might read: “John Doe, true name refused, male Caucasian, approximately 30 years of age, 5’8”, clean shaven, brown hair, blue eyes, wears glasses, approximately 175 lbs.” If you needed the information for a notice to cure, breach of covenant, or quit in order to enforce a provision against unlawful subletting and assignment, you could pursue the same approach. The occasion when you are definitely refused a name, however, is very rare. In most cases, you will get it simply by asking.
– Saul Ferster

Q. Several tenants are concerned that a man who has access to an apartment in my building, loiters around in the halls during the day and appears drunk. Any suggested procedures?

A. From your question, the person who is causing the disturbance appears not to be a tenant (occupant) of the property but actually a guest of a tenant. Tenants are responsible for their own behavior and that of their subtenants and guests. They must not allow these people to interfere with the comfort, safety or enjoyment of other tenants in the building. You, as the owner, also bear responsibility for controlling any disturbing behavior. You could be held liable for (1) the constructive eviction of other tenants who may vacate their units because of such unruly behavior and (2) any injury to people on the property caused by this unruly individual.

Working through qualified legal counsel, you should immediately send a stern warning letter to the tenant who permits this person access to the property, informing that tenant of the complaints by other tenants. The letter should state that the tenant’s failure to immediately control the guest’s behavior might result in legal action. As a precaution, a copy of the warning letter should be sent within five days to the San Francisco Rent Board along with a cover letter that explains the intent of the warning letter to the tenant. The aim, as the letter describes, is to control the nuisance behavior surrounding the tenant’s unit and is not “a request to move” or a “threat of eviction” as stated in the recent Daly amendment to the Rent Ordinance.

At the same time, you should consult with the complaining tenants; and acknowledge their complaints and request assistance from them in documenting the unruly and threatening behavior of this houseguest. Encourage these tenants to call the police in the event of any sign of violence or physical danger to themselves or the property. Another effective action is to engage the community-based mediation service of the Community Boards (415-552-1250), which provides mediation service for disputes between neighbors as well as between landlords and tenants.

If the warning letter and mediation effort through the Community Boards does not solve the problem, you have two options. You could either (1) seek a court-issued restraining order under Code of Civil Procedure section 527.6 that prevents the houseguest from harassing other tenants in the building or (2) pursue an eviction of the tenant pursuant to S.F. Admin. Code section 37.9(a)(3), the so-called “nuisance” ground for eviction. Due to the high cost of eviction through unlawful detainer, you may want to first pursue the restraining order remedy. If you are unable to obtain a restraining order or should this prove ineffective, you could then pursue the eviction of the tenant who continues to allow this guest access to the property.

At the jury trial for the nuisance-based, unlawful detainer action, you need to prove that the tenant who allows the unruly houseguest access to the property is “creating a substantial interference with the comfort, safety or enjoyment” of the other tenants in the building. In general, the strength of your nuisance case depends on the egregious behavior of the tenant or his houseguest, as well as the effect of such behavior on the other tenants in the building. A San Francisco jury would likely be more receptive to your nuisance case due to your initial mediation efforts as well as the cooperation and testimony of other tenants in the building who are disturbed by this houseguest.
– Jak Marquez

Q. I am willing to reduce the rent after my tenant’s one-year lease expires (as requested by the tenant), but I would also like to bank this year’s annual allowable rent increase for use later on. Is this possible? If so, should I incorporate this year’s allowable rent increase into an agreement that also includes the rent reduction?

A. No. Upon expiration of the lease (you are presumably collecting above-market rent for the unit through the end of the one-year fixed term), you will enter into a new agreement under which the rent is reduced and, thereby, create a new tenancy agreement. Of course, you will not be allowed to enter into a lease under which the rent is increased (though you could impose the annual increase allowed by the Rent Ordinance).

The Rent Ordinance regulates rent increases for existing tenants in occupancy, and you cannot contractually alter the statutory rules set forth in the Rent Ordinance. Rent Ordinance § 37.2 defines “base rent” to be “[t]hat rent which is charged a tenant upon initial occupancy plus any rent increase allowable and imposed under this chapter…” Though the reduced rent in this situation is first charged to a tenant already in occupancy, it will still be understood to be the rent for a new tenancy. This is the only safe way to interpret the Rent Ordinance (i.e., “initial occupancy” will be understood to be synonymous with commencement of the tenancy). In fact, when you impose an annual increase (or banked increases) on a tenant in occupancy, the new increased rent is the new base rent for purposes of future rent increases. A judge is not likely to let you have it both ways (i.e., new base rent when increased, but not when reduced).

The Rent Ordinance does not really contemplate or explicitly address rent reductions, which is why it is silent on the issue. In a declining market (such as we have now), a rent reduction can only be a temporary one, with a step-up later in time back to the base rent paid prior to the reduction. Your problem is analogous to this for if the rent is reduced, chances are that when push comes to shove at either the Rent Board or in the courts, a judge or administrative law judge would rule and decide that a valid new tenancy agreement had been created with a new reduced base rent.

Rent Ordinance §37.2(q) defines a “rent increase” to be “[a]ny additional monies demanded or paid for rent as defined in item (p)… or any reduction in housing services without a corresponding reduction in the monies demanded or paid for rent . . .” At the same time, Rent Ordinance §37.2(p) defines “rent” to be “[t]he consideration, including any bonus, benefits or gratuity, demanded or received by a landlord for or in connection with the use or occupancy of a rental unit …” A new, reduced rent is still “rent” within the meaning of the Rent Ordinance, and it can only be increased in accordance with the provisions of the Rent Ordinance.

With respect to “banking” increases, Rent Ordinance §37.3(a)(2) provides that “[a] landlord who refrains from imposing an annual rent increase or any portion thereof may accumulate said increase and impose that amount on the tenant’s subsequent rent increase anniversary dates.” Since the reduced rent is still “rent” under Rent Ordinance §37.2(p) and you can only bank increases connected and pegged to the rent (i.e., reduced rent), you do not retain the increase for the original agreement and cannot contractually agree with your tenant to retain it after reducing the rent.

Furthermore, §1.11 of the Rent Board’s Rules and Regulations defines the “anniversary date” to be “[t]he date on which the tenant’s current rent became effective except in the case of certified capital improvements, rehabilitation, and/or energy conservation work which, when granted, do not affect or change the anniversary date ….” Moreover, §4.12 of the Rent Board’s Rules and Regulations relates to banking and provides that “[a] landlord who refrains from imposing an annual rent increase, or any portion thereof, may accumulate said increase and impose that amount on or after the tenant’s subsequent rent increase anniversary date; however, the rent may be increased only one time every twelve (12) months.” Since you have to wait for an anniversary date to make a rent increase, this language makes fairly clear that the new reduced rent is a new base rent, such that you lose any prior increases you could have imposed had you never reduced the rent in the first place.

If you only have one annual increase to impose, you lose only a modest increase and have to wait just one year to pass at the reduced rent before you can impose an annual increase (as opposed to two, with one banked). If you refuse to reduce the rent, you likely will lose the tenant, so be happy that the tenant will be generating some cash flow, as opposed to having a vacant unit.
– Curtis Dowling

The opinions expressed in this article are those of the authors and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. Theinformation contained in this article is general in nature. Saul Ferster can be reached at 863-2678.Jak Marquez is with MacDonald Beckman, LLP, 956-6488. Curtis Dowling has joined the Law Offices of Andrew M. Zacks, LLP, 956-8100. © Copyright 2002.