Feature
by Saul M. Ferster
San Francisco’s arcane and landlord-hostile legal environment can transform normal landlord-tenant transactions into a train wreck waiting to happen. Wrongful eviction claims can afflict any landlord, but they most lethally strike the unprepared, the unsophisticated, the unenlightened and, unfortunately, the uninsured. Lawsuits for wrongful eviction are a creation of the San Francisco Rent Ordinance. Section 37.9(a) creates 14 just-cause reasons for eviction and without one of these the landlord may not lawfully evict. Many require the landlord to act “in good faith, without ulterior reasons and with honest intent,” permitting court or jury to play mind reader. Complex and expensive procedural requirements, such as relocation payments and San Francisco Rent Board filings, may apply.
Rent Ordinance Section 37.9(f) authorizes a tenant to sue for injunctive relief and money damages of not less than three times actual damages, including damages for mental or emotional distress (which may be trebled only if the court finds that the landlord acted in knowing violation or reckless disregard of the ordinance’s eviction provisions), and attorneys’ fees, a major hook for a tenant lawyer.
Take, for example, a long-term tenant paying $800 monthly for a one-bedroom apartment with a market rent of $2,000. The rent differential damage to the tenant wrongfully evicted is the difference between the current rent and the market, or $1,200 monthly. If the tenant would have resided in the unit for an additional five years, the damages become $1,200 times 12 months times five years or $72,000 before mandatory tripling, and $216,000 after. Add to that the tenant’s moving expenses, tripled, wage loss, tripled, and, in the worst case scenario, emotional distress damages, tripled, plus attorney fees of tens of thousands of dollars. It takes no genius to recognize the incentives for bringing a lawsuit. As a tenant lawyer once told me, “Representing the landlord is the bread and butter of the profession, but the real money is representing the tenant.” Many landlords brush the risk aside, assuming it applies only to the other guy. “After all, I’m good to my tenants. I don’t evict anyone. None of this really affects me, does it?” they ask. You bet it does!
Common Reasons for Wrongful Eviction Suits
The potential causes for a wrongful eviction lawsuit are multiple. The one most people automatically think of is malevolence and its companions: deception and greed. In this case, the landlord contrives an eviction to raise rent or eliminate an unwanted tenant. Several years ago, I defended someone in a wrongful eviction lawsuit who had given an otherwise valid notice for an owner move-in eviction for his wife and himself. He even paid the tenant $5,000 for her inconvenience, when only $1,000 was required, and she signed a release. Unfortunately, the tenant discovered that two weeks before service of the notice, the wife had filed for divorce. Train wreck!
I am always amazed at the landlord who blatantly declares, “I’d really like to get rid of this tenant, so I want to do an owner move-in to get him out.” This landlord is not acting “in good faith, without ulterior reasons and with honest intent.” His purpose is illegal. Often, underlying facts demonstrate how ludicrous his objective is, such as stating his desire to vacate a large house in Hillsborough where his wife and children live for a studio in the Mission. This eviction should be a nonstarter, and if left to chug forward, invites a wrongful eviction lawsuit.
Lawsuits are also generated by the landlord’s simple failure to recognize and consider all the circumstances, and view them in the manner they will likely be viewed by the tenant. Owner and/or relative move-in evictions are rife with possibilities. The first source of conflict is the landlord’s failure to move into the premises within the 90 days prescribed (absent a very good reason), or to give up his current residence. Next is the failure to reside in the vacated premises as the owner’s principal residence for at least 36 continuous months. This may occur when the owner takes a job in another city, moves into a new spouse’s home or sells the property. Any of these circumstances, and others, may trigger a lawsuit. Ex-tenants will monitor the landlord, checking mail to see to whom it’s addressed, looking at names on doorbells and mailboxes and talking to former neighbors. One of my clients got a knock on his door one week short of three years after doing an owner move-in. He opened the door to find the former tenant standing there. The tenant smiled at him and said, “Just checking,” then turned and left.
Ignorance of the law generates wrongful eviction lawsuits: for example, the belief that a landlord may evict tenants from a single-family home to sell it. There is no such right. Sometimes the error is based on a misunderstanding of the state’s Costa-Hawkins Rental Housing Act, which exempts single-family homes rented after January 1, 1996, from rent control, but not necessarily from eviction control. The issue is unresolved, but it is better to work on the assumption that one of the 14 just causes for eviction remains necessary.
A few years back, I represented two elderly women whose departed mother left them the single-family house in which they had grown up. They rented the house to a middle-aged real-estate broker, his wife and three children. Over the years, this gentleman was frequently late with the rent. My clients took turns calling him about it and finally, in exasperation, decided to sell. They informed the gentleman that he and his family would have to move. He said nothing, but soon stopped paying the rent, claiming habitability defects. He was served with a three-day notice to pay rent or quit, held onto the house for a few months and before the eviction trial, vacated. Then he served my clients with a wrongful eviction lawsuit going back to the request for him to vacate so they could sell the house. The former tenant demanded a whole panoply of damages. He’d looked at only one alternative residence in San Francisco, which he said was not affordable, and because he didn’t want to commute, would not consider less expensive areas, like Daly City or Oakland. Instead, he moved his family to his native city halfway around the world, where his wife rented an apartment and his children were placed in private schools. He wanted my clients to pay for all this, including his airfares to go back and forth to visit them. He claimed he was so distracted by his pending eviction that he had a traffic accident that resulted in a brain injury, for which he also held them accountable. They had no wrongful eviction insurance, and would have had to battle him alone if not for one ironic fact. Because the accident resulted in physical injuries, the insurance company stepped in under the general liability policy. Ridiculous? You bet it is, but some lawyer in San Francisco took this case and my clients had to defend it.
Failure to follow formal procedures can also lead to lawsuits. I have seen too many landlords write a simple letter or note to the tenant asking him to move so the landlord or relative could move in. Legally, a detailed notice meeting several requirements must be served, along with relocation payments ($4,500 for each individual residing in the unit for one year, regardless of age, up to $13,500 per rental unit, with an additional $3,000 for persons who are 60 or over, or disabled, or have children in the household, with annual indexed increases) and documents must be filed with the Rent Board.
Then there is the “eviction” the landlord never intended to do, the so-called “constructive eviction,” where the landlord is alleged to have created an environment so hostile to the tenant that the tenant had no reasonable choice but to vacate. Constructive evictions are frequently based on habitability defect claims: for example, lack of heat, hot water, or weather stripping, or the presence of vermin or mold. The tenant moves out and then brings a wrongful eviction lawsuit, and includes claims such as breach of the implied warranty of habitability, negligence, nuisance, emotional distress and unfair business practices. The most effective way to prevent this type of lawsuit is to promptly respond to tenant demands for remediation of problem conditions. This is sometimes easier said than done because the very tenant making the complaints may be obstructing remediation by preventing landlord access and interfering with workers. Sometimes the very goal is to set the landlord up for a lawsuit.
One of the most difficult scenarios for landlords is to be caught between warring tenants. Each tenant accuses the other of disturbing his quiet enjoyment. They each threaten to sue the landlord for the acts of the other. The landlord, who has not witnessed the events, cannot know who is the victim or the offender. Siding with the wrong tenant, or at least the one who ultimately fails to prevail, may subject the landlord to wrongful eviction claims when the other tenant moves out and charges constructive eviction. You should suggest that the warring tenants seek the assistance of the Community Boards, or another intermediary, and request in writing that they respect the peace and quiet of their neighbors. Noise penetration problems through hardwood floors may be obviated by the installation of carpeting, even at landlord expense. Many rental agreements require the tenant to cover at least 80% of the floor with rugs or carpet. A good paper trail is mandatory. Some rental agreements, such as the one created by the San Francisco Apartment Association, provide that the landlord is not required to take action against any tenant on behalf of another. If you must take action, make sure that enough other tenants corroborate the offenses, and are willing to appear in court and testify—letters are not enough.
Constructive eviction claims may also result from abusively frequent landlord entry, or entry without proper notice, as when a tenant steps from the shower to discover the presence of the landlord or worker. Understand that there is no general right to enter to inspect the unit. Entry may only be made for the limited reasons set forth in California Civil Code Section 1954, which includes the provision of necessary or agreed upon repairs, alterations or services; when the premises have been abandoned; exhibiting the premises to potential buyers; emergencies; and certain specified others. You should be familiar with the reasons you may enter, and not abuse the right. Claims of harassment may also result from a landlord routinely stopping tenants’ guests to learn their business. The landlord has the right to know who is living in a unit (if there is a no-assign, no-sublet provision in the lease) and to protect the safety of the building and its occupants, but not to badger the tenant. Inquiries of guests should be made judiciously.
Avoiding Wrongful Eviction Suits
How best, then, for the landlord to avoid being the target of a wrongful eviction lawsuit?
First, do good tenant screening before signing a lease. Certain people are inherently litigious or problematic, and good screening can keep the bad apple out before ever given a key. Also, avoid unnecessarily generating bad will. For example, take rent increases annually and don’t leave them “in the bank.” Almost nobody balks at an annual increase of 1.5% or 1.7%. But, when you suddenly impose a 15% increase, it is bound to raise a tenant’s hackles.
Adequately document in writing all important communications with tenants. A good paper trail may be necessary to prove you have done everything reasonable to prevent or solve a problem, and you have not wrongfully threatened a tenant with eviction. Be constantly aware that your letters and notes may be subject to production in a lawsuit, including diaries you keep for yourself. Do not write anything that a court or jury might find offensive, such as profanity or sarcasm. As hard as it may be with certain tenants, maintain your decorum and be polite and professional at all times. Don’t ignore tenant complaints, even if the tenant is troublesome or never satisfied.
Don’t let tenant disputes become personal or emotional for you over some perceived principle or slight. Be willing to bend when the situation calls for it, even when you’re right, if that’s the sensible thing to do. Anticipate problems rather than reacting to them. And never let the words, “If you don’t like it here, you can move,” pass your lips. No need to inform the tenant of the obvious; the statement merely provides evidence for his wrongful eviction suit.
Don’t give notices to quit as the first response in all situations. Weigh the importance or triviality of the tenant’s violation and respond accordingly. Sometimes gradual escalation is better than a nuclear first strike.
Finally, carry wrongful eviction insurance. Owning rental housing in San Francisco without it is like driving your car on the freeway without liability insurance, something no good business person, or rational landlord, would ever do.
The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of SFAA or SF Apartment Magazine. The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Saul M. Ferster can be reached at 415-863-2678. Copyright © 2007 by SF Apartment Magazine. All rights reserved.