A Family Affair
by Various Authors
Q. I rented a one-bedroom apartment to a couple several years ago. They recently had twins and now the grandparents have shown up to help out. The whole group seems to be living in the apartment with no signs of departure. Is there anything I can do?
A. The first thing you can do is inquire about the grandparents’ plans. The grandparents may be just visiting. Ask their status from your tenants, and decide whether or not you have an issue. Most rental agreements limit the number of days guests may remain. If you’re willing to permit more time for this special occasion, you should do so in writing. A statement should be signed by the tenants and their “guests,” with an agreed guest departure date, explicitly confirming that the grandparents are guests and not tenants. That admission should protect you, unless their stay exceeds what you have agreed upon, at which point you may want to inquire again and either get another such statement, or take action to evict.
If, however, it becomes apparent that the grandparents intend to reside in the unit, you may object. Rent Ordinance Section 37.9(a)(2)(B) provides that where a rental agreement limits the number of occupants or limits or prohibits subletting or assignment, no eviction may be brought against the tenant for violating such provisions as a result of the addition to the unit of a tenant’s child or parent, among others, so long as the total number of occupants does not exceed the lesser of two persons in a studio, three persons in a one-bedroom unit, four persons in a two-bedroom unit, six persons in a three-bedroom unit, or eight persons in a four-bedroom unit; or the maximum permitted in the unit under state law and/or other local codes such as the building, fire, housing and planning codes (which tends to be quite high). The tenant must first, however, provide a written request to add the occupants, giving the landlord 14 days to respond. The refusal of the tenant’s request may not be based on the proposed additional occupant’s lack of creditworthiness, if that person will not be legally obligated to pay rent to landlord.
In this case, the limit on the number of persons in a one-bedroom unit (three) is already exceeded by the addition of the second baby. Acting against the tenants for the twin babies’ sudden presence is obviously a nonstarter, however, and should you even try, you would be subject to liability for discrimination against families with children. An argument can be made, of course, that infants such as newborn twins should not be factored into the count, and for some purposes they are not. However, even without counting the children, moving in the grandparents exceeds the maximum allowed, by one. And, of course, when the children grow up, and those cute little two-month-old twins become cute 22-year-old young ladies, the occupants, assuming the grandparents enjoy a healthy longevity, will be six adults—clearly impermissible, but at that late date most likely without remedy for you.
So, let your tenants know grandma and grandpa must leave. In the meantime, let them enjoy the visit, change a few diapers and be glad they can return home to their own abode, and sleep through the night, physiology permitting of course.
—Saul M. Ferster
Q. What do I do if I catch my tenants renting out their units on Airbnb? Is it different if they rent out the whole unit rather than just individual rooms?
A. This is a very good and timely question, as subletting through Airbnb is rampant in the city and will inevitably increase this year. Airbnb is an internationally popular website boasting the availability of private apartments as less expensive vacation housing than hotels in sought-after travel destinations such as Paris, New York, Berlin and San Francisco. Users from around the world simply log on and purchase time slots to listed apartments in these world-class cities at a fraction for what they would pay at hotels. The lister (your tenant), meanwhile, reaps the profit when a visitor reserves time in your rental unit. Not surprisingly, inventory volume in desirable tourist destinations has exploded.
To add insult to injury, tenants in rent-controlled places like Paris, New York and San Francisco enjoy subsidized rent, yet are presently unrestrained to take in substantial profits for subletting their apartments through Airbnb and similar portals. Ironically, as apartment house operators, we are precluded by law from renting units directly to tourists for short-term stays, but many tenants seemingly ignore this prohibition.
SFAA and other industry groups are expressing outrage at city hall for what amounts to an egregious assault by tenants, as well as Airbnb’s operators. The city is concerned because these vacation rentals are depriving its coffers of hotel taxes, while the hospitality industry is likewise enraged over this unfair infringement on their businesses.
Industry attorneys have outlined three strategies that can be employed to combat tenants who sublet your unit to tourists. The first is serving a rent increase notice under the Costa-Hawkins Rental Housing Act. This tact is appropriate when the entire unit is sublet, and will probably be successful only in instances where the tenant has moved out and literally converted your apartment into a permanent vacation rental. Costa-Hawkins allows you to impose an unlimited rent increase when the tenant no longer permanently resides in the unit. Industry attorneys contend that converting the entire unit to a destination hotel room means that the tenant is no longer living there and that thereby justifies decontrolling it.
The second option is serving a Three-Day Notice to Perform Lease Covenant or Quit, provided there is a written rental agreement that restricts at-will subletting.
By law, the tenant would have three days to eject the tourists, and often this occurs. More commonly, however, Airbnb stays exceed three days, and therefore the concierge tenant is unable to eject her guests in time. Many local attorneys have successfully prosecuted evictions on this ground, and the entire unit need not be sublet in order to invoke the breach of lease covenant strategy. (However, as mentioned above, there must be clear language in the lease that either prohibits subletting or restricts it without the owner’s prior consent.)
Lastly, some practitioners have served a Three-Day Notice to Quit based upon illegal usage of the unit, and based the illegal use off of provisions of the local Administrative Code and Planning Code that prohibits rentals for under 30 (or 32) days unless the lessor has a tourist license. In this scenario, the tenant cannot cure the breach, and the eviction action is thereafter filed if everyone, including the tenant, is not out in three days. This is a controversial proposition in that many tenant attorneys argue that these legal prohibitions apply to owners, not tenants.
Your attorney will guide you as to the most appropriate tactic. In sum, please check the airbnb website with frequency if you suspect that one or more of your units is being put to this type of use. If you discover that your building has been “hotelized,” contact experienced landlord-tenant counsel immediately.
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. David Wasserman is with Wasserman-Stern Law Offices and can be reached at 415-567-9600.