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By Jeffery P. Woo

“Life is as tedious as a twice-told tale, vexing the dull ear of a drowsy man.”
- William Shakespeare

“Fool me once, shame on you. Fool me twice, shame on me.”
- Jim Neighbors as Gomer Pyle

When Herb Caen dubbed San Francisco the “city that knows how,” he could well have been commenting on the high level of, or access to, knowledge that tenants in this city have about renters’ rights. So it’s a bit ironic that Supervisor Chris Daly’s newest amendment to the San Francisco Rent Ordinance creates new obligations for both buyers and sellers of residential rental property to provide disclosure to tenants of their rights under the Rent Ordinance.

Specifically, Section 37.9(j)(1) of the ordinance provides that before a property is sold, a seller must provide a written disclosure, which states that:

1. A tenant may not be evicted or asked to leave solely because a property is being sold or solely because a new owner has purchased that property;

2. A tenant’s rent may not be increased solely because a property is being sold or solely because a new owner has purchased that property;

3. The rental agreements of tenants cannot be materially changed solely because a property is being sold or solely because a new owner has purchased that property;

4. The owner’s right to show units to prospective buyers is governed by Civil Code Section 1954, including a statement the tenant is entitled to notice and that the showing must be conducted during normal business hours unless the tenant consents to another time;

5. Tenants are not required to complete or sign any estoppel certificates, except as required by law or by the lease; and

6. Information about tenant rights is available at the San Francisco Rent Board.

And just in case the tenant did not already know the above or didn’t read the first notice, Section 37.9(j)(2) further provides that within 30 days after the purchase of rental property, a buyer must again disclose all of the above and further state that:

1. Any tenants, subtenants or roommates who were lawful occupants at the time of the sale remain lawful occupants; and

2. Tenants’ rights to housing services cannot be severed solely because a new owner has purchased that property.

Admittedly, this new requirement will probably not greatly affect the buying and selling of property. The San Francisco Association of Realtors has already created a form that will comply with this law. If you are involved in the purchase or sale of property, most likely your realtor will take care of this paperwork for you. However, it is an example of a type of cynicism that seems to pervade our city and its leaders. Was there a wave of tenants who, had they been given this written warning, would not have unwittingly given up their rights to their “greedy” property owners? No. What happened was that Supervisor Daly used an example of one property owner who allegedly defrauded tenants into accepting buyouts of their tenancies. The issues involving those allegations have been litigated, all without the need or benefit of Daly’s new law.

The real purpose of this law is political in nature. It is a token gesture and another brick in the wall that seeks to polarize property owners and tenants.
The amendment does not set forth what, if any, penalties result from the failure to serve the notice. However, it doesn’t take a great imagination to anticipate that some tenants will use such a failure as an opportunity to bring lawsuits, at least if you’re a cynic.

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The opinions expressed in this article are those of the authors 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. Jeffery P. Woo heads the Complex Rental Property Group at Sedgwick, Detert, Moran & Arnold. He currently serves as a director of the San Francisco Association of REALTORS® and the San Francisco Apartment Association. He can be contacted at 415-627-3706. His website can be found at www.mypropertyrights.com. Copyright © 2008 by Jeffery Woo and SF Apartment Magazine. All rights reserved.