legislative updateS
The SFAA is dedicated to keeping our members informed about new and proposed laws in San Francisco while fighting to protect the rights of rental property owners. Because San Francisco land use policy changes so often, it is nearly impossible for property owners to keep abreast of the new laws.
SFAA tracks new legislative activity and translates it into understandable and concise language.
Here are issues we're currently tracking:
- Soft Story Seismic Retrofit Legislation Signed Into Law April 16th 2013
This legislation will:
Require the retrofitting of buildings that are- Wood frame
- Built before 1978
- 3+ stories (including the garage) or 2+ stories above a grade
- 5+ units
- Have a soft first story (usually parking spaces or commercial space on the ground floor)
The City will send a letter to owners of buildings that fit this general description from September 2013 to January 2014.
Owners will have one year to get their building evaluated by a licensed contractor, engineer, or architect to see if they are required to retrofit their building or if they are exempt from the legislation. Whether or not you have to complete the seismic retrofit work will be dictated by the sign-off of your licensed contractor or engineer.
There are different timelines to get the permits to do the work and to get the work completed depending on building type. Owners will have no less than 4 years to complete the seismic retrofit work. The timelines to complete the work range from 4-7 years depending on building size and type. Timelines are below.
Tier I Buildings have 2 years to submit permits and 4 years to complete the work- Tier I buildings contain a Group A, E, R-2.1, R-3.1 or R-4 occupancy on any story (senior housing, daycare facilities, etc.)
Tier II Buildings have 3 years to submit permits and 5 years to complete the work
- Tier II Buildings are buildings containing 15 or more dwelling units, except for buildings covered in Tier I or Tier IV
Tier III Buildings have 4 years to submit permits and 6 years to complete the work
- Tier III Buildings are buildings that do not fall within the definition of another tier.
Tier IV Buildings have 5 years to submit permits and 7 years to complete the work
- Tier IV Buildings are buildings that contain a Group B or M occupancy on the first story (food, office space, and retail) and buildings that are in mapped liquefaction or landslide zones, except for buildings covered in Tier I.
**Construction work that is mandated by the City is 100% passthrough-able. The passthrough is amortized over 20 years.
- Tobacco Smoke Disclosure Policy
In early February 2013 Mayor Lee signed into law a Tobacco Smoke Disclosure Policy for San Francisco Rental Housing Providers. The policy requires that rental property owners with less than one hundred percent (100%) smoke free rental properties must:
Read the legislation here.- Include in vacancy listings the unit designation as smoke free or smoking optional.
- Designate all units as either smoke free or smoking optional based on their current lease agreements.
- Owners with 50 residential units or less will until January 1, 2014 to develop a completed list of their apartments’ designations.
- Owners of 51 or more residential units will have until January 1, 2015 to develop a completed list of their apartments’ designations.
- Disclose in writing to all applicants who will be offered the apartment areas within the building, including individual apartments, where smoking is optional, prior to entering into a new lease.
- Maintain and update a master list that lists the location of all smoking optional units in a building (based on their lease agreements,) and is available to all tenants upon request.
- SFAA and CAA help pass Tenant Relocation Payment Bill
This bill, carried by Fiona Ma and crafted with and sponsored by the California Apartment Association, provides that in San Francisco and other rent-controlled communities, a landlord cannot be forced to pay more than $275 per day plus actual moving expenses for temporary relocation of a tenant in order to make repairs or capital improvements to the unit. Read more.
- SFAA Board recommends approaches for apartment-sharing
With online bookings at apartment-sharing and travel websites more than quintupling between June 2011 and June 2012, SFAA’s Board of Directors met last week to discuss an industry approach to respond to and deal with tenants who use travel websites to re-rent their apartments out as nightly or short-term hotel rooms.
Current San Francisco law prohibits short term rentals of less than 32 days, and no-subletting clauses in apartment leases prohibit residents from re-renting to others, nightly or otherwise. However, many tenants might not know that by using apartment-sharing websites to generate additional income, they could be violating their lease and several local laws, jeopardizing their housing in the process.
As of last week there were over 2,500 online listings to rent out entire San Francisco apartments on a nightly basis, and SFAA has received an influx of complaints from membership over the past six months. In addition to putting residents at risk for eviction, the rise of apartment-sharing websites puts building security and the health and safety of other residents at risk, disrupts a sense of building and neighborhood community, and limits the availability of our already-limited housing stock.
SFAA's Board of Directors has come up with Three Recommended Approaches to a resident subletting part or their entire apartment through travel and apartment-sharing websites:
3 Day Notice to Perform Lease Covenant or Quit (Subletting in Violation of the Lease)
3 Day Notice to Quit (Illegal Use)There must be a restriction on subletting clause in the lease agreement to serve this notice.
The 3 Day Notice to Perform Covenant gives the resident an opportunity to cure the lease violation, but if 3 days expire before the tenant cancels bookings and reservations and the unauthorized guest remains in the unit, the owner can proceed with eviction.
Costa Hawkins Rent Increase (Tenant no longer permanently resides in the unit)Based on Illegal Use of a residential unit, owners should contact an attorney before issuing a 3 Day Notice to Quit to their residents.
3 Day Notice to Quit for Illegal Use of a residential unit does not provide an opportunity for the resident to rectify the violation of law.
Please contact the SFAA office with input, questions and comments about your experiences with apartment-sharing sites. The forms mentioned in this policy communication can be found at the SFAA office, and a list of attorneys is available at http://www.sfaa.org/associates.html or in the back of your monthly magazine.The Costa Hawkins Notice of Rent Increase is valid until contested, and the burden to challenge the notice is on the resident.
Rent increases of more than 10% must be given with a 60 Day Notice, which allows time for the resident to challenge the rental increase. Otherwise, a 30-day period is fine.
- SFAA Achieves Big Legislative Win for Property Owners
Supervisor Weiner’s Parking Tax Simplification legislation was passed by the full Board of Supervisors Tuesday 9/18/12 by a resounding 10-1 vote. Over the past few months SFAA has worked with Supervisor Scott Weiner’s office on simplifying parking tax requirements and regulations for residential property owners who rent five or fewer spaces to non-residents.
This important piece of legislation amends the San Francisco Business and Tax Regulations Code to relieve residential property owners and managers who rent five or fewer parking spaces to non-residents from the requirements to:
- obtain a certificate of authority,
- make monthly tax prepayments, and
- obtain a parking tax bond.
- Provide an amnesty from parking taxes, interest, penalties and fees owed for tax periods more than 24 months prior to the effective date of the ordinance (the reporting amnesty runs from January 1, 2013 to June 30, 2013).
- Exempt property owners and managers from the requirement to pay the Revenue Control Equipment compliance fee.
- Allow use of up to five dwelling unit parking spaces to be leased to persons living off-site anywhere in the City.
- Eliminate the requirement for residential property owners and managers to hold and register a commercial parking permit pursuant to the Business and Tax regulations code.
- obtain a certificate of authority,
- Revised bed bug rules & regulations
The San Francisco Department of Public Health revised their bed bug Rules and Regulations effective July 1, 2012. Read them here. Supervisor Kim recently passed legislation regarding Bed Bug abatement. Read the Legislative Digest. Read the legislation as passed by the Board of Supervisors.
- SFAA and CAA help pass Tenant Relocation Payment Bill
This bill, carried by Fiona Ma and crafted with and sponsored by the California Apartment Association, provides that in San Francisco and other rent-controlled communities, a landlord cannot be forced to pay more than $275 per day plus actual moving expenses for temporary relocation of a tenant in order to make repairs or capital improvements to the unit. The landlord has the option to provide a comparable dwelling unit and pay any actual moving expenses in lieu of the daily compensation rate. The tenant shall remain responsible for the payment of rent.
The objective of AB 1925 is to establish a “reasonable” standard and to thwart egregious relocation payments that ultimately discourage landlords from making repairs and improvements to their property. San Francisco law currently requires rental property owners to pay $5,101 per tenant in each unit, up to $15,304 per unit, when the landlord needs to temporarily move their residents out to make repairs, even if the repairs take only 24 hours. Additional fees apply for disabled tenants, tenants over 60, and tenants with children under 18.AB 1925 establishes a reasonable standard for the temporary relocation of tenants and its passage last week was a big win for SFAA and CAA members.
- Are your tenants having trouble paying rent?
There are rental assistance programs available through the Human Services Agency and local non-profits that could help your tenants make their rent on time and could help you avoid an unlawful detainer proceeding. To learn more, download the HSA Rental Assistance and Rent Subsidy Programs summary and the Direct Rental Assistance Program guidelines.
- Governor Signs CAA Sponsored Tenant Relocation Bill
On Friday, September 7, Governor Brown signed AB 1925 (Ma and Yee – D-San Francisco) legislation that provides that in San Francisco a landlord cannot be forced to pay a tenant household more than $275 per day plus actual moving expenses (if it is necessary for the landlord to move the possessions of the tenant household) for temporary relocation. The landlord will have the option to provide a comparable dwelling unit and pay any actual moving expenses, in lieu of the compensation daily rate. The tenant shall remain responsible for the payment of rent. AB 1925 overrides an existing San Francisco law that requires landlords to pay just over $5,000 per tenant to move the tenant out temporarily. This bill is a significant victory for San Francisco owners. (CAA Position: Support)
Also, Governor Brown signed SB 1055 (Lieu – D-Torrance), legislation that prohibits a landlord from requiring electronic funds transfer (EFT) as the only form of rental payment. (CAA Position: Support)
A number of bills of interest to the multi-family housing industry have survived and are on the Governor’s Desk awaiting final action including CAA sponsored AB 1679 (Bonilla – D-Concord), legislation that allows property owners to deposit any remaining portion of the security deposit directly to a bank account designated by the tenant and allows property owners to provide a copy of the itemized security deposit statement along with supporting documents to an e-mail account provided by the tenant. Current law only allows the return of the check and the supporting documents by first class mail. (CAA Position: Support).
For a final look at bills that made it to the Governor’s desk or failed passage, please click here. (updated 9/11/12)
- Redesign of the business tax system
At the request of the Mayor and Board of Supervisors President, the Controller’s Office has been working with the Treasurer’s Office, the City Attorney’s Office, and local businesses on a redesign of the City’s business tax system. Please review the most recent proposal and how it would affect your properties or business (Gross Receipts Fees and Gross Receipts Rates). (updated 7/24/12)
- Condo conversion
Supervisors Mark Farrell and Scott Weiner have introduced legislation at the San Francisco Board of Supervisors meeting to allow any building that either participated in or could have qualified for the 2012 condo lottery to convert to condos, provided that a specified fee is paid. Read more here (see item 120669). (updated 6/12/12)
- Five or fewer parking spaces
Supervisor Scott Weiner has sponsored and introduced legislation to simplify the requirements and administrative fees and work for individuals renting 5 or fewer parking spaces to non-residents. The legislation will exempt people who rent 5 spaces or less to non-residents from requirements to: obtain a certificate of authority, make monthly tax prepayments, obtain a parking tax bond, pay the Revenue Control Equipment compliance fee. The legislation will also offer an amnesty from parking taxes, interest, penalties and fees owed for tax periods more than 2 years before the date the legislation goes into effect. Read more here and here. (updated 6/6/12)
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Bills CAA is supporting
Referred to as a “common sense” bill by the Assembly Judiciary Committee, CAA sponsored AB 1679 (D-Bonilla) has successfully moved unanimously out of the Judiciary Committee and off the Assembly Floor. This bill permits a landlord and a tenant to mutually agree to have the landlord return a security deposit through an electronic transfer into the tenant’s bank account and to deliver an itemized security deposit statement by email to the tenant.
Current law is very stringent in its requirement that any remaining security deposit and itemized statement must be provided by the landlord to the tenant personally or by first-class mail, postage prepaid. The requirement to return a security deposit by a physical check was first placed in statute decades ago, long before the advent of modern technology, electronic fund transfer options, and email. Today, more tenants are asking that the landlord return any remaining security deposit directly into their bank account.
CAA’s Legislative Steering Committee has met and taken a support position on a number of quality bills that will have a positive impact on the rental housing industry if signed into law. Here is an overview of those bills.
AB 2521 (D-Blumenfield) – Landlord-Tenant: Personal Property - AB 2521 provides that the landlord may retain or dispose of a tenant’s property that is left behind after move out if the landlord reasonably believes that the total resale value of the property is less than $700. Current law is $300.
SB 1055 (D-Lieu) – Rental Payments: EFT - SB 1055 would prohibit a landlord from requiring electronic funds transfer (EFT) as the only form of rental payment. The bill allows for other forms of payment, including EFT.
AB 1610 (R-Wagner) – Special Access: Liability - AB 1610 would give businesses a specified period of time to address and possibly correct special access (ADA) violations without fear of litigation. AB 1878 (R-Gaines), AB 2325 (R-Norby), SB 1163 (R-Walters), and SB 1186 (R-Dutton) all provide similar protections.
- Carbon monoxide regulations in 2011 and 2013
California’s Carbon Monoxide Poisoning Prevention Act of 2010 requires that all residential property be equipped with a carbon monoxide detector when the property has a "fossil fuel" burning heater or appliance, fireplace, or an attached garage. The law provides that:
- All single-family homes, including individually-owned condominiums, (owner or tenant occupied) must be equipped with a detector.
- All other residential units must be equipped with a detector on or before January 1, 2013.
A carbon monoxide detector may be battery powered, a plug-in device with battery backup, or hard-wired into the dwelling unit with a battery backup.
“Fossil fuel” is defined as coal, kerosene, oil, wood, fuel gases, and other petroleum or hydrocarbon products, which emit carbon monoxide as a byproduct of combustion.
Get more details here. Read the carbon monoxide detector requirements for new construction and units undergoing alterations here.