SF Apartment : January 2018


In Short Order

by Charley Goss

The City of San Francisco has been working to regulate short-term rentals via platforms like Airbnb and Homeaway for quite some time now. As of this writing, the city seems to be in a good place to enforce its laws against the proliferation of illegal short-term rentals. Last year, the San Francisco Board of Supervisors passed an ordinance that would hold the web-based platforms accountable for illegal short-term rentals (rather than short-term rental hosts).

Short-term rentals are generally illegal if they are conducted in violation of city law. Illegal short-term rentals are typically listings that go above the daily amount allowed per year by the city, listings posted by rent-controlled tenants in violation of their lease agreements, or entire buildings or units being used as full-time short-term rentals. The San Francisco Apartment Association worked with a broad coalition of stakeholders, known as ShareBetter SF, to pass the ordinance, addressing SFAA members’ concerns that tenants were able to “Airbnb” their apartments with impunity. In response, Airbnb promptly sued to overturn the ordinance, arguing that they should not and could not be held accountable for the illegal short-term rental listings from which they profited.

After several weeks of litigation, this past spring, the City of San Francisco entered into a settlement agreement with Airbnb. The city agreed to streamline the registration process for legal short-term rental hosts in exchange for Airbnb agreeing to list only legal, registered short-term rentals on their website and to share information with the city about its legal short-term rental listings. Airbnb also agreed to remove illegal San Francisco listings from its website over the course of 2017.

By all accounts, the settlement was a victory for the City of San Francisco. After years of debate over how to regulate short-term rental use at the San Francisco Board of Supervisors, and after multiple iterations of ordinances proved difficult to enforce against abusers of the short-term rental framework, the city finally had found a way to require the platforms to only list legal and registered short-term rentals. This settlement aids the city with enforcement and makes it difficult for individuals—tenants or property owners—to evade the short-term rental laws. The effect this will have for SFAA members is that their tenants will not be able to post their rent-controlled units on short-term rental sites, giving building owners peace of mind and more control over illegal subletting and giving strangers access to their property, while also aiding the city’s goal to return entire units and buildings that had been illegally converted into full-time hotel rooms back to the long-term rental housing market. San Francisco’s Office of Short Term Rentals has already begun removing many of the unlawful short-term rental listings online, and it will continue to do so until December 31, 2017.

By the start of the new year, only valid, legal and registered short-term rental units will be allowed to be posted to Airbnb, and your tenant won’t be able to put their apartment up for rent while they’re out of town for the weekend.

Recreational Marijuana

In November 2016, California voters approved Proposition 64 to legalize recreational marijuana use by a margin of 56% to 44%. In San Francisco specifically, voters were much more enthused by the idea of imbibing at a cannabis bar instead of a wine bar after work on Fridays, voting in favor of Prop 64 by an overwhelming 73%. Over the past year, the City of San Francisco has been grappling with how to implement the will of the voters while at the same time regulating the cannabis industry, cannabis cultivation and cannabis storefronts before recreational use officially becomes legal on January 1, 2018. This update will focus on the use of recreational cannabis in your apartment buildings and common areas, and how recreational cannabis use in apartments differs from medicinal use in apartments.

Many SFAA members, along with property owners citywide, use lease agreements that prohibit smoking. The SFAA lease, the most frequently used rental agreement in San Francisco, for instance, states (in part): “Smoking of any substance is not permitted in the Premises or in any common area of the Building.” This prohibition is valid and remains enforceable in your apartments moving forward, despite the approval of Prop 64.

This means that any tenant who has signed a no-smoking rental agreement remains unable to smoke recreational marijuana in their apartment after January 1, 2018. Conversely, some property owners have long-term tenants with lease agreements that do not expressly prohibit smoking. Because San Francisco law essentially prohibits property owners from changing the terms of tenancy in existing lease agreements, this means that any tenant with a lease agreement that allows (or does not explicitly prohibit) smoking, can smoke cigarettes in their apartment, and after January 1, will also be allowed to smoke recreational marijuana in their apartment.

To understand your ability (or lack thereof) to enforce no-smoking provisions in your building, it is also important to differentiate between recreational marijuana consumption and medicinal marijuana consumption. Many of our members have had the experience of attempting to enforce no-smoking provisions against a resident, only to find that the resident has a medicinal cannabis card, and thus is able to smoke marijuana in their apartment based on their medical need for it.

While your no-smoking provisions are enforceable to prevent the smoking of newly legalized recreational smoking of marijuana, residents with a doctor’s recommendation will still be able to smoke medicinal marijuana in apartments with no-smoking tenancies. Because fair housing and ADA laws require property owners to make reasonable accommodations to the medical needs and disabilities of tenants, property owners are expected to accommodate the medical need or disability for which the tenant’s medical marijuana card was prescribed, and thus are expected to allow their tenant to smoke marijuana in their apartment, in exactly the same way that the tenant’s doctor’s note allowed them to smoke on the premises before Prop 64 passed.

The intersection of medicinal marijuana laws, recreational marijuana laws, fair housing and ADA laws, and landlord-tenant law and the warranty of habitability causes confusion for many property owners in the Bay Area and beyond, and understandably so. However, despite a tenant’s ability to smoke medical marijuana in spite of no-smoking provisions, tenants still are not able to create a nuisance for other tenants in the building. This means that even if a tenant is allowed to smoke on your property, they are not able to do so to the extent that they are disrupting the “quiet enjoyment” of other residents on the premises. If you are getting complaints about another resident lawfully smoking either recreational or medicinal marijuana in your apartment, you should frame the complaint as a nuisance issue, rather than a lease violation for smoking, and explain that the resident is bothering other residents in the building. You can ask them to step outside, have an edible or use a vaporizer instead, or use a fan to help air out the smell in the future.

Charley Goss is the Government and Community Affairs Coordinator for the San Francisco Apartment Association. He can be reached at 415-255-2288, ext. 14.