SF Apartment : February 2016


Prohibiting the Party

by Various Authors

Q. The lease allows tenants to use the roof deck, but I want to prohibit this because there have been too many parties with noise and drinking. Can this be prohibited now? Can it be prohibited on new leases as new tenants come in?

A. The second part of your question is easier to answer than the first. There is no question that you could forbid use of the roof deck to new tenants. Regardless of what the rights of the old tenants are, you can change the rules and the amenities offered to new tenants—either increasing or decreasing these—so long as you are not engaging in discrimination based on some suspect class such as race, ethnicity, sexual orientation, age and the like.

The issue with regard to current tenants becomes a little dicier for rent controlled units. Under Rent Ordinance Section 37.2(r), amenities such as a roof deck are considered housing services that are an integral part of the premises. Certain of those services, like the one in question, cannot be severed without just cause under the ordinance. Even where they are severed with just cause, the tenants who lose the housing service are generally entitled to a reasonable rent reduction, though an argument can be made this should not apply to a tenant who is probably losing the service because of his or her own abusive conduct.

In this case, I think you have just cause, because of the noisy parties and drinking. This suggests both an interference with the safety, comfort and enjoyment of the other tenants as well as nuisance. One must also wonder whether continued use of the deck might actually result in death or serious injury from some intoxicated individual falling from the roof. The greater the danger, the more justification for removal of the use of the deck. Even without danger, if the noise is significant enough, the housing service can be severed. Of course, the question immediately arises whether you have first taken less severe steps to resolve the problem—for example, by forbidding parties on the deck—and despite that, the problem has persisted.

The next step is to consider what a reasonable rent reduction would be for loss of use of the deck. You can sever the housing service of the deck to month-to-month tenants with a Thirty-Day Notice of Change of Terms of Tenancy, but included in that should be a reasonable rent reduction. The rent reduction would probably be the same for each unit, regardless of the amount of rent the tenant is paying, because the housing service is the same. Of course, if there are tenants that don’t use the deck at all, or their use is insignificant, they may not be entitled to any rent reduction.

Any tenants who feel they have not received an adequate rent reduction can petition the San Francisco Rent Board to set one. And, as with any reduction for withdrawal of a housing service, if the landlord doesn’t like the amount of the withdrawal, the landlord can appeal or can restore the housing service. Once the housing service is restored, the rent goes back up to what it previously was on a Thirty-Day Notice from the landlord.

—Saul M. Ferster

Q. If co-owners purchase a rent controlled building which has one vacant unit, and one of the owners moves into this unit, may the other owner use the “owner move-in” to move into another unit? Would it make any difference if these two co-owners were close relatives?

A. The short answer is “yes,” but let’s delve into the details. In 1998 the owner move-in (OMI) laws changed to allow only one owner move-in eviction per building—and once that unit is OMIed, it becomes the owner-occupancy unit for the life of the building. This means that all future OMIs must be directed towards that unit, unless the landlord obtains permission from the San Francisco Rent Board to OMI another unit in the building. Thus, pre-1998, any number of owners who held a 25% recorded interest in the property could do an OMI, yet now only one owner with at least a 25% recorded interest may do so—no matter how many other co-owners or tenancy-in-common (TIC) partners have an interest in the building.

Interestingly, the law permits an unlimited number of relative move-ins, provided that the owner is living or simultaneously seeking to live in the building as a principal place of residence. This means that an owner who lives or is seeking to live in the building may do unlimited relative move-in (RMI) evictions for close relatives: grandparents, parents, siblings, children, grandchildren, the spouse or domestic partners of these relations or the landlord’s spouse/domestic partner.

In the particular instance described in your question, one unit is vacant—so its occupancy by a co-owner does not count as an OMI. Keep in mind, though, that when the other owner does the OMI on the occupied unit, that apartment must be occupied as the evicting owner’s principal place of residence for at least the next three years. It makes no difference that the evicting owner is a close relative of the other owner who moved into the vacant and available unit. Yet what may make a difference is if no one really moves into the vacant unit, and the tenants can show that their displacement is not necessary because the ownership really intends to rent the vacant unit at market rate in the near future. In order to do an OMI or RMI, the landlord must legitimately represent that no other unit is vacant or available for that landlord’s or relative’s use.

Before initiating these types of evictions, the following should be considered. First, certain tenants in multiunit buildings are “protected,” meaning they cannot be displaced for an OMI or RMI. A protected tenant is someone who is disabled and has lived in the apartment for ten or more years, someone who is 60 years or older and has lived in the apartment for ten or more years, or someone who is catastrophically ill and has lived there for five or more years. (RMIs for relatives 60 years or older may trump these protections, but no such elderly exception exists for OMIs.) In addition, tenants who have school-aged children generally cannot be displaced during the school year.

Second, all tenants have the right to contest in court any OMI or RMI. The primary defense is that the owner seeking to evict is not acting in good faith, has ulterior motives and/or is proceeding with dishonest intentions. Landlords sometimes believe that there is a “right” to do an OMI/RMI. That is incorrect. While you may qualify to perform this type of just cause eviction, the tenant may decide to challenge you in court and have a jury decide the matter. If the court or jury finds that there are no honest intentions (for example, if this unit was chosen because the tenants are paying low rent and the owner wants to improve the building’s valuation), then you will be precluded from recovering possession of the apartment.

Third, the OMI/RMI process requires tenants to be given relocation payments, which currently stand at about $5600 per tenant and an additional $3800 for any tenant who is elderly or disabled or who has minor children living within the household (these amounts are adjusted every year).

Finally, if the OMI or RMI unit is rented at any time within five years after the eviction occurred, the rent charged may be no greater than what the departing tenants were paying when they vacated.

In sum, OMI and RMI evictions are very complex and have serious consequences for the property (some of which were not even discussed in this brief synopsis), so never undertake these proceedings without a qualified attorney acting on your behalf.

—Dave Wasserman

Q. When a senior tenant over 65 years old loses financial capacity to pay the rent, what correct action can the owner take?

A. “Capacity” can mean a variety of things, especially in the legal world. In particular, financial capacity can refer to the ability to exercise money management decisions. Sometimes with advanced age, mental faculties start to diminish, and a person may no longer have the mental capacity to manage his or her financial affairs. In such cases another person, such as a conservator or attorney-in-fact may have the legal right to act on behalf of the incapacitated person. Accordingly, this other person may be legally responsible for managing financial affairs and even paying the rent on behalf of an incapacitated tenant.

As most SFAA members are aware, landlords should never accept rent payments from third parties. The situation described in this question, however, may be one exception to that rule. Fair housing laws require landlords to reasonably accommodate tenants with disabilities. And accepting a rent payment tendered by a legal representative of an incapacitated tenant would most likely be considered a reasonable accommodation.

If you are faced with such a situation, you should confirm that the person does, in fact, have the legal authority to act on behalf of the incapacitated tenant. For instance, you may request a copy of the legal document establishing the legal authority, such as a court order appointing a conservator of the estate of the incapacitated tenant, or a durable power of attorney document authorizing an attorney-in-fact. And you should make it expressly clear that under these circumstances, any rent payment will only be accepted on behalf of the incapacitated tenant as an accommodation, and is not intended in any way to establish a tenancy or right to occupy. It would still be a good idea to consult with an attorney before accepting any third-party payment.

If the tenant is unable to pay the rent and does not have someone to help manage his or her finances, then the landlord may have a basis to evict the tenant. The payment of rent is a material term of a residential tenancy, and a tenant’s incapacity or inability to pay the rent does not excuse the obligation to pay it. In such case, the landlord may serve the tenant with a three-day notice to pay rent or quit. And if the landlord is concerned that the tenant’s condition is a danger to himself or herself or to others, then the landlord may notify local authorities such as the police and social services.

—Steven C. Williams

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. Steven C. Williams is with Fried & Williams, LLP and can be reached at 415-421-0100.