Legal Q & A
Pressed for Space
Proceed with caution (or not at all) when decreasing services to build Accessory Dwelling Units.
Q. I’d like to add an ADU to my four-unit building. By doing so, I’d be taking away parking spaces from the current tenants. Is this legal?
A. Using tenant-occupied parking to create Accessory Dwelling Units is a highly contentious intersection of the Rent Ordinance and Planning Code. ADUs are exceptions from the Planning Code’s normal dwelling unit density limits and are generally constructed within an existing building envelope. The Planning Department will not let you build accessory dwelling units out of space from an existing one, so these usually end up in first floor garage/storage space.
A 2006 amendment to the Rent Ordinance requires the same “just cause” for removing “housing services” (like parking) as required to terminate the tenancy itself. Of course, the city never legislated how to “evict” a portion of a rental unit (like the parking). Adding to your troubles, a non-fault eviction (e.g., Ellis/OMI) disqualifies you from ADU permits, if you try to take back the entire rental unit.
Interestingly, the city created a single exception for temporary severance of housing services in conjunction with the city’s recent seismic retrofit mandate. The soft story program offers certain boons for ADU work, which is usually done in the same space. However, I repeat that this is a “temporary” severance.
Landlords are often tempted: get the seismic permits, serve the severance notice, get the cars out, do the ADU work, don’t let the cars back. And mechanically, this works out, as the ADU permits are exempt from the Planning Code’s normal notification requirements, so a tenant may not notice that you’re petitioning Planning to take over their space. (On the other hand, even a “rubber stamp” for the ADU work isn’t approval to take away housing services. The Planning Commission may impose conditions for approval that accommodate existing housing services.)
In theory, a landlord could obtain both permits, vacate the space, then send formal notice changing the terms to remove parking from the lease, lowering the rent to compensate. This may only leave tenants with the remedy of petitioning the Rent Board for a further reduction. However, this aggressive approach might also provoke a lawsuit to enforce the kinds of rights the Rent Ordinance is designed to protect.
If you’re not doing seismic work along with the ADU construction, there is technically no mechanism to do this coercively. Instead, you might negotiate with your tenant: offer a different space in the same building, offer to reduce their rent if they’ll voluntarily give up the space, or even offer to pay for a spot down the street, if you can find one. Without an agreement, your options are more attenuated. Depending on your business plan, you could explain the Ellis/ADU “catch 22” to your tenant, but threaten to empty the whole building and sell off the units if your tenant won’t sell his space. You could also pressure your Supervisor for a legislative change. The choice to protect housing services was a common sense way to avoid “inverse evictions,” but we’re starved for housing units and the current law prioritizes cars over people.
(To learn more about “decrease in services” lawsuits, see the “Two Sides, One Coin” column on page 42.)
Q. Tenants in my duplex have been arguing for a year. The upper unit consists of a family with two young children. The lower tenant complains almost daily (to me and the family) about the kids making noise. The upper unit is carpeted, and the parents claim the kids are at daycare from 8:30 - 5:30 on weekdays, and that they’re sleeping from 8:00 pm to 7:00 am every night. I’m at my wit’s end. What can I do?
A. You can, and should, make a serious effort to help resolve this problem between your tenants. Not only will it cause them to stop bothering you, but it will help shield you from liability in the event one (or both) sets of tenants alleges legal damages based on your failure to take action. I know of more than one property owner who has been sued for constructive eviction when one tenant vacated rather than face continuing disturbances from another tenant.
You have two areas of focus, the people and the property. Regarding the people, it is best to be fair and impartial while also applying pressure to correct any clear wrongdoing. If face-to-face, phone, or email communications do not achieve the desired result, you should send both units a letter encouraging them to do their best to avoid conflicts and respect each other. If you do not feel like they are listening to you or responding with sufficient concern, you should consider retaining an attorney to write a letter on firm letterhead; sometimes tenants need their landlord to take this step to be taken seriously.
If their lease agreements have a clause regarding nuisance behavior at the property, you can remind them that they agreed to refrain from disturbing their fellow tenants. You should encourage them to use the services of a local dispute resolution service if they have difficulty resolving the dispute on their own, or volunteer to attempt to facilitate the changes necessary to permit them to live in peace. You can suggest that the upstairs tenants remove their shoes while inside, and ask both units for suggestions.
Regarding the property, you should inspect (or hire a professional to inspect) the units to identify likely causes of noise pollution and potential steps to take to reduce the transmission of sound from upstairs to downstairs. (This is also a good time to make sure the upper tenants are not using the hallway as a bowling alley or the living room as a gymnastics studio.)
Although the upper unit is carpeted, the carpet pad, if any, is probably not ideal. Most standard carpet pads are engineered for comfort, with only minimal, incidental reduction of the sound of children jumping off the furniture. You should look for carpet underlays engineered for reduction of sounds transmitted through the air, which reduce both impact and air-based sound transmission, and decide whether you would rather spend that money on sound reduction—or a much larger sum resolving a lawsuit.
Q. I gave 60 days notice for a lawful rent increase by mail and email to my tenants. The tenants seemed to have ignored the increase, as they’re continuing to pay the previous rent amount. How can I get them to pay?
A. I need to make a few assumptions. The first assumption is that the lease is currently a month-to-month lease. The reason the lease needs to be month-to-month is because you cannot increase the rent until the lease term has expired.
With rent-controlled units, a property owner may increase a tenant’s base rent once every 12 months by the allowable annual rent increase (or CPI). The San Francisco Rent Board publishes this amount each year, effective the following March 1st.
The property owner must give at least 30 days written notice of the proposed annual rent increase for rent increases below 10%. A 60-day written notice needs to be given for any rent increases that are 10% or more.
San Francisco requires that the notice state the portion of the rent increase that reflects the annual increase, and/or banked amount, if any, the portion of the rent increase that reflects the costs of capital improvements, rehabilitation, and/or energy conservation work, the portion that reflects the passthrough for charges for PG&E, and/or the portion that reflects the amortization of a RAP loan. All tenants and persons claiming a right to possession must be named in the rent increase notice.
If the required information is not provided, the rent increase is null and void. Assuming there are no issues with the rent increase notice itself, the next step is properly serving the notice.
A rent increase notice can be served by 1) delivering a copy to the tenant personally, or 2) sending a copy by regular mail addressed to the tenant. If the notice is being served by regular mail, you need to add five days to the expiration of the notice. Typically, we recommend that an unsigned certificate of mailing be attached with the rent increase notice. After the notice is mailed, then sign the certificate of mailing and keep it for your records. This is a written document showing how and when the notice was served on the tenant.
Assuming there are no issues with your rent increase notice and service of the notice, 1) you should notify your tenants by letter that they have not paid the complete rent and request that they pay the complete amount or you will initiate an eviction proceeding against them, or 2) issue a 3-day notice to pay rent or quit. The amount stated in the 3-day notice should be the difference between the previous amount and the current amount of rent.
If your tenants do not pay the rent owed or do not vacate within the 3 days, then you may have grounds to file an eviction lawsuit in court. You should consult an attorney to ensure compliance with state and local laws.
The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Justin A. Goodman is with Zacks, Freedman & Patterson, P.C. and can be reached at 415-956-8100. David Semel and Angelica A. Sandoval are with Fried & Williams LLP and can be reached at 510-625-0100.