SF Apartment : September 2017


Owner Move-In Eviction Update

Mayor Ed Lee signed amendments to the owner move-in eviction ordinance. The new reforms were written by Supervisor Mark Farrell, with help from Supervisors Aaron Peskin and Jane Kim, after a series of these evictions proved to be fraudulent.

The basis of the law remains the same: San Francisco property owners can legally evict tenants if they or a relative plan to inhabit the apartment, however, the restrictions and penalties are steeper. The updates, provided by Clifford Fried of Fried & Williams, LLP, are as follows:

Commencing January 1, 2018, all OMI notices terminating tenancy must include a form prepared by the Rent Board so that the tenant can keep the Board apprised of any future change of address. This way, the Board and the landlord can find the tenant to tell them their rights.

A landlord who recovers possession because of an OMI eviction, on or after January 1, 2018, must complete a Statement of Occupancy (SOO) under penalty of perjury on a form prepared by the Rent Board. The SOO must disclose certain information including the date that possession was recovered and proof that the landlord or relative occupies the unit. The landlord must file the SOO with the Board within 90 days after the date of service and shall file an updated statement every 90 days thereafter. Once the landlord has recovered possession, the landlord must file updated statements once a year for five years.

A landlord’s failure to file a timely SOO carries an administrative penalty in the amount of $250 for the first violation, $500 for the second violation, and $1,000 for every subsequent violation.

The law has always required that the landlord undertake the OMI eviction in good faith. Good faith is now defined to include the landlord:

  1. not filing the notice of termination of tenancy with the Rent Board,
  2. or relative not moving into the unit within three months after the landlord recovered possession and then occupying the unit as their principal place of residence for 36 consecutive months,
  3. or relative lacking a legitimate, bona fide reason for not moving into the unit within three months after recovering possession and/or then not occupying the unit as their principal residence for a minimum of 36 consecutive months,
  4. not filing a SOO with the Rent Board,
  5. violating the law by renting the unit to a new tenant at a greater rent, and
  6. such other factors as a court or the Rent Board may deem relevant.

Until now, the statute of limitations for a tenant to sue a landlord for a wrongful OMI eviction was one year from the date the tenant discovered the wrongful conduct. Now, the new law provides that the tenant or Rent Board may bring an action no later than five years after the date the landlord files the first SOO, or three months after the landlord recovers possession, whichever is earlier.

Effective immediately, if a landlord re-rents a unit within five years after serving an OMI notice, the rent is fixed at what the old tenant was required to pay. Previously, there was only a three-year limitation on adjusting rent to new tenants. The change establishes a five-year vacancy control after an OMI eviction.

For OMI notices served on or after January 1, 2018, any landlord who within five years of service of the OMI notice decides to rent again must first offer the unit to the displaced tenant. The landlord must file the offer with the Rent Board within 15 days of the offer. For notices served before January 1, 2018, the offer to the displaced tenant must be made if the unit is offered for rent within three years and the offer need not be filed with the Board.

For OMI notices filed after January 1, 2018, the Rent Board will send a notice to the unit stating the maximum rent for that unit and updated notices approximately once a year. The purpose of this notice is to let new tenants know if the rent charged following an OMI eviction is proper.

It is illegal to charge a tenant an excessive rent within five years after serving an OMI notice. A landlord who rents a unit within five years of serving a notice is advised to consult with a landlord attorney first. Each month that a landlord charges an excessive rent shall constitute a separate violation of the law.

Tenant remedies for violations of the law have increased under the amendment. A tenant is now expressly entitled to injunctive relief and treble damages for excessive rents collected after an OMI unit is re-rented.

Perhaps the most disturbing change in the OMI law is a provision that encourages certain tenant law firms—those with a primary mission of protecting the rights of San Francisco tenants—to sue landlords who violate any aspect of the OMI laws. Even without the displaced tenant’s participation or approval, a landlord can get sued by one of these tenant lawyers. It is unclear who is entitled to the recovery  of damages in a lawsuit brought by the tenant lawyer.

The amendment to the OMI laws will discourage owners and their relative from asking tenants to move. Any landlords contemplating an OMI eviction should hire experience legal counsel before serving a notice to vacate and before ever re-renting a displaced tenant’s unit.

Vacancy Tax

Supervisor Aaron Peskin is urging the city to consider legislation that would penalize property owners for keeping units vacant. The vacancy tax would include both residential and commercial properties. According to Supervisor Peskin, his call to impose a vacancy tax is in response to complaints he’s received about vacant buildings (or “ghost buildings”).

Currently, owners of unoccupied or abandoned buildings in San Francisco are required to register with the city and pay an annual fee of $711. This registry relies on self-reporting and there are 38 residential and 47 commercial properties on the list, according to the SF Chronicle. This would remain separate from the vacancy tax Supervisor Peskin is proposing.

At the time of a 2014 SPUR study, there were 30,000 vacant units in the city. Of which, 8,900 units were in the process of being rented, 2,400 were units in the sale process, and 9,100 units were categorized as seasonal or vacation homes. Opponents of the vacancy tax say there is no guarantee the tax would bring more units to the rental market.

Earlier this year, Vancouver imposed a similar ordinance called the “empty homes tax,” which taxes property owners 1% of their property’s assessed value if not occupied for at least six months of the year. The law is enforced by tracking electricity use. Cities in France, the UK, and Australia have imposed similar laws.

Senate Bills in the Pipeline

Governor Jerry Brown announced plans to focus on California’s housing crisis after the summer recess. The following bills are being considered to increase funds and decrease restrictions for affordable housing development.

Senate Bill 2: Authored by Senator Toni Atkins (D-San Diego), this bill would increase the fee on certain real estate transactions by $75, which would generate approximately $225 million annually for state subsidies. The fee would be added to deeds and mortgage refinances, but home and property sales would be exempt.

Senate Bill 3: Authored by Senator Jim Beall (D-San Jose), this bill would bring a $3 billion general obligation bond for low-income and transit-oriented housing. The bill will be brought to voters in the November 2018 election.

Senate Bill 35: Authored by Scott Weiner (D-San Francisco), this bill would streamline the approval process for new construction.

City and State Electronic Vehicle Legislation

Assemblymember Phil Ting announced AB 1184, a new bill to promote the use of electronic vehicles. The bill would allocate $3 billion for rebates for electronic vehicle buyers and the installation of charging stations.

In San Francisco, Mayor Lee and Supervisor Tang introduced legislation that would require new residential, commercial and municipal property owners to plan for charging infrastructure in the parking lots, potentially accessible to every parking spot in the lot.

Specifically, the ordinance would require that 10% of parking spaces be designated for electrical vehicles (EV) and an additional 10% be designated for potential EV charging and upgrades. The remaining 80% of the parking lot would be required to be “EV capable,” which means that every parking spot would be able to reach the charging infrastructure by using conduit tubes.

Soft-Story Retrofit Reminder

The September deadlines for the Mandatory Soft Story Retrofit program are quickly approaching. Please do not delay. Take the next step to ensure your property, and your tenants, are better protected by complying with San Francisco’s Mandatory Soft Story Program (MSSP). Failure to submit permits and plans to DBI by the deadline will result in code enforcement action and monetary penalties.

Tier-One Soft Story Property Owners: If you are a property owner of a building containing educational, assembly, or residential care facility uses (Building Code Occupancy E, A, R2.1, R3.1, or R4), your completion of work and issuance of certificate of final completion is due September 15, 2017.

Tier-Three Soft Story Property Owners: If you are a property owner of a multi-unit building with three or more stories, five or more units, your permit application must be filed with the Department of Building Inspection by no later than September 15, 2017, which is only about one month from now. You also may be able to add accessory dwelling units to your property when performing a seismic retrofit.

For more information, visit www.sfdbi.org.

SFAA Centennial Save the Date

The San Francisco Apartment Association is celebrating the organization’s 100 years of supporting the rental industry on Thursday, November 9, 2017 from 6:00 – 9:00 p.m. The cocktail hour, formal dinner, and dancing will be held at The Ritz Carlton, 600 Stockton Street in San Francisco. To purchase tickets or sponsor the event, click here or contact Vanessa Khaleel at 415-255-2288 or vanessa@sfaa.org. For more information on event sponsorship, click here.

SFAA Website Revamp

The SFAA has upgraded and redesigned its website for a better user experience. Members can now more easily access forms, register for events and classes, view videos of member meetings, browse the magazine, and review the vendor directory, among other improvements.

SFAA July Member Meeting

The July 17th SFAA member meeting was held at the Jewish Community Center in Kanbar Hall. The meeting began with the monthly Legal Q & A, moderated by Dave Wasserman of Wasserman & Stern, followed by a welcome from Eric Andresen, SFAA Board President. SES Restoration sponsored the event.

The meeting then moved on to a presentation by Mohammed Nuru, Director of the San Francisco Public Works. Nuru gave an overview of the new legislation regarding street tree and sidewalk maintenance, road repair, and graffiti. The presentation concluded with a Q&A.

For handouts and footage from the member meeting, click here.