SF Chronicle Reports on Court of Appeal Reversal of Ellis Act Judgment for Property Owner so Jury Can Hear Evidence of Alleged “Sham Transfer” to Co-Owner

The San Francisco Chronicle reports on a recent unpublished ruling from Division Five of the First District Court of Appeal, reversing a judgment in favor of an Ellis Act-invoking landlord, on the basis that the trial court improperly excluded evidence of a “sham transfer”.

The Ellis Act requires property owners to withdraw all “accommodations” (i.e., residential rental units) from the market and to terminate all such tenancies. A landlord may not terminate some accommodations and leave others. (This is a common sense rule that allows a landlord to “go out of business” but not to evade rent control by evicting low-paying tenants and keep the market rate ones.)

In Coyne v. De Leo, the owner (Coyne) invoked the Ellis Act on a four-unit building with a single “tenant”. Other units were occupied by family members and friends – including one friend, Maria Esclamado, who was a former tenant until Coyne made her an owner so that she could participate in the Ellis withdrawal and remain in her home.

The tenant (De Leo) wanted to introduce evidence about this “transfer of ownership” to the jury. He argued that the transfer – with seller financing, a monthly payment conspicuously similar to the former “rent” payment, and an eventual “quitclaim deed” back to Coyne when she moved – was suspicious.

The Chronicle quoted Coyne’s attorney, Justin Goodman, as saying that Esclamado “received title to the property and had all the benefits of title” while “Martin (Coyne) took all the risks”, predicting that Coyne would prevail at a retrial even with the evidence that was previously barred.

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San Francisco Legislative Update (2018): San Francisco No Longer Allows Increased Debt Service and Property Tax Passthrough Rent Increases

Seal_of_San_Francisco

San Francisco has passed Supervisor Fewer’s proposal to eliminate “debt servicing” passthroughs to tenant’s rental rates. In general, a landlord can only increase the rent for tenants in rent-controlled apartments by a limited amount (which, in San Francisco, is a 60% of the increase in the consumer price index, as published by the US Dept. of Labor, in the preceding year). As of this post, for instance, this “annual allowable increase” is 1.6% of the tenant’s “base rent”.

To avoid confiscatory results of price controls, however, the Rent Ordinance has allowed additional increases based on things like utilities, taxes, capital improvements and… debt servicing. However, Supervisor Fewer aimed to close a perceived loophole in this rule, where owners would load a property with debt for the specific purpose of increasing the rental rate.

Ordinance 132-18 amends Rent Ordinance Section 37.8 (“Arbitration of Rental Rate Adjustments”) to prohibit rent increases based on increased debt.

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Oakland Now Regulates “Tenant Move-Out” Agreements

Oakland now regulates agreements between landlords and tenants to pay consideration to voluntarily vacate rental units (commonly known as a “buyout agreement”). Oakland joins Los Angeles, Berkeley, Santa Monica and San Francisco in enacting these regulations.

As with other jurisdictions, registration is a two-step process, where the landlord provides a pre-move out disclosure to the tenant and then executes a “negotiation disclosure” to file with the Rent Adjustment Program prior to commencing negotiations.

Tenants have a right to rescind for 25 days after execution (which may be as short as 15 days, if agreed to by the parties), and they must receive notification of the context of these negotiations and agreements, like the fact that they would receive relocation assistance payments for non-fault evictions, that rent on the open market is generally higher, and that buyout payments may be taxable.

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Supervisors Peskin and Fewer Introduce Legislation Supporting CA Prop. 10 – the Repeal of the Costa-Hawkins Rental Housing Act

Supervisors Peskin and Fewer have introduced legislation for San Francisco to “support for full repeal of the Costa-Hawkins Rental Housing Act, which would enable policymakers across the State to confront the housing affordability crisis by expanding rent control, enacting and implementing vacancy control, and taking other critical steps to stabilize neighborhoods and communities across the State of California”.

Currently, local governments are permitted to set price controls for rent, with some exceptions for single family homes and condominiums, new construction, and most vacant rental units (unless a landlord has performed a “non-fault” eviction, like an Ellis Act withdrawal or owner move-in eviction). A repeal of Costa-Hawkins would remove those exceptions, allowing regulations like “vacancy control”.

The Costa-Hawkins repeal effort will appear on the November ballot as Proposition 10.

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Justin Goodman Featured in SF Apartment Magazine Legal Q&A for July 2018

Justin Goodman was featured in the Legal Q&A for the July 2018 issue of SF Apartment Magazine – the official publication of the San Francisco Apartment Association.

Justin discussed relative-move-in evictions and the potential defense to an unlawful detainer action based on “tenant retaliation” (even where a tenant is “baiting” the retaliation).


SFAA is dedicated to educating, advocating for, and supporting the rental housing community so that its members operate ethically, fairly, and profitably. SFAA’s is a trade association whose main focus is to support rental owners by offering a wide variety of benefits that address all aspects of rental housing industry.

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Supervisor Ronen Promises New Regulation To Penalize Excessive Rent Increases in Deregulated Rental Units

The SF Chronicle reports that Supervisor seeks to introduce an amendment to the Rent Ordinance that will add to the definition of “tenant harassment” an “excessive rent increase” that is intended to “defraud, intimidate or coerce the tenant into vacating” a rental unit. The proposed legislation would make it “unlawful for a landlord to endeavor to recover possession of a rental unit . . . by means of a rent increase that is imposed in bad faith with an intent to defraud, intimidate, or coerce the tenant into vacating the rental unit in circumvention [San Francisco’s eviction control laws].”

The proposed legislation would address the part of the “venn diagram” of tenant protection law where single family homes are subject to eviction control (if they are built before June 13, 1979) but are exempt from rent control if the tenancy commenced after 1995 (under the Costa-Hawkins Rental Housing Act). The logic of this law is that landlords can increase rents in these units without local restriction, but if they increase rents with the intention of causing their tenants to vacate, then the “real” purpose is to avoid eviction controls, not to get market rate rent.
Continue reading Supervisor Ronen Promises New Regulation To Penalize Excessive Rent Increases in Deregulated Rental Units

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Judge Ronald Evans Quidachay Retires After Nearly 40 Years on the Bench

The Superior Court of California, County of San Francisco, announced today that the Honorable Judge Ronald Evans Quidachay has retired, after serving nearly 40 years on the bench. Most recently, Judge Quidachay sat as the long-serving judge of San Francisco’s Housing Court (“Department 501”), initially designated as the unlawful detainer law and motion department, but eventually expanding to encompass all real property issues. After retiring on June 27, 2018, he was immediately sworn in as a “visiting judge” to resume his law and motion duties as his successor assumes the law and motion department. He is “survived by” his capable staff research attorney, Olga Grecova.

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Multani v. Knight (2018): Second District Court of Appeal Takes Expansive Approach To Discharging Landlord’s Obligations Following Expiration of Rent Demand Notice

Knight argues, and the trial court agreed, that Salima became a tenant at sufferance no later than when Knight filed the unlawful detainer action against her; therefore, she had only the right of “naked possession,” i.e., the right not to be forcibly evicted without legal process. Salima argues that despite her nonpayment of rent, she retained all legal rights as a month-to-month tenant until she was dispossessed following the conclusion of the unlawful detainer action.

In Multani v. Knight, a commercial tenant (Multani) leased a commercial space from Knight, to use as a medical clinic. As she was winding down her practice, her sons contracted to sell to another physician. However, because of medical issues, Multani stopped maintaining the business. Landlord Knight served a three-day rent demand notice, filed an unlawful detainer when it went uncured, and took possession by default.

In the meantime, plumbing problems lead to water damage to the personal property/medical equipment in the clinic. After the default judgment for possession, Multani sued for conversion of the personal property/fixtures, breach of the covenant of quiet enjoyment (later re-characterized as “constructive eviction” from a commercial tenancy), interference with contract, and a handful of other claims. Knight cross-complained for the unpaid rent.

Knight filed for summary judgment, arguing that Multani, “could not prevail on any of her claims because she was unlawfully on the premises at all times after July 1, 2011, and was illegally on the premises after December 9, 2011”. This argument, adopted by the trial court, became the architecture for an aggressive published appellate opinion about when the law discharges a landlord’s obligations to a defaulting tenant.
Continue reading Multani v. Knight (2018): Second District Court of Appeal Takes Expansive Approach To Discharging Landlord’s Obligations Following Expiration of Rent Demand Notice

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Hsieh v. Pederson (2018): Three Day Rent Demand Notice Need Not Allow for Personal Payment of Rent, Nor Does Personal Acceptance Extend the Notice Period

“Where an unlawful detainer proceeding is based on the tenant’s breach, the cause of action does not arise until the expiration of the notice period without the default being cured by the tenant. (§ 1161, subd. 2; Downing v. Cutting Packing Co. (1920) 183 Cal. 91, 95-96.) The complaint cannot be filed until the full notice period has expired, since the tenant is not guilty of unlawful detainer until the full three days — or in the instant matter, 14 days – have expired. (Nicolaysen v. Pacific Home (1944) 65 Cal.App.2d 769, 773 [‘tenancy is not terminated upon the giving of the notice but upon the expiration of the period therein specified’]”

In Hsieh v. Pederson (2018), a landlord appealed from a judgment for a tenant on the procedural basis that the entire action was untimely. A cause of action for unlawful detainer is (commonly) created by the service and expiration of an uncured notice. The tenant moved for judgment on the pleadings, and the trial court granted it on the basis that the notice – which allowed as an alternative cure that the tenant may pay personally during weekdays – could only count those weekdays as part of the “cure period”. Excluding weekends, the action was filed before the expiration of the notice; the Appellate Division of the Los Angeles Superior Court reversed.

Section 1161(2) of the Code of Civil Procedure describes a notice to pay rent or quit. (This is probably the quintessential “eviction notice”, described by statute as a “three day notice”, although for some reason unclear from the record, this case involved a “fourteen day notice”.)

A notice to pay rent or quit must state the essentials – the rent due and the name, number and address of the person who can receive the “cure”. The notice may also allow payment by personal delivery, in which case, it must also state the usual days/hours the personal delivery can be made.

The court held that, “Under the clear language of the [unlawful detainer] statute, the decision to allow personal payment of the rent, in addition to allowing payment by mail by the tenant, is up to the landlord.”

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Justin Goodman Featured in SF Apartment Magazine Legal Q&A for May 2018

Justin Goodman was featured in the Legal Q&A for the May 2018 issue of SF Apartment Magazine – the official publication of the San Francisco Apartment Association.

Justin discussed the history of San Francisco Rent Board’s “Rule 12.20” (which prohibits evictions based on breach of a lease term, if the landlord unilaterally added it to the lease) in the context of state law changes to residential tenant’s rights to smoke cigarette’s in their homes.


SFAA is dedicated to educating, advocating for, and supporting the rental housing community so that its members operate ethically, fairly, and profitably. SFAA’s is a trade association whose main focus is to support rental owners by offering a wide variety of benefits that address all aspects of rental housing industry.

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Residential Rent and Eviction Control Resources