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Sinbad’s Waterfront Restaurant Expected To Close March 21st

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The SF Examiner reports that Sinbad’s restaurant, a decades’ old waterfront icon, may soon serve its last shrimp cocktail. The restaurant’s landlord, the Port of San Francisco, is expecting the restaurant to vacate by March 21, 2015, as the San Francisco Bay Conservation and Development Commission plans to demolish Pier 2 that month, allowing construction to expand the ferry terminal in 2016.

That is, unless the Stinson brothers – the restaurant’s owners – are successful in evoking the “no harm, no foul” doctrine, to continue operating until the City breaks ground on construction.

Charles Stinson was also briefly involved in an attempt to reopen a restaurant in the San Francisco historical landmark, Julius Castle, at the top of Telegraph Hill. That effort resulted in, among other things, the decision Julius Castle Restaurant Inc. v. Payne (2013) 216 Cal.App.4th 1423, where the First District Court of Appeals analyzed fraud in the inducement of commercial lease agreements.


New Rate for Interest on Security Deposits in San Francisco, Effective March 1, 2015

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Beginning March 1, 2015, the new rate for interest on security deposits is 0.1%, for the period of March 1, 2015 to February 29, 2016.

Security deposit interest must be paid every year on the tenant’s “annual due date”. For tenancies beginning after September 1, 1983, the annual due date is the same day and month the landlord received the deposit from the tenant. If the tenant moved in and paid a deposit before September 1, 1983, interest was due on September 1, 1984 and every September 1st thereafter.

For more information, please visit the Rent Board website.


New Allowable Rent Increase for San Francisco, Effective March 1, 2015

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The new allowable rent increase rate for San Francisco rent controlled tenancies goes into effect on March 1, 2015. For rent increases between March 1, 2015 and February 29, 2016, the allowable increase is 1.9%.

For additional information, please visit the Rent Board website:
A landlord may increase the tenant’s base rent once every 12 months by the amount of the allowable annual rent increase without filing a petition at the Rent Board.

Effective March 1, 2015 through February 29, 2016, the allowable annual increase amount is 1.9%.

This amount is based on 60% of the increase in the Consumer Price Index for All Urban Consumers in the Bay Area, which was 3.2% as posted in November 2014 by the Bureau of Labor Statistics.

To calculate the dollar amount of the 1.9% annual rent increase, multiply the tenant’s base rent by .019. For example, if the tenant’s base rent is $1,500.00, the annual increase would be calculated as follows: $1,500.00 x .019 = $28.50. The tenant’s new base rent would be $1,528.50 ($1,500.00 + $28.50).


Airbnb Pays Hotel Tax to the City of San Francisco

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SFist reports that Airbnb recently paid an undisclosed amount (believed to be $25 million) to the City of San Francisco for an assessed “hotel tax”. San Francisco recently passed an “Airbnb legitimacy law” (available here), allowing tenants to participate in the sharing economy as long as they follow the rules of the regulation (including limitations on number of days per year, registration with the Planning Department, carrying insurance, etc). A proposed amendment – requiring that Airbnb pay back taxes – failed to pass, but Airbnb nonetheless made good on the assessment.


San Francisco Rent Board Clarifies Position on Effective Date of New Buy-Out Agreement Compliance Requirements, Effective March 7, 2015

The San Francisco Rent Board recently clarified their position on when the new Buy-Out negotiation disclosure statements must be obtained from tenants and when they must be filed. That information is copied below and available on the Rent Board website here.

It is important to note that, even if the negotiations begin prior to March 7, 2015, such that the landlord is not required to obtain a signed disclosure form, the actual buy-out agreement must still be filed with the Rent Board if the agreement is executed after March 7, 2015.

New Ordinance Amendment Regulating Buyout Agreements
Rent Ordinance Section 37.9E, effective March 7, 2015, is a new provision that regulates “buyout agreements” between landlords and tenants under which landlords pay tenants money or other consideration to vacate their rent-controlled rental units. An agreement to settle a pending unlawful detainer action does not constitute a “buyout agreement” for purposes of Section 37.9E.

Starting March 7, 2015, Section 37.9E requires landlords to provide tenants with a Rent Board-approved Disclosure Form and to file a Rent Board-approved Notification Form with the Rent Board before beginning buyout negotiations. The Rent Board will make this information publicly available (except for information regarding the identity of the tenants). Section 37.9E also requires that all buyout agreements be in writing and contain certain disclosures, including a tenant’s right to rescind the agreement within 45 days of execution. For buyout agreements executed on or after March 7, 2015, the new law requires the landlord to file a copy of the buyout agreement with the Rent Board within 46 to 59 days after execution. The Rent Board will post all such buyout agreements in a searchable database that is available to the public at the Rent Board’s office. Before posting a copy of a buyout agreement on its database, the Rent Board will redact all information regarding the identity of the tenants.

If a landlord begins buyout negotiations before March 7, 2015, but those negotiations result in a buyout agreement executed after March 7, 2015, the Disclosure and Notification Forms are not required, but the buyout agreement must still be filed with the Rent Board. Any dispute about when buyout negotiations began must be resolved in court and not at the Rent Board.

Section 37.9E also specifies various remedies and penalties against a landlord for violation of the above requirements that can be enforced in a civil action in state court. In addition, Subdivision Code Section 1396(e)(4) was amended to provide that buyout agreements with certain tenants after October 31, 2014 shall be the basis to deny an application for condominium conversion of the building.

A copy of Ordinance No. 225-14 amending Rent Ordinance Section 37.9E and Subdivision Code 1396 is provided here for your convenience.