Board of Supervisors Passes Ordinance Amending Rent Ordinance To Address “Fraudulent Owner Move-In Evictions”

The San Francisco Board of Supervisors finally passed one of two competing bids to strengthen the “Owner Move-In” provision of the Rent Ordinance. The proposed changes followed an NBC Bay Area investigation into the occupancy status of dwelling units where the landlord had initiated an OMI eviction.

The NBC Bay Area investigation attempted to determine whether these dwelling units were, in fact, occupied by owners following the termination of the previous tenancies. It reviewed each of over 300 OMI notices filed with the Rent Board in 2014. After making contact with occupants of about 100 of these units, it found tenants paying higher rent, instead of owner-occupiers, in roughly a quarter of the units.

Existing law requires that a property own who invokes the OMI provisions move into the unit within 3 months, occupy it as their full-time residence for 36 months. A property owner must do all of this in good faith, and, while it is permissible to vacate earlier (e.g., if the owner relocates and moves out sooner than expected), and resume rental use, the property owner was required to re-offer the unit (1) at the former rental rate, and (2) to the displaced former tenant, for a period of three years following the service of the notice of termination.

In an effort to address these alleged “fraudulent OMIs”, the Board of Supervisors has been considering competing proposals, by Supervisor Farrell and Supervisor Peskin, for the last several months. Each would to enhance the constraints on re-rental of units recovered in OMI evictions (extending the timeframe to reoffer to the displaced former tenants from three to five years). The Board of Supervisors ultimately passed Farrell’s version, which also provided for misdemeanor liability.
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San Francisco Legislative Update (2017): Children Now Entitled to Ellis Act Relocation Assistance Payments Following Danger Panda Decision


The First District Court of Appeal recently vindicated a landlord’s efforts to terminate a tenancy pursuant to the Ellis Act, where both the Trial Court and the Appellate Division found the notice of termination of tenancy invalid, as the landlord paid only the adults and not the child who occupied the unit. That case, Danger Panda v. Launiu interpreted the term “tenant” in the section of the Rent Ordinance requiring relocation payments to “tenants”, determining that this was a term of art with a specific import: “Construing section 37.2(t) according to its plain language, a tenant is a person who is entitled to occupy a residential unit (1) to the exclusion of all others and (2) pursuant to a written agreement; oral agreement; sub tenancy approved by the landlord; or sufferance.” The Court noted, however, that it was only interpreting that term, not considering whether the Board of Supervisors had the authority to confer a relocation benefit on a child.

Supervisor Ronen picked up this cue, introducing Ordinance 123-17, which requires payment to every “Eligible Tenant”, defined as “each authorized occupant of the rental unit regardless of the occupant’s age”. Danger Panda resolved the uncertainty in whether minors were entitled to Ellis Act relocation assistance payments (as they are for other non-fault evictions under the Rent Ordinance). Interestingly, Ordinance 123-17 may resolve further uncertainty about whether a landlord is required to pay persons with whom she has no privity, but who nonetheless occupy a rental unit.

Ordinance 123-17 becomes effective July 22, 2017, and the full text is available here.


San Francisco Legislative Update (2017): Revision to SF Fire Code Imposes Significant New Fire Safety Burdens on Property Owners


San Francisco recently revised its entire Fire Code to impose significant new requirements on residential property owners in the City. Cities in California must enforce the California Fire Code and they may enact their own codes that are at least as strict as California’s. The adoption of a completely new code is therefore actually somewhat ministerial. Of course, while these changes were not prompted by Oakland’s recent “Ghost Ship” warehouse fire, fire safety (and lawful residential use of unpermitted/unregulated property) has been under increasing public scrutiny lately.
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San Francisco Legislative Update for 2016: Enhancing Enforcement Provisions for “Airbnb Law” with New Obligations for Hosting Platforms


San Francisco will now require hosting platforms to verify that a residential unit is on the City registry prior to listing and to require them to respond to requests for information from the City.

Ordinance 104-16 represents another effort in the City’s ongoing “project” of striking a balance that allows short term listings without allowing abusive practices that siphon long-term residential housing stock. The Board of Supervisors specifically states that the intent of the ordinance is not to punish short-term rental hosts who are trying to lawfully comply with San Francisco’s short term rental laws, but rather to bring more short term rentals into compliance. It goes on to self-consciously note that the registration process has been difficult to navigate, directing the Office of Short-Term Rentals to make recommendations on how the City can improve the process. Perhaps the law will need to be revised again in the future, but that’s some customer service in the meantime.

You can read the full text of Ordinance 104-16 here.


San Francisco Legislative Update (2016): New Defense to Owner Move-In Evictions for Students and Educators


San Francisco has passed a much publicized amendment to the owner move-in provisions of the San Francisco Rent Ordinance to provide a defense for students and educators, in an effort to mitigate disruption during the school year.

The new language broadens the protection to include educators, as well as children, making it a defense to an eviction that a notice of termination of tenancy expires during a school year.

This defense now also extends to “educators” so long as the “tenant” with a family relationship to the educator has resided in the unit for 12 months. Presumably tenant attorneys will now expand their practice to include family law for last-minute marriages.

Ordinance 55-16 extends the defense to four other bases for non-fault evictions (including for demolition/removal of a unit, conducting capital improvement/ substantial rehabilitation work). This new exception does not apply when the landlord seeks to perform seismic work, under Building Code Chapter 34B, showing that the Board of Supervisors is aware some things are more important than the San Francisco housing crisis.

Finally, Ordinance 55-16 eliminates the former “trump card” where the landlord seeking to move in also has a child who will reside in the unit. Perhaps the move into a new home would also disrupt the studies of the landlord’s kid.

Despite some reports, this does not affect Ellis Act terminations.

You can read the full text of Ordinance 55-16 here.


SAN FRANCISCO LEGISLATIVE UPDATE (2016): Conditional Use Approval Required for Removal of Authorized and Unauthorized Units


San Francisco now requires conditional use approval (via hearing by the Planning Commission) for the removal of both authorized and “unauthorized” (i.e., unpermitted) residential units, under Section 317 of the Planning Code.

Ordinance 33-16, modifying Section 317 of the Planning Code, follows (and repeals) Ordinance 23-16, requiring conditional use authorization for removal of authorized and unauthorized units in the C-3 (Downtown Commercial) District.

You can read the full text of Ordinance 23-16 here and Ordinance 33-16 here.


SAN FRANCISCO LEGISLATIVE UPDATE (2016): Katy Tang Tweaks Jane Kim Amendment


Last year’s “Jane Kim Amendment” to the Rent Ordinance almost immediately frustrated San Francisco property owners, who lamented the loss of “no subletting” provisions and occupancy limits in their rental units. It also frustrated some of their attorneys, who lost eviction lawsuits at the pleading stage for failing to attach the new required form to their termination notices.

This year’s Ordinance 17-16 makes some minor changes to the Rent Ordinance, including a change to the new Form 1007, which now includes information about the Mayor’s Office of Housing and Community Development regarding eligibility for affordable housing programs.

Having just become effective on March 19, 2016, it is not yet clear if tenants will be able to successfully demurrer to complaints with notices that used the old Form 1007… but some of these changes are starting to feel more like traps for practitioners than features of a comprehensive affordable housing plan.

In any event, make sure to use the newForm 1007, not the old one.

You can find the language of Ordinance 17-16 here, and the new Form 1007 here.


Jane Kim Amendment Thwarts Incomplete Unlawful Detainer Complaints


The San Francisco Housing Court has begun sustaining demurrers to unlawful detainer complaints that fail to allege compliance with the “dominant motive” requirement of the Section 37.9(c) of the Rent Ordinance and/or attach termination notices that do not include the Rent Board’s Form 1007, containing multi-language advice to tenants about the Rent Board.

These new requirements – imposed by the “Jane Kim Amendment” to the Rent Ordinance – have been catching some practitioners off guard (which, to some degree, may have been the point). While it is a simple enough task to amend the complaint to state that “collection of rent” (or whatever) is the landlord’s “dominant motive” (as is now required by the amended Section 37.9(c)), the missing Form 1007 is more problematic.

Section 1166 of the Code of Civil Procedure, requiring landlords to attach termination notices, does allow amendment of the complaint upon failure to attach a copy of the notice (or, unless leave to amend is futile, a complete copy of the notice). Unfortunately for landlords, Form 1007 must be attached to the notice, the service of which is a prerequisite to an unlawful detainer cause of action.

Following the recent Borsuk decision, Delta Motions To Quash no longer appear to be a viable pleading challenge to test the sufficiency of a cause of action for unlawful detainer. Nonetheless, this kind of defective pleading would seem to appear on the face of the unlawful detainer complaint, making it appropriate for demurrer. And, where a properly-served and legally sufficient notice of termination is a prerequisite for unlawful detainer standing, leave to amend is not likely to rescue the lawsuit.