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.
“Is My San Francisco condominium subject to rent control?”
This is an interesting question, and the answer is surprisingly complicated. First, some general principles. Cities may constitutionally impose rent control ordinances, so long as they provide fair returns to property owners. San Francisco’s Rent Stabilization and Arbitration Ordinance applies to all “rental units” – a term that includes basically all dwelling units with certificates of occupancy issued before its effective date, June 13, 1979.
However, Costa-Hawkins, effective as of January 1, 1996, exempted certain kinds of dwelling units from local price controls, including those that were “alienable separate from the title to any other dwelling unit” (namely, single-family homes and condominiums). San Francisco eventually amended the Rent Ordinance in 2000 to respect the interplay between state and local law.
In the years after Costa-Hawkins’ enactment, some property owners were claiming the benefits of condominium conversion without actually selling any of them as separately alienable units. Essentially, the owner of an apartment would get final map approval to be able to sell the individual units in a (former) apartment building, using this as a pretext to increase rents on existing tenants. In 2001, the California Legislature identified this as a “loophole” in Costa-Hawkins and passed SB 985, amending Costa-Hawkins to exempt condos only under certain circumstances.
Continue reading Q & A: Is My San Francisco Condominium Subject to Rent Control?
Effective January 1, 2002, SB 985 amended the Costa-Hawkins Rental Housing Act to “close the loophole” allowing owners of apartment buildings to obtain a final public map for subdivision of an apartment building, never actually sell any units as condominiums. This would permit them to avoid local rent control ordinances that would otherwise apply to the apartment units, on the theory that the building now contained separately alienable units exempted under Costa-Hawkins. SB 985 amended Costa-Hawkins to require that condominiums be sold separately to bona fide purchasers for value. It is analyzed extensively in the case City of West Hollywood v. 1112 Investments Co..
The San Francisco Rent Board has prepared its Annual Report on Eviction Notices for the San Francisco Board of Supervisors, detailing the number of eviction notices filed with the Rent Board from March 1, 2016 to February 28, 2017, indexed by the “just cause” identified by the landlord.
The report shows an overall decline in non-fault evictions, compared to the previous year, including an 18% drop in Ellis Act evictions and a 5% drop in Owner Move-In evictions.
SocketSite has complied twenty years of eviction notice data from the Rent Board’s annual reports to the City, showing the absolute number, as well as specifics broken down by non-fault and fault-based eviction notices.
“Insisting that a ‘tenant’s child may be a tenant protected under the Rent Ordinance,’ defendants direct our attention to Mosser Companies v. San Francisco Rent Stabilization & Arbitration Bd. (2015) 233 Cal.App.4th 505 (Mosser Companies) and T & A Drolapas & Sons, LP v. San Francisco Residential Rent Stabilization & Arbitration Bd. (2015) 238 Cal.App.4th 646 (Drolapas) . . . Defendants mistakenly rely on Mosser Companies and Drolapas. The primary issue in both of these cases was how to interpret statutory language in the Costa-Hawkins Act, specifically, the words ‘occupant’ and ‘possession’ in Civil Code section 1954.53(d)(2). (Mosser Companies, supra, 233 Cal.App.4th at pp. 512-513; Drolapas, supra, 238 Cal.App.4th at pp. 652-653.) The present case does not involve a proposed rent increase under the Costa-Hawkins Act. Beyond that, the question we address is not whether David is an occupant or in possession of Unit 308A. The issue here is whether David’s status as a minor precludes him from being a ‘tenant’ for all purposes under section 37.2(t) of the Rent Ordinance.”
Danger Panda, LLC is the owner of a residential property in the Mission District. Over three years ago, it begin the process of invoking the Ellis Act to terminate all residential tenancies in the building. The Ellis Act is a state law that allows property owners to “go out of the rental business” and evict their tenants, so long as they comply with local eviction control ordinances. San Francisco’s ordinance requires property owners to pay “relocation assistance”, to help displaced tenants with moving expenses and deposits for their new home.
Continue reading Danger Panda v. Launiu – First District Court of Appeal Defines “Tenant” under the Rent Ordinance To Exclude Minors
“A trial court acquires jurisdiction over the parties when the plaintiff serves the defendant with the unlawful detainer summons and complaint. (Borsuk v. Appellate Division of Superior Court (2015) 242 Cal.App.4th 607, 612.) Service of the notice to quit is an element of the action that must be alleged in the complaint and proven at trial, but it does not give the court jurisdiction over the parties.”
In U.S. Financial, L.P. v. McLitus, a purchaser at a trustee’s sale following non-judicial foreclosure served a three-day notice to quit on the former owner, following the purchase but before perfecting title after the sale, and brought an unlawful detainer action to recover possession. The Superior Court for the County of San Diego awarded possession to the purchaser, but the previous owner appealed to the Appellate Division of the Superior Court, which reversed and remanded.
Continue reading Second District Challenges Supreme Court on Timing of Post-Foreclosure Eviction “Three Day Notice To Quit”