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San Francisco Legislative Update (2019): Prohibition Against Tenant Harassment via Rent Increases

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San Francisco has amended the Rent Ordinance to add to the definition of “tenant harassment” and “misdemeanors” certain rent increases “imposed in bad faith with an intent to defraud, intimidate, or coerce the tenant into vacating the rental unit” in circumvention of the just cause for eviction provisions. This will include circumstances where:
(1) the rent increase was substantially in excess of market rates for comparable units;
(2) the rent increase was within six months after an attempt to recover possession of the unit: and
(3) such other factors as a court or the Rent Board may deem relevant.

According to the Board of Supervisors, this legislation was prompted, in part, by specific cases in recent years with headline-grabbing rent increases. Whether justified by comparables or not, the tenants in those anecdotes chose to vacate, rather than pay the rent (although, at least one sued over the same theory that the City has now codified).
Continue reading “San Francisco Legislative Update (2019): Prohibition Against Tenant Harassment via Rent Increases”

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Justin Goodman Featured in February 2019 SPOSF Newsletter

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The Small Property Owners of San Francisco institute featured Justin Goodman’s article on “How to determine if a tenant is just using his unit as his ‘place in the City’, and what to do about it”. San Francisco rent control protects “tenants in occupancy”, and landlords can use the “1.21 petition” (named for Rent Board Rules & Regulations section 1.21) to ask the Rent Board for a finding that tenant is really living somewhere else.

SPOSF’s mission is to provide owners of small rental properties in San Francisco with the tools and information necessary to conduct business successfully in a difficult regulatory climate, through educational programs, publications, and workshops that seek to help members better understand their rights and obligations, how to work constructively with city and state officials, and how to deal effectively with their tenants. SPOSF also seeks to protect the rights of small property owners against unfair and burdensome regulations through legal advocacy.

SPOSF holds monthly meetings at St. Mary’s Cathedral, located at 1111 Gough Street in San Francisco. You can join SPOSF by clicking here. Members have access to the full monthly newsletter.

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California Legislative Update (2018): AB 2219: New Requirements for Non-Cash/EFT Rent Payments and Mandated Rent-Acceptance from Third Parties

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AB 2219 adds Section 1947.3 to the Civil Code to create new requirements for the form of tender of rent payments, landlord’s rights when tenants bounce checks, and the ability of tenants to pay via third parties. This last change is a rent-control red flag, but Section 1947.3 includes requirements to protect landlords from creating new rent controlled tenancies at the historic rental rate of another tenant.

First, a landlord must accept rent in at least one form that is neither cash nor EFT. Second, if the tenant bounces a check, a landlord can require payment in cash for up to three months (provided that they change the terms of tenancy formally, if this is not already in the lease).

Ostensibly to allow greater flexibility for tenants (but with little legislative history to suggest this is a significant concern), a landlord must now accept rent from a third party, at the tenant’s election. The mechanics of this call to mind the classic waiver trap of a subsequent occupant trying to pay rent to her master tenant’s landlord to directly establish a rent controlled tenancy. However, the landlord is only required to accept payment from a third party who is not a “tenant”. The landlord may (and really should) have the third party sign an acknowledgement that includes the following:

I, [insert name of third party], state as follows:
I am not currently a tenant of the premises located at [insert address of premises].
I acknowledge that acceptance of the rent payment I am offering for the premises does not create a new tenancy.
(signature of third party) _____
(date)

These new rules do not require a landlord to accept rent after a “three-day notice to pay or quit” has expired. They also do not require a landlord to enter a public housing contact with a Section 8 tenant. However, San Francisco landlords should be cautioned that explicitly refusing to enter such an agreement may now be actionable.

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California Legislative Update (2018): SB 721: Enhanced Safety Regulations for Residential Balconies

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Following the tragic 2015 balcony collapse in Berkeley, which killed six students, California addressed concerns over similar safety issues in other buildings, adopting amendments to the Health and Safety Code requiring owners to inspect for structural soundness, no later than January 1, 2025, and every six years thereafter. SB 721 applies to buildings with 3 or more multifamily dwelling units.

The bill also amends Civil Code §1954 to include inspection of balconies among the reasons a landlord is permitted to inspect a rental unit.

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Legal Q&A: How Do I Lawfully Access My Tenant’s Unit

A. How Do I Lawfully Access My Tenant’s Unit?

Q. Even though this is your building, as soon as you lease it to your tenant, you confer a “right of exclusive possession” against you and the world. This right is not absolute, and you can access under certain circumstances. But it is important to understand the laws governing access to avoid interfering your tenant’s rights. Even at the state level, a landlord may not abuse the right of access or use it to harass the tenant. But there may also be enhanced penalties at the local level (e.g., abusing the right of entry is among San Francisco’s definitions of “tenant harassment”, which can lead to misdemeanor penalties and other potential liability.)

First, a landlord should only enter with proper notice (or express consent of a tenant). This notice should be in writing and should provide “reasonable notice”, which Civil Code §1954 defines as six days by mail, or 24 hours if you hand the notice to your tenant (or someone else at the rental unit) or leave it under the door.

A landlord can only enter for the right reasons. Section 1954 lists the following:

(1) In case of emergency.
(2) To make necessary or agreed repairs, decorations, alterations or improvements, supply necessary or agreed services, or exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workers, or contractors or to make an inspection pursuant to subdivision (f) of Section 1950.5.
(3) When the tenant has abandoned or surrendered the premises.
(4) Pursuant to court order.
(5) For the purposes set forth in Chapter 2.5 (commencing with Section 1954.201) (relating to access for water utility submeters located inside the tenant’s unit);
(6) To comply with the provisions of Article 2.2 (commencing with Section 17973) of Chapter 5 of Part 1.5 of Division 13 of the Health and Safety Code (referring to balcony and deck inspection)

Finally, a landlord should only notice the entry during “normal business hours” – something Section 1954 doesn’t define. There are very few cases interpreting this statute in general, but a 2013 case – Dromy v. Lukovsky (2013) 219 Cal.App.4th 278 – took a pragmatic approach based on context. A landlord was allowed to access with his real estate agent on weekends, as those were conventional “business hours” for open houses.

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Smyth v. Berman – Lessee’s Right of First Refusal Is Not an “Essential Term” for the Purpose of Renewal of Periodic Tenancies

“Does a right of first refusal contained in a written lease expire when that leasehold ends and the tenant becomes a ‘holdover’ tenant, and when the lease specifies ‘the continuing [holdover] tenancy will be from month to month’? We conclude that a right of first refusal is not an essential term that carries forward into a holdover tenancy unless the parties so indicate.”

In Smyth v. Berman, the Second District Court of Appeal held that, when a commercial tenant has a “right of first refusal” to purchase the property, included in a term lease agreement, that right is not among the “essential terms” of the lease. Because it is not essential, it is not included among the terms and conditions of the periodic tenancy created by the tenant’s holdover and the landlord’s acceptance of rent.

“When a lease expires but the tenant remains in possession, the ‘relationship’ of the landlord and tenant ‘changes’. The ‘lessor-lessee relationship’ based on ‘privity of contract’ ends, and a new ‘landlord’-‘tenant’ relationship based on ‘privity of estate’ springs into being by the operation of law. (Civ. Code §1945.) This new ‘hold-over’ tenancy is presumed to continue under the same terms contained in the now-expired lease except as those terms may have been modified by the landlord and tenant. (Civ. Code, § 1945) This case tees up the question: If the expired lease contained a right of first refusal, is that right one of the ‘terms’ that presumptively carries forward into the holdover tenancy? We conclude that the answer is ‘no’.”

The court added that this is merely a presumption, and the parties could contract for this term to renew. But absent such intention, this presumption added to the stability of commercial tenancies, by allowing the holdover tenant to remain on a month-to-month basis, under terms and conditions that didn’t give the landlord an incentive to nullify the right of first refusal by evicting their tenant.

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SF Examiner Reports on Sup. Peskin’s Efforts To Put “Vacancy Tax” on November Ballot

The SF Examiner reports on the efforts of Supervisor Peskin to put a rental unit “vacancy tax” on this November’s ballot, for both residential and commercial properties. (San Francisco already requires registration and fees for vacant buildings.)

According to the Examiner, “Details are still being worked out, but the intent is to apply the tax to residential properties with three or more units. After six consecutive months of a vacancy, the property owner would pay $250 a day until the unit is leased”.

San Francisco’s ongoing efforts to create more housing has manifested in interesting ways over the years. Turning vacant units into residential rental units would obviously add to the rental housing supply. But whatever the actual language of the law, it is difficult to imagine that a special tax on those who refuse to enter the residential rental business is not a violation of the Ellis Act. (Buildings of this size would also need to register for the City’s gross receipts tax if they are used as rentals.)

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Justin Goodman Featured in SF Apartment Magazine Legal Q&A for January 2019

Justin Goodman was featured in the Legal Q&A for the January 2019 issue of SF Apartment Magazine – the official publication of the San Francisco Apartment Association.

Justin explored a landlord’s options when a tenant installs an electric vehicle charging station, without the landlord’s approval, seemingly to take advantage of an “all utilities included” lease agreement. Justin also notes for readers of Costa-Hawkins.com that landlord-tenant law moves quickly, and sometimes the submission deadline for a print magazine can be far enough out that the law changes in the meantime. Starting January 1, 2019, state law actually requires landlords to allow charging stations (with some conditions).

Justin also wrote a feature article for the January 2019 issue, titled “A Fair Fight”, where Justin predicted the future of San Francisco landlord-tenant law in a post-Proposition F era, based on his experience with San Francisco’s existing, well-funded, legal aid clinics.


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

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

Justin discussed liability “what happens next” after a landlord unwittingly enters an agreement with their tenant to vacate, without realizing that San Francisco now heavily regulates this conversation.


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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Dr. Leevil, LLC v. Westlake Health Care Ctr. (2018): Title Must Be “Duly Perfected” Before Service of Unlawful Detainer Three-Day Notice, Despite Retroactive Perfection of Title Under Nonjudicial Foreclosure Statutes

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In Dr. Leevil, LLC v. Westlake Health Care Ctr., a property owner leased its property to a skilled nursing facility and later obtained a secured loan. It defaulted. Dr. Leevil, LLC purchased the defaulted loan and initiated a nonjudicial foreclosure sale, ultimately buying the property at the trustee’s sale. Dr. Leevil, LLC served a three day notice to quit the next day, but did not record title for five more days.

Serving the notice before becoming “record owner” seems counterintuitive. However the nonjudicial foreclosure statutes arguably condoned the practice. Cal. Civ. Code § 2924h(c) states, “the trustee’s sale shall be deemed final upon the acceptance of the last and highest bid, and shall be deemed perfected as of 8 a.m. on the actual date of sale if the trustee’s deed is recorded within 15 calendar days after the sale, or the next business day following the 15th day if the county recorder in which the property is located is closed on the 15th day.”

The unlawful detainer statutes refer to the nonjudicial foreclosure statutes, in setting forth cases of post-foreclosure evictions. Applicable here, “a person who holds over and continues in possession of . . . real property after a three-day written notice to quit the property has been served . . . may be removed therefrom . . . Where the property has been sold in accordance with Section 2924 of the Civil Code, under a power of sale contained in a deed of trust executed by such person, or a person under whom such person claims, and the title under the sale has been duly perfected.” Cal. Code Civ. Proc., §1161a(b)(3).

In other words, Dr. Leevil, LLC believed it could serve the notice to quit first, because it was already the owner, and title could be (and ultimately was) retroactively perfected as of the actual purchase date. The Court of Appeal adopted this interpretation.
Continue reading “Dr. Leevil, LLC v. Westlake Health Care Ctr. (2018): Title Must Be “Duly Perfected” Before Service of Unlawful Detainer Three-Day Notice, Despite Retroactive Perfection of Title Under Nonjudicial Foreclosure Statutes”

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