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.

The amendments provide for several procedural and substantive changes to how Owner and Relative Move-In eviction notices are served and how the property owner must keep the Rent Board and displaced former tenant apprised of occupancy status.

The OMI-invoking landlord must now include, with the notice of termination of tenancy, a declaration under penalty of perjury that they seek to recover possession in good faith for use as their permanent residence for at least 36 months, and they must include a Rent Board form for the tenant to update the Rent Board on changes in address.

The landlord must file a Statement of Occupancy with the Rent Board within 90 days of service of the notice of termination wither they have recovered possession, and they must provide an update every 90 days thereafter, until they actually recover possession or stop trying. Once they recover possession, they must then provide an updated Statement of Occupancy, once a year, for the next five years, indicating that they are still in possession. The form must include the date they recovered possession, two forms of supporting documentation corroborating that they are living at the property, and a statement of the rent they are currently charging (if any).

The period during which a landlord must re-offer the unit to the displaced former tenant at their former rent (if they decide to re-rent) is extended from three to five years.

It also extends the statute of limitations on a claim for wrongful eviction and provides that non-profit organizations may sue in the former tenant’s place, if the tenant declines to do so.

Ostensibly, the Peskin amendment has the noble goal of making sure that property owners follow the rules. However, it will have to be seen if the changes lead to the desired results. The law is, in a sense, paternalistic to tenants – some of whom may actually want to waive their rights under the Rent Ordinance in exchange for something more than the statutory relocation assistance payment. Alternatively, the effect could be more broad – not benefiting the individual tenant so much as renters at large – deterring owner move-in evictions altogether by making them more onerous. However, by heightening the constraints on use, the amendment may simply lead to more Ellis Act evictions.

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