Last week, the Appellate Division of the San Francisco Superior Court provided some much needed clarity on the provision of the San Francisco Rent Ordinance that requires a landlord to notify tenants of certain information about the proposed withdrawal of their rental units, in Naylor v. CCSF
Prior to withdrawing rental units under the Ellis Act, a landlord must serve termination notices on the tenants. The court ruled that, while the landlord is required to notify the tenants of their rights to re-rent the units from the landlord (if those units are put back on the market within ten years), he is not required to inform the tenants that they have these same rights against future owners of the property, because the Rent Ordinance does not require him to.
That said, the requirements of initiating and carrying out a withdrawal of residential units from the San Francisco rental market is highly technical, and challenges to the sufficiency of notice can be comically granular. (Or, in the words of the court, the nature of the disputes can be “quite focused”.) While Naylor seems to suggest (at least in dicta) that the proper measure of sufficiency is “strict compliance” with the noticing requirements, sometimes even that isn’t enough. Last week, the San Francisco Housing Court held that the landlord in Halprin v. Wolkenstein did not properly comply with the withdrawal provisions because, while he tendered relocation checks along with the notice of termination – as required by the Rent Ordinance – the tenants did not pick up the certified letters, containing those checks, from the post office, when they missed the original delivery.
This leads to “damned if you do” situations, where a landlord could find herself arguing that she complied by sending the tenants “replacement checks”, so that they would receive their relocation payments in time to spend that money relocating, but where the tenants argue that this replacement payment did not “strictly comply” with the Rent Ordinance because it came after the notice of termination.
And this is a tough break for a landlord who waited the required one year before testing the sufficiency of her compliance with the Rent Ordinance and who must start over again from scratch – tougher still when the earth can move under her feet in the middle of the process. As Surreal Estate posted last week, the Board of Supervisors passed a diluted version of last year’s Campos Amendment, increasing the standard relocation payment due to tenants from roughly $5,500.00 per tenant to $50,000.00 per rental unit. It is unclear based on the current language how a landlord, who has already started the withdrawal process under the current rules, is expected to retroactively comply with the new ones.
