Eviction and Apartment Sales

The sales prices of apartment buildings in the Bay Area are skyrocketing. You need to be aware of your tenant’s rights when landlords try to get more income from their investments. You could get an eviction notice.

Rising Sales Prices

First, a look at the apartment market as reported by Paragon Commercial Brokerage. Their January 2016 SF Bay Area Apartment Market Report shows that the sales price per apartment unit is up.  In 2014, it was $352,000, and in 2015 it rose to $404,000. That’s an increase of about 15%.

The Paragon report notes that “many SF apartment buildings have become cash-generating machines,” and that it would be difficult for a landlord selling her property to duplicate the return on other investments.

Who makes the cash machine run? You, the rent-paying tenant.

San Francisco is touted as the most expensive rental market in the country. Tenants with high paying jobs can pay high rents, as we are seeing in the Mission and other neighborhoods. If you don’t work at a high-paying job and you don’t live in a rent-controlled apartment, you could get caught with a landlord raising rents.

The Top Selling Neighborhoods

The Paragon report examines where the highest selling apartments are located. There should be little surprise here.

For buildings with over 5 units, the top three areas are:

1. Pacific Heights-Marina
2. SoMa
3. Russian & Nob Hills, North Beach

For buildings with 5 units or under, the top three areas are:

1.  Pacific Heights-Marina
2.  Russian & Nob Hills, North Beach
3.  Noe, Eureka & Cole Valleys

Generating Rent

Rising prices for apartment buildings influences landlords to jack up the rents when they are thinking of selling the building to attract investors. After a landlord purchases the building, higher rents justify a high sales price. I’ve heard of tenants living in non-rent controlled apartments receiving rent hikes before a sale and after the sale of their building.

Whether you have a landlord trying to sell your rent-controlled building or a landlord who recently purchased it, the Costa Hawkins Rental Housing Act is a law that works against you. As I have mentioned in other blogs, it states that when you move out of your rent-controlled apartment, the landlord can raise the rent to “market” for the next tenant. Some landlords are eager to clear their buildings out of “below market” tenants.

Eviction the Easy Way

The easiest way to evict a tenant is for the landlord to give you a “friendly” warning.  These can come in the form of a future event, such as telling you, “I wanted to let you know that my son will be moving into your unit in a few months.” This is generally said under the guise of “helping” you to move out.

If they get you to move out voluntarily, then they don’t have to formally evict you. You lose your tenant’s rights because there is no wrongful eviction.  You moved out voluntarily and possibly without the mandatory relocation payments.

Owner Move-in

There are legal requirements if the owner is evicting you under an owner move-in. These include the owner moving in within 3 months. The owner must also live in the apartment for 36 months. That’s 3 years.

Seniors and those with disabilities are usually protected from the threat of an owner move-in eviction. Families with children also have some protection. If you move because of some “friendly” warning, then you lose these protections.

After an owner move-in eviction, the landlord cannot re-rent the unit at a rent greater than what the evicted tenant was paying, except for allowable rent increases. The San Francisco Tenant’s Union has complied a spreadsheet of the registered owner move-ins on their website.

The Ellis Act

Another way a landlord can evict you is by using the Ellis Act, which means that the building is being taken “off the market” as a rental.  If it’s small, the owner may want to move into it himself, or if it’s a larger building, he may convert it to tenancies in common or TICs.

Relocation Money

However, both evictions as a result of an owner move-in and the Ellis Act means that landlord has to pay the tenant relocation money. If you move earlier, you will not be legally eligible for the reimbursement.

What if you get a threat or a “friendly” notice?

Stay put.  Make them formally evict you. This is the only way to preserve your tenant’s rights.

If you receive a verbal “warning” about the landlord moving in a family member, immediately write it down and date the paper.  If you receive a written “warning,” save this paper. If there is no date, add a date and your initials. Put this paper in a folder along with other papers about your home, such as your lease and rent increase notices.

You might consider filing a Report of Alleged Wrongful Eviction with the San Francisco Rent Board.  The Rent Board will sent a notice to the landlord reminding him about everyone’s right and responsibilities. The Rent Board will also ask the landlord for a written response to your allegations.

Obviously, involving the Rent Board increases the stakes. Consider how and when to inform your landlord that you know your tenant’s rights.

If you are unsure what to do

Are you facing an eviction? Unsure of your tenant’s rights? You should consider speaking to an experienced tenant attorney.

Know your rights. Protect yourself.