Speaking of a potential Owner Move In (OMI) eviction, a reader reports and asks:
I’m being evicted for OMI in Pac Heights after 8 years in the building. Been offered $8k above statutory buyout amounts and will have to leave SF after 20 years. Anyone got any firsthand knowledge about what is a current market offer to accept under the circumstances?
For eviction notices served between 3/1/13 to 2/28/14, the statutory relocation amount due per evicted tenant in San Francisco is $5,207 with a maximum of $15,621 per unit plus $3,472 per elderly or disabled tenant or household with minor child(ren).
As they say, hate the game, not the players. And if you’re going to play, play to the best of your abilities but do try to follow the rules.
∙ Circa 2001 In The Sunset But With Tenants Currently In Place [SocketSite]
∙ Relocation Payments for Evictions [sfrb.org]
∙ Landlord or Owner Move In Evictions [sftu.org]
but $8k more than law, what more do you want? Life estate on owner’s dime?
Ok, here are some fair questions:
1. Why do you have to leave after 20 years in The City? Is this tied to you being able to not afford a new rent? or another reason? job?
2. The $8k sounds pretty good. Why not use it to help rent a new place?
As a landlord, in a profitable seller’s market I would be willing to pay up to $50 K to compensate a tenant for moving out of a property I wanted to sell so that I could best time my exposure to the market. The tenant gets compensated to move and I get a vacant house or condo to sell … it’s a win-win … good luck with your negotiatons with your landlord.
Current Market Rate???? This just about sums up the “entitlement” problem created in this city by rent control. Renters think they own have life estates in the property of others! Well, according to the National Low Income Housing Coalition, SF currently has the 2nd least affordable rental market in the whole U.S. So I think it is time for everyone to accept the reality that the experiment has not worked. Markets cannot be artificially constrained without unintended consequences. Instead, SF has created an atmosphere of contempt between longtime property owners and the tenants they serve.
The Ellis Act becomes more and more desirable for landlords as each day passes!
if i was omi-ing you, i wouldnt give you a cent more than $5,207. that 8 grand is your landlord being nicer than he should.
I agree with landlord sf:
Too bad rent control has to include any money at all from the property owner.
Move on. Take the money. Find a new place and stop complaining.
Good comments Hitman: totally agree.
I know a lot of people who are in a situation where they would leave SF if they had to move.
In theory, from a demographics standpoint, the city should age over the next decade+ as so much of the housing in SF is “locked up.”
On the rental side, what % of existing renters could afford to pay current market rates? I know some who definitely can’t and some who could, but it would put a serious crimp in their lifestyle.
On the purchase side, what % of current owners could afford to buy at today’s prices?
I’m not a fan of rent control in SF (and I’m a renter). During rental spikes like we’ve had over the last two years, it locks up a larger and larger % of the rental stock and becomes a vicious circle with rent increases. The faster rent rises, the more people who “can’t afford to move,” the more rental stock is locked up, etc.
And then the rent spike pushes some to buy instead of rent, especially with current rates . . .
Value of avoiding an OMI vs Ellis Act eviction are very different, key is whether the owner intends to actually move-in or is just trying to empty the building to sell the property.
If it’s a new buyer who intends to move-in, the added value in avoiding the OMI is equal to the legal fees and opportunity/carrying cost of executing the eviction. If it’s a long-term owner or flipper, avoiding an eviction is worth much more.
So aren’t there two items going on here / being discussed?
a) what’s the going rate that a renter gets from a new owner for an OMI?
b) what’s the going rate that a renter gets from an existing owner looking to push them to move out so that they can sell it empty?
let’s take out any of the special cases (ie, senior person, etc.).
Related question: if the renter declines b), then a) is generally a lot less, right? I’d think so.
And you have to leave SF why? You can’t live anywhere but Pacific Heights?
I can’t believe that if you rented a place in Pacific Height only eight years ago that you’re paying so little that you can’t afford to move to a cheaper neighborhood in the City.
Just because you can probably get away with gouging a buyer doesn’t make it right. You’re not entitled to it.
What a crock of BS. “I will have to leave SF after 20 years” Really? What is your current rent? I’d be shocked if you couldn’t stay in SF at the rent you were paying in Pac Heights 8 years ago — especially considering the >$13K you’re going to get to move. You may need to downsize to a smaller unit or a less desirable neighborhood. I’d advise Portola or Excelsior — very cheap these days but getting better all the time. Deal with it.
I am curious why the LL is offering $8k on top of the required minimum. Is that so you’ll go quietly and not try to take legal measures to slow the process?
I see one LL commenter above is willing to pay $50k, so clearly there’s more here than just love for the tenant.
Any info appreciated.
“Anyone got any firsthand knowledge about what is a current market offer to accept under the circumstances?”
Try $5,101
This should be a fun thread.. 2005 wasn’t so long ago for one to have fully taken advantage of RC. My question is always, does the tenant own or rent property elsewhere? If I see another, “I’m being forced out of SF forever and so I’ll have to move into my second home! Waaaah!” type scenarios, my eyes will roll so far they’ll be stuck staring at the emptiness inside my head.
Talk to a tenants’ lawyer. Most likely there will be some violations on the property itself, on the rental contract or on the eviction notice. The lawyer will be able to find these and help you negotiate a better settlement. The settlement should be in the tens of thousands, btw, depending on the extent to which your landlord has skirted the law. Good luck!
8 years in the building, ouch #1. The market rate for a similar place probably doubled or more, ouch #2.
A $50K payout? That’s a ridiculous number. Maybe in very few cases of very valuable property at a fire-sale rent and no easy eway out. Say a $1M apartment part of a multi-unit building you cannot OMI and a 1K rent. As a matter of principle, I would NEVER give more than what someone is entitled to.
The landlord giving his 8K is doing a disservice to all other landlords by rewarding the lack of preparedness from the tenant’s part.
The lesson here: rent control is keeping people away from the real world. Always have your ears to the ground.
As a tenant, always have a plan B or even a plan C.
Plan B: try and make sure your income follows market rent!
Plan C: save up whatever you can from your low low rent to build a massive downpayment for a purchase.
If you can’t do that, tough luck. Renting is always temporary.
As the editor points out, the question here is not whether rent control is right or wrong, but how much is a reasonable amount for the current tenant to negotiate for. An accurate answer to this question will be helpful for both tenants and owners to know… so let’s skip the vituperation and estimate that number.
To address the real question, I think your landlord is being quite fair with the $8K offer. From my experience, the going rate is more like $5K — just to ensure that the process goes smoothly and you don’t try to pull a bunch of legal BS which delays the process, and to be “nice”. Bottom line, if they are doing a true OMI, they will get rid of you sooner or later — the only question is whether you want them paying you or paying their lawyers.
The commenter in the $50K range doesn’t make a lot of sense. If your landlord has no “just cause” to evict you (OMI is “just cause”) and wants you to move out so she can sell the unit vacant or re-rent at market rate, then a buyout in the $30-50K range is typical.
@Po Hill Jeff: Sure. My answer is zero.
@Flandlords: You do not know that.
Tenants in SF will often try and shakedown the landlords even if the landlord is within his right. But the tenant lobby is so strong that landlords are being bullied out of their cash.
I agree, your landlord is being too generous with the $8K offer. It’s his property and you need to be out if he wishes to move in.
I accepted $25K to vacate an apartment back in 2000. But that was because the landlord (who had recently bought the building) was barred from doing an OMI. They tried, I took it to the Rent Board, and they had to rescind the eviction (another comparable unit in the building was about to become vacant). So I offered to move out peacefully in exchange for money. I had simultaneously bought an occupied 2-unit building and paid one of the tenants $10K to scram. The difference was that I was fully within my rights to do an OMI and that would have been cheaper, but I didn’t want to be bound by the constraints of the OMI. The tenant (a law student) knew she didn’t have a case so the extra money was a bonus to her.
Take what you will from that story, it’s a dog-eat-dog market out there. I would advise you to check up on your landlord and find out why he (or she) is not simply evicting you. Is he pressed for time? Is he not really planning to occupy it long-term? Has he done other evictions in the past few years? If you find out his motivation you have a bargaining chip. If you find nothing, take the money and leave. As with all legal matters, a negotiated solution is superior to litigation. Don’t go in assuming any sinister motives (but don’t be blind to them either).
As for hating the game, the rules of the game worked in your favor for 8 years so just suck it up. From 2005 to now, rents on vacancies have almost doubled but your rent hasn’t. And to the other commentators above, I agree that Rent Control is a travesty. It distorts the market and causes landlords to neglect their properties because they can’t recoup expenses for improvements. That said, this particular landlord probably got the building cheaper (as I did back in 2000) because it was occupied. The rules are transparent enough and not unfair to one party in particular.
personally i’m in a unit which could easily rent for $1k more a month. that’s $12k a year. if i stick around for four years (probably a safe assumption for a tenant that’s already been there for 8yrs), the LL is out $48k. and much more than that if rents continue to rise.
so $50k seems perfectly reasonable actually.
my LL knew full well what RC was when she bought our buildings. so i have zero sympathy. and she doesn’t ask for sympathy, unlike the wimps i’m seeing here.
if you don’t like the way RC works – and i don’t either – write a letter to your supervisors and vote appropriately. but don’t bash tenants for behaving in a perfectly legal and rationale manner.
Assuming the tenant is the only one living in the unit, the landlord isn’t required to pay more than $5210.00 for relocation.
personally i’m in a unit which could easily rent for $1k more a month. that’s $12k a year. if i stick around for four years (probably a safe assumption for a tenant that’s already been there for 8yrs), the LL is out $48k. and much more than that if rents continue to rise.
Yikes. So if the tenant was going to stick around for 20 years (not totally unreasonable!) then you think that he should be due 240k from the owner?
To be honest, I just don’t see why renters should get any windfall of these kind of magnitudes at all from property. Not totally against enough to cover expenses of moving etc – so I see $5k as the sensible absolute maximum limit.
Many years ago, I had a friend who bought a tenant occupied TIC and was looking at filing an OMI in order to move into the unit.
Basically, what it came down to was he could file the OMI, pay the mandated relocation payment to the tenant and then have to wait up to 6 months if the tenant challenged the OMI. Meanwhile, he’s paying for the attorney, for multiple filing fees to respond to challenges and extension requests by the tenant, on top of the mortgage for a place he doesn’t live in.
Or he could just cut the tenant a check for the relocation payment plus some negotiated extra amount to get them to move voluntarily without having to file the OMI.
He chose the latter option and got the tenant to agree to move out for a negotiated sum. He didn’t like rewarding the tenants for being difficult (which they were, they made all sorts of ridiculous claims that he was a flipper realtor which he wasn’t at all) but the way he saw it, either the attorney and the courts are going to get the extra money or the tenant is, he’s out the money either way. What he’s buying is the ability to move in sooner rather than later.
Not enough information here. The amount the landlord is willing to pay totally depends on the situation.. there is no “going rate”.
If you think the landlord really doesn’t want to OMI, then ask for more money. But be careful, because if you push too far then they will OMI and you’re out $8k.
That said, if you’re not protected, and only moved in 2005, with no additional info, I’d say that you’re doing pretty well for ~$13k. The big payouts ($30-50K) are usually for protected tenants that have been there for many years are are paying very low rent (I compensated a protected tenant $45k to vacate an apartment they’d been in 42 years).
As the editor said, don’t hate the player, hate the game. I am definitely not a fan of rent control, but don’t have any problem with a person working with the existing rules.
My take is this, there is no market rate, as every situation is different, it depends on a number of factors:
1) How big the gap is between your current rent and what the unit could be rented for
2) Why the owner wants a vacant unit.
3) How much hassle the owner is willing to put up with to save money
4) How much hassle you are willing to put up with to squeeze the owner
I’m sure you can get some more, as the first offer is almost never what they are willing to pay. On the other hand, you haven’t been there that long, so I don’t see much likelihood of you getting anywhere near $50K. My guess is you can get somewhere between $2-$10 more if you really wanted to.
But my advice is to take the offer as presented and be happy with it. Anything else is an attempt to use the law to take advantage of another person. If the role were reversed what do you think would be the decent thing to do?
“So if the tenant was going to stick around for 20 years (not totally unreasonable!) then you think that he should be due 240k from the owner?”
probably not… the LL should be willing to pay more than 1 month, and less than the life expectancy of the tenant.
in most situations like this, long-term tenants don’t just up & leave on their own (that’s the point of offering them $$) so using a multiplier of several years is not unreasonable.
and that’s why LL’s end up paying $50k.
I agree with the editor at trying not to “hate the player but hate the game…”
Most of us just can’t do that. Me included.
Seems that many players (or most) will attempt to hold the landlord “ransom” for a LOT more money. Seems like the rent control laws should NOT allow for any more than the stated and written minumum. Why is more allowed if the renter barks and complains?
And are there any additional checks and balances to test if the renter may be, in fact, financially well off, own other property, and have clearly adequate means to pay MORE rent?
The whole rent control in SF is such a scam, and it keeps many properties in terrible condition, due to lack of reasonable incentive by the property owner.
Abolish rent control. Let the market decide.
@landlord sf – amen
my LL knew full well what RC was when she bought our buildings. so i have zero sympathy. and she doesn’t ask for sympathy, unlike the wimps i’m seeing here.
As long as tenants will consider the landlords the enemy, landlords will behave as such.
Rent control is just like Prop 13, they are both entitlements one is for the owner and one is for the renter! They both have pros and cons!
I have a good friend who got $40K in 2006 for vacating his 1 bdroom apartment, so the landlord would avoid court.
Every landlord has some b/e on payout vs litigate / omi / ellis. It’s a different number depending on the individual. The OP is foolish to be posting in such a forum. LL’s read the internet. I personally would react very harshly to a shakedown even if it cost me more money in the long run. Consider your options and remember what they say about Karma.
I had a next door neighborhood that was a pest for the 2 years I lived there. He lived alone and was in his 40s. He would come home drunk late at night and fall all over the hallway and bang around his apartment at 2am, on a Wednesday. He would sit out front of the building in his van and smoke pot right in the open. He would move chairs and furniture late at night and cause the whole building to wake up. This was a 6 unit 3 story quiet building on Lake st. He wasn’t even living there legally, it was his brother’s apartment, and his brother lived with his girlfriend. He also had a cat which was not allowed in the lease.
After 2 years of trying to get him evicted, including police calls and testimony from half the building, the landlord had to PAY him $5,000 so that he would actually move out. Meanwhile, I lost my job and had to pack up my apartment and moved out immediately.
I try not to be bitter at the world…
It’s not a case of hating the player but..well, 8 years in Pac Heights most of which have been below market rate – being offered a very generous additional 8k by the landlord..
Let’s just say I’m playing the worlds smallest voilin for him/her right now.
Abolish rent control. Let the market decide.
Says someone who has been a massive beneficiary and proponent of Prop 13. You’re a much bigger “taker” and market distorter than this guy. At least pretend to be consistent. Puke.
For the record, I oppose both subsidies. Really: let the market decide.
There was a show last week on the ‘Your Legal Rights’ segment of KQED where they went over tenants rights. Your question came up and they recommended that the tenant see a lawyer. If you call the bar association of san francisco, they will set you up for a free consultation with a lawyer who specializes in representing tenants in SF.
My buyout datapoint: a friend paid his two tenants 40K each to move out of their 1-bedroom apartments in the sunset so he could sell the building. He had tried to sell it with the tenants in place, couldn’t get a decent price, paid them out, then easily sold it as a vacant eviction-free building for 150K more than his original list.
A friend’s mother was bought out THREE TIMES in SF! She netted almost $100,000.
A friend of mine went through this, and ended up settling with his landlord. He got a relatively small payout — about 5K, and another unit that the landlord owned at few hundred dollars below market rent. This was about 6 years ago. The whole process took about a year, which is unusually long, but only because the landlord hired a terrible attorney.
As with anything to do with housing, this is not about what is fair or deserved, but what someone is willing to pay and what someone else is willing to accept.
Rents do not increase for unimproved properties because the owners deserve more money for doing nothing. They increase because some tenants are willing to pay that much.
The landlord demands as much as the tenant is willing to pay in order to grant them exclusive possession when signing the lease, and you who have exclusive posession have the same right to demand as much as the landlord is willing to pay to give up possession. If morality doesn’t enter into the picture when rental prices are climbing, then it shouldn’t enter into the picture when someone is trying to buy you out.
If the landlord genuinely wants to move into the unit, then buying you out saves them the legal fees of going to trial, the time spent in the process, and the (small) risk of loss in case a jury rules against them — OMIs do not automatically win.
Remember that going to trial does not extinguish the requirement for the landlord to pay you the statutory minimum. They will pay that in all cases. The difference between the statutory minimum and what the landlord pays you is the value they place on not needing to go through a lengthy trial. Those people saying that that value should be only $1 are fools.
If the landlord does not want to move in (which is almost always the case), then doing an OMI will prevent them from renting that unit out for 3 years, losing 3 years of market rent, it saves them the costs of the trial as well as having an OMI on record for that building. It means that they lost the opportunity to do another OMI on someone else, which they may value highly.
Because of this, landlords typically value getting a tenant to depart swiftly without an OMI by substantially more than the minimum, and because they value it more, they also pay more.
They do not pay more because tenants “deserve” to be paid more, just as they do not receive higher rents because landlords “deserve” higher rents. In both cases, it is voluntary agreement between two parties.
Remember that you are basically selling away your rights to due process, and no one has a right to tell you that you should not value those rights highly or sell them cheaply.
Thanks Robert, yours is the best level headed advice given without the rancor of others here. I knew this was going to be divisive, but such is life and I do need some advice as I feel Im out of my depth and soon, my home and will have to leave SF as im on fixed income. I am a protected tenant also.
@SooLinSF There is a piece of your story that is missing… have they filed the OMI eviction already?
If so, the case is completely in favor of the landlord and you are very lucky to get $8k extra. You will have to pay court costs to fight it past the court negotiations, as the tenant support groups will most likely only help you on pre-trial negotiations.
If they have not filed the OMI eviction yet, then it’s really a lose lose situation if you don’t come to a negotiated move-out. That is where having a frank discussion with the landlord about your rights and what they are gaining by not filing the OMI. If the only benefit they are getting is not filing the OMI on the record, be happy with the $8k.
You’re not protected. That term means over 60 or disabled with at least 10 years in the apartment. They cannot be OMI’ed. Since you only have 8 years, you can be OMI’ed. Much different negotiating status.
Without knowing what you’re paying it is impossible to gauge. However, a circa 2005 type Pacific Heights rent should not preclude a renter from finding housing in a perfectly nice neighborhood.
SFHs or condos in SF built after 1979 are exempt from both rent AND eviction controls. In preparing to sell my tenant-occupied Corona Heights condo last summer, I sent a letter with the proper advance notice (60 days in CA) notifying tenant the lease would not be renewed and that he must vacate. The tenant moved out at the end of the lease and it did not cost me one cent in San Francisco-style legalized tenant extortion. Cleaned up and staged the place, which then sold quickly. Lesson: buy a post 1979 place if possible, it gives landlords more flexibility and control over their property. A “progressive” BOS majority could always change the rules though. They tried a few years ago but then-Mayor Gavin Newsom vetoed the effort.
The landlord demands as much as the tenant is willing to pay in order to grant them exclusive possession when signing the lease, and you who have exclusive posession have the same right to demand as much as the landlord is willing to pay to give up possession.
I think possession is not the correct term. Possession means ownership in most cases. You probably meant “exclusive use” because that’s all that renting allows you.
If you actually believe this is actual possession, then I’d say you’re pretty representative of the tenant’s mindset.
@SooLinSF:
A basic rule about regulation is that it has to be balanced. Landlords give some, tenants give some. When the relationship is unbalanced the pressure builds up until a breaking point occurs.
In that case, we have the 2 rules, prop 13 and rent control, both designed with very good intentions and both creating a ripe environment for a lot of human pain through the laws of “unintended consequences”
– Rent control/protection makes landlords eager to give up on their tenants, especially long term tenants.
– Prop 13 makes property prices prohibitive by constraining supply and in turn this makes speculation very attractive.
When fully rebuilt houses sell for 2.5M to 3M in the 94114, no wonder 1K/month tenants will get evicted. The pressure is too high. Landlords who cannot correct their rent closer to a profit zone will sell to sharks who will not think twice before doing what they do best.
Look up 460 Noe for a prime example for this. The place was in a state of disrepair mostly due to low rental income. The landlord sold to investors who are finishing to clear out the last hold-out tenant. A very sad story. In 2 years you’ll probably have a great modern new house with a victorian front.
What are the tax implications for a bonus move payment. Does land lord declare as a business deduction or use a 199? Does tenant have to declcare it as income. Or is one of those under the table transactions?
I would take the money and run and avoid having an eviction on my future rental history.
Even if you have good credit it will be ‘interesting’ to apply for a new place when your name pops up in an eviction database on your next apartment application, and your explanation is, “Yeah my old landlord wanted to pay me $13K for the privilege of moving into her own place, but I decided that wasn’t enough, so I took her to court…”
So your a protected tenant too huh?
Bottom line – Landlords should never rent to anyone even close to becoming protected. Don’t ever say it or admit it in public for you would be in violation of the fair housing act. Just don’t do it!
If you make landlords subsidize a class, that class will soon have a tougher time competing.
Good points have been made- I wonder how much the landlord has saved in property tax since owning the building from rent-control-for-landowners (prop 13). Surely more than he is going to pay out!
Most landlords would give up their prop 13 protection for access to market rent.
Say you have a property worth 600K that rents for $1K due to rent control. The landlord cannot properly maintain the building let alone earn anything from his property, even if his property tax is very low.
Apply market rates and then you have some actual cash to work with. The landlord would have his taxes increased to 600/month, but would have room to pay for maintenance.
The source of everything is rent paid. If you don’t have that, the whole renting proposition falls apart and landlords will give up, get out of business, buy out the tenants, or let the wolves take care of the job for them.
In none of the above cases do tenants win in the long run.
If you make landlords subsidize a class, that class will soon have a tougher time competing.
It’s not so much the idea that people will have a tougher time competing (their choice), but the fact that the people who decided for the subsidy in the first place are 1) the beneficiaries and 2) also not the ones paying for it.
A more logical system would be subsidies given through the government. Everyone would be taxed, and subsidies would be income-based. It’s a pure redistribution system. I have absolutely NO problem with that as long as the burden is equally shared.
Let the taxpayer/voter pay for his own decisions.
It’s not so much the idea that people will have a tougher time competing (their choice), but the fact that the people who decided for the subsidy in the first place are 1) the beneficiaries and 2) also not the ones paying for it.
Which is, of course, exactly the situation with Prop 13 as well. Subsidies based on long-term occupation are just a bad idea across the board.
I have evicted 2 tenants for cause in the past couple years and the cost to evict a tenant is between $12K and $30K, without going to trial. Both tenants were long term tenants that were not even on the leases we received after purchase of the building, the long time absentee landlord did not do much landlording and new tenants moved in at some point and took over the building. It took years of documenting everything and in the end, nothing I had on the tenants mattered, nothing. It didn’t matter that they were not on the lease, or over occupancy, nothing at all mattered. The fact that they lived there was all they needed. So, it cost $1500 retainer and you can bet on giving them 6-9 months free rent in lieu of paying them outright $5K or $13K, not to mention, you have no idea what the condition of the unit will be when they finally vacate. That said, I got gouged on my first eviction where I paid $12K in attorney’s fees to finally negotiate 6 months free rent and still had to pay $10K in relocation fees not to mention all the damages to the unit, so when my 2nd eviction agreed to leave for $12K total I paid in a heartbeat.
But, in all honesty my mother lived on Russian Hill for 17 years at a rent of less than $300 per month where I was raised and I enjoyed 5 years in North Beach with panoramic views at below market rent so, I can’t complain, Rent Control gave me a great childhood in a neighborhood we would have never been able to afford. And when we were bought out of our building in the 1990’s to make way for a TIC we got no relocation payment and just moved. When we bought 4 units in the Mission in 2008, I could have held on to that gorgeous rent controlled top floor unit, but I’m not an asshole and I want to do what’s right.
Why anyone would want to be a landlord of a rent-controlled unit is beyond me.
There are more and more non-rent controlled units on the market every day and those landlords will do far better. I’ve had more than a few neighbors move in recent years when their rents increase in some cases by 25-50% from the year before.
I would take the money and run and avoid having an eviction on my future rental history.
————–
This is a moot point. If the tenant has been served with papers by the landlord, it will be on her record. I had to serve a non-protected tenant with eviction papers after I bought a condo. He just about had a cow when he went to try and rent another place because that eviction record was there, regardless of the fact that he did nothing wrong except live in a place that I bought. He did have to explain that it was an owner move in, but it did not impact his ability to rent.
@Lori
I think it matters what ‘papers’ have been served.
Step 0: A letter asking the tenant to call the landlord and discuss the situation in a friendly way.
Step 1: A notice for the tenant to quit the premises for some valid reason.
Step 2: (if the tenant does not leave) An Unlawful Detainer suit. This creates a court order to move out.
Step 3: if the tenant does not obey the order, then there is an eviction (the sheriff, the front door, the drama).
I believe that rental databases track evictions, not unlawful detainers and certainly not 3/30/30/90 day notices to quit.
Again, what ‘papers are served’ matters.
Also, based on your description, it sounds like the person you evicted _was_ impacted by the actions you took to get him/her out. I hope you understood the implications and gave them the ‘friendly option’ first. If that is the case, you should have no qualms.
soccermom wrote:
This is probably true in a strict sense; I’m not a real estate agent and don’t know that much about rental databases.
However an unlawful detainer action is, as I understand it, going to show up on the defendant’s/tenant’s credit report, and will thus be available to any future landlord who pulls such a report while approving a potential tenant’s application.
Every lease I’ve ever signed was preceded by the landlord getting a credit report for me and a FICO score. Since I’ve never tried to get a mortgage, that’s the only way I know what my FICO score is.
You mean in in economic terms?
Obviously landlords who buy and lease out rent-controlled units in San Francisco derive significant non-pecuniary utility from subsequently having the ability to post endless streams of comments on socketsite.com wailing on and on like Edith Piaf about the unfairness of rent control and how poor helpless landlords in this city are being shaken down and otherwise being taken advantage of by the all-powerful tenant lobby.
This is true even though they were aware of the constraints imposed on landlords by rent control before they purchased said units.
Lol,
The tenant has possession. It is not the same thing as ownership. When you rent, you are relinquishing possession, but not ownership.
As a landlord, you should be aware of this.
That landlords are ignorant of their responsibilities and the legal status of tenants is, unfortunately, representative, but I believe the situation is improving as I’ve seen some consolidation where professional property managers displace “self-taught” small time landlords who have no clue about their responsibilities.
I’d like to see exactly what appears on what records and with how much detail. Perhaps the good folks who run this site, or a “plugged-in reader” can oblige?
An OMI eviction and an eviction for non-payment of rent are very different things, regardless of whether there’s an unlawful detainer. If I were a landlord and had to decide on a prospective tenant, I wouldn’t worry about an OMI eviction on their record as long as there’s no unlawful detainer. But I sure as hell would worry about an eviction for non-payment.
I’d be curious to see my own record. I was once served an OMI eviction which was later rescinded. Where do I look to see what a potential landlord would be able to see?
Brahma,
You must assume that all landlords purchased after 1994, since prior to that time 2-4 unit buildings that were owner occupied were not subject to rent control. Therefore, some were not aware of the constraints imposed on landlords before they purchased said units.
“If I were a landlord and had to decide on a prospective tenant, I wouldn’t worry about an OMI eviction on their record as long as there’s no unlawful detainer.”
But, clearly you are not a landlord and misunderstand the process I described above. There is no formal ‘eviction’ which is not preceded by an unlawful detainer suit.
People conflate ‘eviction’ with all sorts of less drastic earlier measures. In most cases the SF real estate courts try very hard for tenants and landlords to reach a settlement in lieu of a formal eviction, even once a case has reached the courtroom.
Also, if you were a landlord and considered a prospective tenant who had pulled every lever in the rent control system to his/her own benefit to be the same as a person who had not done those things, you wouldn’t be a very good landlord. But then, you’re not, so of course you haven’t had to think about it very much.
I am semi floored that Brahma has never once tried to get a mortgage? Mostly bemused, truth be told. But why spend every waking second on a SFRE website if you’ve never even thought seriously about purchasing SFRE?
Don’t you need to be in contract before applying for a mortgage? Something about the lender wanting to appraise the collateral.
Maybe Brahma is the sort of buyer who doesn’t enter into a contract unless he’s certain that the property fits his needs.
Robert,
Point taken. Not my mother language. But I do landlording just fine, thank you. The patronizing section was not necessary and just about wipes out all the credit you attempted built.
Brahma,
I knew you’d pop up. No “bellyaching landlord” this time? As long as rental laws / prop 13 will create a frankenstein market, some landlords will be vocal and ask for a return to sanity. But as a minority, all we can do is denounce the self-inflicted damage on renters. And the ranks of the evicted by greed (aka common sense) is growing daily as a consequence.
Guest666: not all landlords, just the ones that like to bellyache endlessly on socketsite about rent control. I’m assuming those landlords purchased after 1994.
@Brahma.
The Unlawful Detainer is not going to show up on a credit score.
Typically there is a money judgement when someone loses an unlawful detainer and gets evicted, rent that has not been paid, etc.. That money judgement gets tied to an individual when the party to whom the money is owed sends the debt to a collection agency. The collection agency claim will show up on your credit report.
So, if I am renting an apartment to an individual, and I see that they owe money to another landlord, it’s a pretty good indicator that the person is not a good rental risk.
I can only assume (pray?) mortgage lenders would equally scrutinize an application.
And, Plugged-in America, each of us, every man woman and child in America can get a copy of her credit report once per year for free.
Follow these directions:
http://www.consumerfinance.gov/askcfpb/311/how-do-i-get-a-copy-of-my-credit-report.html
Lol,
The fact of the matter is that landlord-tenant law is complex, and do-it yourself landlords are typically uninformed. There are no license requirements and many do this as a side investment rather than as a profession, even though being a landlord is as complex and regulated as say, running a restaurant.
More importantly — and this can’t be emphasized enough — there has traditionally been a power/financial disparity between landlords and tenants that both skews the laws to favor landlords and generally allows landlords to abuse tenants without repercussion, as the tenants cannot afford an attorney and do not get a court appointed defender in civil disputes.
I say “generally”, not always. There are some professional landlords and this number is increasing.
More importantly, in cities like San Francisco, where tenants tend to be wealthy enough to be able to hire their own attorneys, practices that seem natural to landlords elsewhere, such as refusing to accept rent checks, or demanding that tenants leave, or changing the house rules — end up costly to the landlord.
This is why landlords are generally shocked at the rights that tenants have, even though these rights still fall well below the rights of landowners.
The example of possession is important, because if a bank were to attempt to repossess your home, you would take advantage of every legal opportunity to keep your home and would demand a high premium for relinquishing your right to due process to keep possession. Yet landlords expect tenants to not fight similarly when their possession is under dispute. To the landlord it is income, but to the tenant, it is a home.
Tenants actually have far fewer rights than landowners, the typical example being that unlawful detainers are summary procedures, whereas foreclosure is not. You can show up at the courthouse steps years after not making a payment and after ignoring notices of default and get to keep your home if you pay the balance due, but if a tenant pays rent on the fourth day of a three day notice, then they will lose possession. The big story about eviction is how easy it is to take away someone’s home, but landlords are generally stunned that it takes any effort or cost at all. Tens of thousands of dollars is nothing compared to what a bank would need to spend to take possession away from the landlord. This is how much the law is skewed towards ownership, and yet this skew is apparently not enough.
The fact that they have any rights really bothers those who think that ownership completely trumps possession.
So you see the commenter who was accepting rent checks for years from tenants and yet believed they did not have rights to possession because they weren’t on the original lease. It doesn’t work like that. Accepting a check for $X means that you are renting the unit to them for that amount, you do not need a written lease. If they reside in the apartment and pay you, then they have possession and have the exact same rights as if they had signed a written lease. Neither does it matter whether this was an agreement with a previous landlord that the current landlord doesn’t like. She was surprised that it cost her thousands of dollars to get the tenants to give up their homes.
It is this constant shock at what are still secondary protections for people’s homes that annoys me. What are basic rights in any other sphere of life are now viewed as “entitlements” by those who do not believe the law should respect possession.
And the shock seems to originate from non-professionals, who may have formed their notion of the appropriate landlord-tenant relationship in an environment in which landlords could do pretty much anything they wanted without fear of repercussion.
Look, this is all pretty simple. Protected tenants have specific rights and owners wanting to conduct an OMI also have specific rights. If the owner and the tenant want to come to An agreement search commencing no formal legal process so be it. Every landlord and every tenant is going to have a threshold for litigation or settlement. Ultimately it’s the tenant that holds the decision in finding a middle ground, If one exists. At the end of the day it’s the tenant that has to make the decision whether or not they are the ones that want to force the landlord into litigation if in fact they are offered what many would consider a reasonable settlement. Some tenants will seek to maximize their pay out in this scenario to the point of hostage negotiation level tactics. Yes, it is with in their right to do so but ultimately one must live with the fact that they are utilizing terrorist tactics. That’s not to say that there aren’t landlords who abuse the system and many of them get what they deserve, but every situation is unique. But the fact is that there is no way that these two parties are going to resolve this issue in a socket site forum so my best wishes to all those involved I hope you can find a reasonable outcome to the situation.
My bad experience as a one time “landlord”:
Rented my house out for a 3 year period while I transferred for a project outside of California. Tenants knew I would be moving back precisely at the end of 3 years. I gave them 6 months notice nearing my move back date.
Week before I moved back, they informed me that it would be impossible to move out “so soon” given the high cost of rents and “hassle” to move. They wanted $8000 from me. I was shocked, pissed off and flatly said NO. I had to hire a lawyer to legally remove them, and was set up to have them physically removed by the Sheriff on a specific day.
They were out that day. Within a month I found out thru friends they had BOUGHT a house in Noe Valley. I also kept the full damage deposit because they damaged the house.
So much for the high cost of rent and moving hassle.
Never again. IMO, lots of bad tenants around, just like them.
futurist, you have good apples and bad apples. Some tenants are diligent, respectful with your property, and will move out either because they appreciate you as a landlord or simply for the fact that they do not want to live with any grief.
For instance a group of tenants I know rented 3/4 of a house on Noe. 5 co-tenants total, with an existing tenant in the illegal granny unit. The owners had gone out of state for supposedly 2 years, but then decided to sell when the market picked up. They doubled the rent. Of course, this house being a SFH rented as 2 units, these tenants were most probably rent controlled and the increase was illegal.
The tenants and the landlord got a few heated words on the bold move, but the tenants left nonetheless because they wanted to move on. They hired an attorney before they did so.
ianal
soccermom, re-reading what I wrote earlier, I see I was too quick to quip.
First, I muddied the waters by mentioning FICO score and credit report as if they were interchangeable. As pretty much everyone knows, these aren’t the same thing.
You’re of course right that an unlawful detainer action by itself is not going to show up on a credit score, however as you wrote, if there is a money judgement that shows up on one’s credit report, that will have the effect of depressing one’s subsequent FICO score.
Tt’s true that “every man woman and child in America can get a copy of her credit report once per year for free”, but as I understand it, that isn’t going to get you your FICO score.
I’ve looked at lots of copies of my own credit report over the years, but I’ve only been provided with a score after someone else has requested it and then provided me with a copy. I suppose I could pay to obtain a score, but I’ve never had to.
I’ve had landlords (and yes, some of them the bootleg or “amateur” type) who just pull a credit report and don’t get the FICO score. I’ve had others who got the FICO score as a way of winnowing down applicants (“we won’t approve any applicant with a FICO of less than 720”) and then look at the credit report later.
If you’re not sure you’re over a certain numerical threshold for approval, getting a copy of your credit report isn’t going to help you know one way or another if you’ll be approved, knowing your FICO score will.
Where is our mystery poster who is about to be evicted from his/her Pacific Heights apartment? Sounds bogus to me…
[Editor’s Note: Right here.]
I will be moving to Canada later this year for a couple of years. I intend to rent out my condo unit during this time, and would like to move back in on my return to San Francisco. Our building consists of about 20 units, was built circa 2000, Inner Mission.
http://www.sftu.org/omi.html states the following:
Just One OMI Eviction Allowed Per Building
Does this mean that if someone else in our building rented out their condo unit and then did an OMI on their unit, I cannot do an OMI on my unit, ever?
Even if I can verify that there haven’t been any OMI evictions to date, I can’t ignore the possibility of one occuring between my departure and return.
What are my other options?
— Can I legally put into the lease agreement a firm date when the tenant must move out?
— Since my condo isn’t rent controlled, can I raise the rent after the lease expires, forcing the tenant out?
Another less-desirable option is to not rent it out at all and use it as a secondary home when we come back to visit. It would be a wasted opportunity for an additional income stream, but if it’ll prevent a big headache and save tens of thousands of dollars trying to get tenant to move, it’s something I’d consider.
Condos are not subject to rent control. You can just raise to anything you want. If they do not pay, they have to go.
Editor: Thanks for the link. I lost his/her response in the thread! I’m still skeptical…Good discussion either way. I’m one of those amateur landlords and have so far been lucky in building good relationships with my tenants.
Willow – Always a good approach to have a positive relationship with your business partners which is what tenants are. Be careful about being lulled into thinking that you don’t need legal protection though. The best con artists are those who make you feel at ease and let your defenses down.
@Jim T
The only person I feel sorry for with respect to 460 Noe is the elderly landlord that got fed up subsidizing the tenant. As I heard it, the tenant could have been bought-out but he felt too entitled to even negotiate. I think you’re right that the building fell into disrepair but why would a rational landlord keep it up when there is no benefit for himself.
Yes, you can be a great landlord, and take care of your property, fix everything and even offer a low rent.
And still have to deal with 2 con artists like I did.
However, they didn’t get away with their scam.
Hitman,
This specific elderly landlord is not the one doing the last eviction. He sold the building to a group of people who are now doing the dirty work before the redo. I do not possess all the details and there are all sorts of rumours hanging around this building…
Condos are not subject to rent control. You can just raise to anything you want. If they do not pay, they have to go.
Posted by: conifer at March 14, 2013 12:47 PM
conifer,
Thanks for the helpful and reassuring reply.
That’ll be my strategy then. Of course I’ll be a good landlord and let the tenant know that I plan to return in a few years.
lol,
Prior to 2012, the elderly landlord had 3 tenants at 460 Noe. The middle unit left prior to the building being sold in 2012. I believe they were bought out. The bottom unit vacated after the new owners filed their Ellis.
I heard that either the middle or the bottom had been compensated. Unconfirmed.
@lol:
“..group of people who are now doing the dirty work before the redo.”
Fascinating! I’m always wondering if there’s someone(s) that has much less fear and hesitation about purchasing homes with tenants, vs. those of us on the sideline that reflexively dismiss such.
If so, I think there’s some sort of business opportunity here? Quick, somebody write an app! 🙂
Seriously, though, I really do wonder if there’re some that don’t think it a big deal if a house has tenant; because they’ve been through it a few times and are feeling comfortable with building fact patterns for their ends?
I have only read the first 20 comments
Most of witch come from posters like HITMAN
the only comment from a L L is post #3 says
he would pay more to tenet.
Wy so much hatred against rent controlled
renters .
ITS THE LAW AND ANYONE WHO BOUGHT AFTER 1979
KNEW THIS WHEN THEY BOUGHT THE BUILDING.
THEY PAID LESS THAN MARKET PRICE BECAUSE ITS RENT
CONTROLLED IF THEY DO NOT AGREE WITH RENT CONTROL WY DID THEY NOT BUY A NON CONTROLLED BUILDING.
ANYTHING BUILT AFTER 1979 …
ITS SO EASY BUY A POST 1979 BUILDING
AND WY WOULD ANYONE THAT IS STABLE NAME THEM SELF HITMAN.
I was a LL from 80 to 95
+1
The OP simply asked about the current market rate for a buyout.
Someone buying the building either already knows what this is or is being extremely negligent by not finding out. If a building has a leaky roof there’s a price to fix that and you simply need to budget for that at purchase time. That’s the professional course of action.
Instead here we have self styled “Hitmen” and people crying about “terrorist tactics”?? Unbelievable.
“Robert” hit the nail on the head.
In reality, rent control only helps those of us that know and exploit the system. As a free market capitalist, I feel sorry for the elderly and immigrant landlords that get screwed by tenants for being nice. I’ve seen it a million times: an Italian or Chinese immigrant family owned a building for decades and kept rents low to help a person out. As inflation increases, a gesture of kindness becomes and unbearable burden to self-entitled tenants that think it is god given right. The landlord gets fed up with an SF bureaucracy that is administered for tenants and gives up. People like me end up coming in to “do the dirty work” and profit.
I will continue to find opportunities. As rent control continues, I get stronger and stronger. I will drop more and more all cash offers and exploit the system because the Ellis Act pre-empts Rent Control and will always be my leverage point. The Ellis Act will be my set of “rights” to counter the rights entitled to tenants. Please enjoy your time because one day the Hitman or my brethren come around. Maybe one tenant in a building thinks he is a tough guy and ruins payouts for everyone. Guess what? Everyone ends up with a statutory payout and more rental units come off the market for 5+ years. That ends up just helping me by jacking SF rents more and more. It is like and endless rental feedback loop that puts more and more cash in my pocket over the long-run.
Do me another favor – defiantly sit in your living room during the open house. Stake out your territory and discourage the weak buyers… it only makes it easier for me. Then, instead of dealing with an unsophisticated buyer without the stomach for a fight, you will deal with a hitman that is immeasurably more prepared than you.
If the Hitman buys your building, take his 1st offer because it will likely be my your last. Until then, I urge the good tenants of SF to enjoy your “rights”.
” I’ve seen it a million times: an Italian or Chinese immigrant family owned a building for decades and kept rents low to help a person out. As inflation increases, a gesture of kindness becomes and unbearable burden”
Seen it a million times and you’ve never heard of banked rent increases?
That’s “knowledge” of the system right there.
In reality, doing anything in real estate is easier if you have all cash, patience to deal with regulatory requirements or legal proceedings and a higher-than-average tolerance for risk and/or uncertainty. This has nothing to do with rent control, it’s true in general (in a capitalist market economy, however modified) and doesn’t require one to be a zealot to realize.
I agree with peaches, “Robert” was correct. The frequency with which the term “entitled” or the phrase “sense of entitlement” gets flung around on this site by landlords as a general epithet regarding tenants is the proof of that.
“Seen it a million times and you’ve never heard of banked rent increases?
That’s “knowledge” of the system right there.”
You’re limited to 10% increase in a year and you can’t compound banked increases. If the landlord doesn’t increase every year they’re messing it up.
Yup – a million times. Landlords can increase rents every year by the statutory amount and will still end up behind the eight ball. FYI – CPI, which annual alliwable increases are based on, do not include food and fuel prices in their calculations so it is inherently biased… look it up.
Click link for the allowable annual rent increases. Run an example where rent for a unit was $900/month in 1993. Gas was about a dollar a gallon. If you include ALL banked increases through the years you will be paying around $1260/month for the same unit in 2013. Gas today is around $4/gallon. Rent controlled units do not keep up with inflation.
The same unit in a non rent controlled building would be around $3500/month (4x 1993 levels).
What part of 60% don’t you understand? The rent regulations allow only 60% of CPI, so of course they fall behind inflation. Cherry picking one item like gasoline as representative of inflation is bad economics. CPI-U includes food and energy:
http://www.bls.gov/cpi/cpiqa.htm
I do think that most of the problems San Francisco has with rent control could be ameliorated if rent increases matched inflation. I don’t have any hope that this will happen.
As to the topic at hand, let this be a cautionary tale that living beyond your means is likely to lead to a fall. Whatever is subsidizing your lifestyle, be it rent control, parents, a trust fund, whatever, will eventually end, so scrimp and save for that eventuality.
Is the building a multi-unit building with no OMI on the deed? If so, then the owner will definitely not want to do an actual OMI because they will lose the ability to do it to any other unit in the building. Once one unit has been OMI’d, it goes on the deed in San Francisco and no other unit in the building can have an OMI. So this is pretty valuable and can be used to your advantage in the negotiations. If it has already been filed, you have no leverage and should take the money and go.
Find some cheaper place to live, perhaps in a cheaper neighborhood in SF and use the $8-20k to cover the move in costs. Try and save more for your next move. Since you don’t own a place, you will always be subject to your landlord’s whims. Rent control only protects you so much, as you have seen.
Hitman is only smart at showing his Hate. Look it up Dude, in the 80s LL got a 8% increase in rent for 3 YEARS (8% each year).
IT’S so simple buy a non rent control apt building. No one wants to talk about this except anon. My Father was a LL , I was for 20 years, my brother has 20 rentals.
I only buy rent controlled building because that is where the opportunity is – I do the “dirty work” and help to gentrify our lovely city.
I’ll hold on to non-rent controlled buildings to be a landlord. I’ll trade in and out of rent controlled building as opportunities present themselves. I shall be fluid like water.
I wish non-rent controlled buildings were so abundant as you might portray them but the truth is that they are gold in this city and few become available at a reasonable price.
Mark – I love you and your naïve sentiment. Silly little boy!