What Tenants Need to Know When a Landlord is Selling their Building (Part Two)
When a landlord is selling the building you live in or has sold it to a new owner already, it creates a great deal of uncertainty, and tenants’ stress is understandable. This month, part two in our two-part series addressing common issues that arise when tenants learn their landlord is selling or has recently sold their building.
No Fault Evictions
As I mentioned last month, your landlord cannot evict you simply because they are selling or have just bought the building you live in, provided you live in a “just cause” for eviction building. While the sale is not a basis for eviction, we do see a higher incidence of “no-fault” evictions such as Owner Move-In evictions, and Ellis Act evictions . Often times we see landlords threaten Owner Move-In and Ellis Act evictions and then back off after tenants stand up and call their bluff.
1. Owner and Relative Move-In Evictions
Owner Move-In evictions, or “OMIs” are one of the 16 “Just Causes” for eviction in San Francisco (also in Oakland and Berkeley but the rules vary in each city/municipality). An OMI is just what it sounds like: it’s when a landlord evicts a tenant in order to use the home as their own primary place of residence.
To evict a tenant via OMI in San Francisco a landlord must own a certain percentage of the property, provide 60 days written notice, including information on who will be moving in, and can only recover possession if there is no comparable, vacant unit available. Relative move-ins are only available where an owner already occupies a unit in the building.
Tenants who have resided in a unit for one year or more are entitled to relocation payments, PLUS additional payments for each elderly or disabled tenant and for households with minor children.(for more info on OMIs visit sfrb.org). There are exceptions to a landlord’s right to an OMI so check the Rent Board’s website for more information.
2. Ellis Act Evictions
Less common than OMIs are Ellis Act evictions. This state law gives landlords the right to “go out of the rental business” by evicting all the tenants in a building in one fell swoop. Many landlords threaten this type of eviction in order to coerce tenants into accepting buyout offers.
As with OMIs, there are a number of restrictions pertaining to the Ellis eviction process. In San Francisco tenants are entitled to 120 days written notice for an Ellis eviction as well as the same OMI relocation payments, while senior and disabled tenants are entitled to a full year notice. The Ellis Act also prohibits landlords from re-renting out any part of the building for five years, and provides that displaced tenants have a right of first refusal to return to the unit if it’s put back on the rental market within ten years.
Because Ellis evictions can seriously impact the long-term value of a building it’s usually a last resort for owners. It is also a drawn out process, which can be further dragged out when tenants refuse to vacate and fight eviction efforts in court. With that in mind, if your landlord mentions they are considering Ellis’ing your building if you won’t agree to a buyout they may very well be bluffing.
3. What do I do if I Get Served with a No Fault Eviction Notice?
While there is a special place in hell for people who buy buildings occupied by long-term tenants only to turn around and evict them, this is an all too common practice in the Bay Area. Buyers usually get a better deal on properties that are occupied than those that are vacant. House flippers / real estate speculators can turn a tidy profit by buying out or evicting the tenants in buildings they’ve just bought, and then remodeling the properties and selling them off in whole or in part. We see this most commonly in smaller buildings (four units or less), which is why we generally advise tenants shopping for a new place to live to consider renting in larger buildings (over 4 units).
That said, what do you do if you get served with an Ellis or OMI? The answer, like many in law, is it depends. To find out what makes the most sense for you, we strongly suggest talking to someone about your situation, be it an attorney or housing rights advocate. If you do not move out during the notice period (60 days / 120 days for example), your landlord will have to file an eviction lawsuit to enforce the eviction notice. You have a right to fight this eviction.
Owner move-in evictions have been in the news lately due to the reported frequency of fraudulent and bad-faith evictions (i.e. where a landlord fails to follow the law / move in) and the SF Board of Supervisors recently passed a new amendment to the Rent Ordinance further strengthening the rules on OMIs for tenants. If you suspect your landlord doesn’t intend to move in, you may consider moving out and keeping tabs on the property. If your landlord doesn’t move in you may have grounds for a lawsuit for wrongful eviction.
Buyouts are another common occurrence when a property changes hands. For the uninitiated a buyout is just what it sounds like – a landlord offering to “buy out” a tenant’s tenancy in a unit in exchange for cash. Sellers can get a higher price if the property is vacant, while buyers have an incentive to get rid of tenants paying low rent so they can maximize the return on their investment. For a full run down on buyouts check out our article on the subject here.
Landlords often bring up buyout discussions in conjunction with the threat of a no-fault eviction. In many cases, these are simply tactics designed to pressure a tenant into taking a deal for less money, but it’s not always easy to know the difference.
If you’re facing harassment or pressure to accept a buyout, be cautious. Consider researching your landlord at the San Francisco Rent Board or talking to a tenant counselor at the Tenant’s Union, Housing Rights Committee or other non-profit before jumping into negotiations. You can also pick up a list of recent buyouts by neighborhood from the San Francisco Rent Board for context on what a “fair” buyout might be.
Finally, you can make like a ’90s drug PSA and just say no. Tell your landlord in writing that you are not interested in further discussions. While a lump sum can be tempting, it may not go very far if you planning to rent elsewhere in the Bay Area.
If your building has recently changed hands or you think a sale is pending, learn as much as you can about what’s happening, what the buyer’s plans are, and, most importantly, tread cautiously if your landlord gives you a form to sign or indicates they want to talk to you.
Whatever you do, take advantage of the many resources available at one of San Francisco’s many tenant organizations first, and don’t let yourself be pressured into taking a deal or moving out.