(415)552-9060
Buyouts

Buyouts

by | Jan 18, 2010 | Tenant Buyouts

Buyouts

“It’s a game of chicken”—Ted Gullicksen

If you negotiate a buyout with your landlord, you don’t want to be the person plummeting off the cliff. That is why we will help you if you decide to take a buyout.

What are buyouts?

A buyout is simply a negotiated settlement before litigation in which the tenants are paid money to vacate and all of the parties release all of their rights. In rent controlled jurisdictions like San Francisco, landlords often offer tenants money to vacate their unit and waive any future tenants’ rights they have. A landlord who offers a buyout is literally purchasing a tenant’s future rights to the unit.

Landlords offer buyouts to tenants for several reasons.

A couple of years ago when property was hot, developers bought buildings to turn them into TICs with the eventual plan to convert the units to condominiums. A TIC (tenancy-in-common) is a shared ownership of a building. In these cases developers sell shares in a building. Each of the shares includes a right to exclusively occupy a given unit in the building. Often developers used the infamous Ellis Act to clear buildings of tenants. I’ll save the sordid history and diastorous consequences  of the Ellis Act for another post.

Another scenario occurs when an owner wants to move into a given unit in a building. A landlord could be entitled to evict a tenant using the just cause of owner-move-in eviction (OMI).  In San Francisco an owner must jump through several procedural hoops and have the intent to live in the unit as his principal place of residence for three years.

Sometimes landlords are out and out lying about their intentions. They serve Ellis notices and OMI notices as a pretext to evict rent-controlled tenants to simply raise the rents. As you can imagine, there have been many documented abuses of these landlord rights resulting in many wrongful evictions. But unfortunately there are many other tenants who shrug their shoulders and move.

If you are offered a “cash for keys” buyout by a foreclosing bank or a sleazy real estate agent who claims to represent the bank, never take it unless you consult with an attorney or a tenants’ rights group.

Finally there are landlords who offer tenants buyouts just to get them to move to raise rents. Think the notorious CitiApartments and their tactic of tenant harassment with buy-out offers ten times a day. You should almost never consider a buy-out when you are offered one by a big landlord you know can’t even come up with a pretext to evict you.

When can you expect a buyout?

Usually buyout offers come with changes in ownership. A new landlord purchases the building or the greedy children inherit the building from your nice old landlord who immediately made repairs when you requested them and who brought you cookies at Christmas. If there are no changed circumstances in ownership a buy-out offer can indicate a landlord’s future intent to sell the building.

Most legitimate buy-outs are offered to tenants in buildings with six units or less in San Francisco because condominium conversion is prohibited in buildings with more than six units.

Get as much information as you can about the landlord.

Like almost all other decisions you will make regarding your tenancy, this is a business decision. Gather as much information as you can. Talk to other tenants in the building to see if they have been approached by the landlord. Has the landlord evicted tenants like this before?

In one case we represented a long-term tenant with an OMI threat from the landlord. He did excellent research and found that the landlord had served an OMI notice to another tenant in another building a year previously. Clearly the threat to our client was bogus because the landlord couldn’t live in two places at the same time.

So take some time to find out what other properties the landlord owns. Property ownership is a public record available through the Assessor-Recorder’s office. Does the landlord claim he wants to move into your one-bedroom, when in fact, he lives in a mansion in Forest Hills? You want to know this before you negotiate.

Eviction notices are also filed with the San Francisco Rent Board. Sometimes you can determine a landlord’s true motives by understanding his past eviction pattern.

Think it through and do the math.

Remember, if a landlord tells you he’s thinking of moving in or removing all the tenants in the building using the Ellis Act, in San Francisco, you will be entitled to relocation payments pursuant to Rent Ordinance §37.9C—as of this writing, approximately $5,000 per tenant up to three tenants, $3,300 for each disabled or elderly tenant and $3,300 for families with minor children. Check the linked chart. Notice that Ellis payments and qualifications are slightly different. That’s your bottom line. If the landlord offers less, he’s a Cheese Ball, too cheap to hire a lawyer and too stupid to read the law.

Next, think about the additional rent you will be paying if you move. You should factor that in, especially if you think the landlord might be offering you a buyout because the eviction threat is a pretext.

Finally think about how much time you will need to find another place to live and remember the more time you request the less money you will be offered.

Citistop, the tenants’ organization that played a huge role in the demise of CitiApartments, has some very good advice about buyouts from the perspective of tenants whose landlord never had a basis to evict them.

Tenant buyouts, especially those designed to empty units for TICs, deplete rent controlled housing stock. Yet, in some cases, notably Ellis Act eviction threats or quasi-credible OMI eviction threats, a tenant may not have any defenses to a future eviction if they stay and fight it out.

For some tenants, a buyout may be preferable to suing for wrongful eviction in the future, especially if the landlord’s rationale to evict may be sound. I believe it is extremely important to develop a strategy that considers all of your options and all of the pitfalls before you negotiate a buyout.

Call the Tenant Lawyers now for a free consultation.
(415) 552-9060

Share On Facebook
Share On X
Share On Reddit
Share Via Email
Share On Telegram
Contact Us
Sitemap
Privacy Policy
Is This Legal Advice?

What Rules Govern Master Tenants?

What Rules Govern Master Tenants?

by | Nov 4, 2009 | Roommates

What Rules Govern Master Tenants?

If you’re a sub-tenant/not on the lease, what are your rights? Can the master tenant kick you out, or raise the rent, at his/her discretion?

Some master tenants just can’t resist throwing their weight around. The really bad ones think they own the unit. They can be as oppressive as the worst landlords. “It’s my way or the highway, Chucko!”

The worst master tenant doesn’t even live with you. He tells you that his stuff in the closet means he’s a roommate and he can drop in whenever he wants. He charges the subtenants $1,000 per month per room. Because the total, rent controlled, rent is only $400.00 per month, he can rent a really cool loft in Los Angeles while he works on his screenplay…until your landlord finds out.

Imagine the brouhaha when the landlord finds out he’s losing, say, $2,600.00 per month or $31,400.00 per year. You can bet that everybody’s going to get the boot. Not to mention that master tenants who pull this shit are the stuff of urban legend to the landlord class. They screw up rent control for the rest of us. But I digress…

Your rights in San Francisco with regard to a master tenant can be found in the Rent Board Rules and Regulations § 6.15C. A master tenant may be able to evict you without one of the just causes in the Rent Ordinance only if, “prior to commencement of the tenancy, the Master Tenant informs the tenant in writing that the tenancy is not subject to the just cause provisions of Section 37.9.” Section 37.9(a) lists the just causes, like nonpayment of rent, nuisance, etc.

Usually a master tenant will include that language in a sublease. If you were not informed

in writing that you could be evicted at will, the master tenant cannot just throw you out. Even if a master tenant can evict without cause he must provide you with a 30-day notice or a 60-day notice if you have lived in the premises for more than one year.

Master tenants don’t raise rent, landlords do. One of the more controversial provisions of Rules and Regulations 6.15C(3)(a) provides that a master tenant cannot charge a subtenant more than his proportional share of the rent, with differential calculations including services provided by the master tenant, room size comparison, etc. Arguably, if the master tenant increased your rent without a corresponding increase from the landlord, he may be in violation of the Rules and Regs.

Share On Facebook
Share On X
Share On Reddit
Share Via Email
Share On Telegram

Call the Tenant Lawyers now for a free consultation.
(415) 552-9060

Contact Us
Sitemap
Privacy Policy
Is This Legal Advice?

Wet, Cold, And Moldy

Wet, Cold, And Moldy

by | Oct 21, 2009 | Habitability

Wet, Cold, And Moldy

Wet cold and moldy.

I live in the Panhandle area in a 6-unit building. My apartment building has some serious temperature and mold issues.

Our common entryway has a broken skylight that leaks every time it rains. The first floor rug is now discolored and smells of mold. The landlord insists he’s “done as best he can” to fix the leak.

All of the units’ bedroom closets have huge mold problems on the walls. The landlord’s best response is to just to keep bleaching the walls. Other areas of each apartment have mold the landlords only “solutions” are to cover the areas over with paint or tile.

The building’s steam heat works inconsistently. The timer doesn’t seem to be working correctly. The windows don’t seal properly or have chunks of wood missing from the base. When tenants complain of the cold, the landlord’s only response to this is to apply cheap foam weather stripping (that’s since fallen off) to the windows.

For what we pay, we shouldn’t have heat or mold issues. So my question is, besides putting our own money into the building, can we as tenants do anything to turn our building around and into shape?

Dear Wet, Cold and Moldy in the Panhandle,

As I write this, the first big storm of the season has begun. It’s time for you and your fellow tenants to get proactive. I get the sense that everyone in the building is fed up and that you might be able to work together as a team. That’s great. Remember, there is safety in numbers.

The landlord says he’s “done as best as he can.” What is he–a four-year-old at a Berkeley T-Ball tournament? Shall we give him a trophy just for showing up? This is the type of landlord I like to call a Cheese Ball, a cheap buffoon who thinks he can own an apartment building, take all the tax deductions, collect the outrageous rent and not spend a dime to maintain it. Oh, he’ll bitch and moan about rent control and whine about all the labor he’s expended, but you must understand that this Cheese Ball wouldn’t maintain his property if he could charge $10,000.00 a month per unit and he would never pay a professional to fix anything. I can go on and on, but maybe I should answer your questions.

The landlord is breaching the implied warranty of habitability in your lease. The landlord has the duty, even if it is not in the lease, to provide you with a “habitable” unit. California Civil Code §1941.1provides a long list of characteristics of a unit that make it “untenantable” or uninhabitable.

Roof leaks and the problems caused by them, i.e. mold, cracked paint, and of course, water dripping inside are usually clear and substantial breaches. (Civil Code §1941.1[a]) The problems you describe indicate a more general roof problem than just the skylight. While mold and mildew occur frequently in bathrooms without roof leaks, the closets are a tip-off to me.

As a former housepainter, I know that you cannot just paint over mold and mildew; it grows through the paint. And even if you kill the mold, it will return if the roof has not been adequately repaired.

Windows that rattle and leak air and, as you indicated in the unpublished part of your letter, sills that are rotted off are also violations of Civil Code 1941.1(a). Cheap foam insulation doesn’t count as repair.

Finally inadequate heat is a violation of Civil Code 1941.1(d). San Francisco Housing Code §701(c) also requires that a permanent heating source be provided that is capable of maintaining a temperature of at least 68 degrees Fahrenheit in all habitable rooms, excluding bathrooms and hallways. The Housing Code specifically requires this level of heat to be provided 13 hours a day, from 5 AM to 11 AM and also from 3 PM to 10 PM. See Rent Board Topic No. 257.

All right, now you know that it’s likely the landlord violated the law. What do you do about it? Normally I would suggest you write your landlord a letter outlining all of the problems and asked him to fix them in a short period of time, preferably not before the next ice age. BTW, if you haven’t already done so, begin to communicate with the landlord only in writing. Even if he can’t read, he will understand that your relationship has changed.

But in this case, Mr. Cheese Ball has already been notified. He’s done his best. Make a list of everything that seems questionable, call a housing inspector from the SF Department of Building Inspection and arrange a time for the inspector to visit all six units and all the common areas. Show the inspector everything. If the roof is accessible, cajole them to go up there or refer to another inspector who will. Also check to see if the building has complaints or violation from the past.

The DBI will issue a notice of violation (NOV) for the various issues and require the landlord to repair them in thirty days. You now have good evidence to use when you file a petition at the Rent Board to reduce your rent due to a substantial decrease housing services or suing the landlord in superior court for breach of the warranty of habitability.

You and all of your fellow tenants at the building should join the San Francisco Tenants Union. They can provide more specific counseling based on the facts of your situation.

Remember, you pay your rent in exchange for the landlord providing a service, nothing more or less. If he gets pissed off because you make him do his job, it’s his problem. Don’t let him make it yours. Good luck.

Share On Facebook
Share On X
Share On Reddit
Share Via Email
Share On Telegram

Call the Tenant Lawyers now for a free consultation.
(415) 552-9060

Contact Us
Sitemap
Privacy Policy
Is This Legal Advice?

What Rules Govern Master Tenants?

Bad Master Tenant

by | Jul 8, 2009 | Roommates

Bad Master Tenant

What is a master tenant? In residential tenancies, a master tenant is someone who is the “senior” member of a household with roommates by virtue of the fact that they are the last remaining named tenant on a lease. So am I going to regale you with stories of head-banging, raunchy, meth induced sex at 3 a.m.? Piles of dirty dishes for days and pilfered chicken pot pies? No. In rent controlled jurisdictions the worst master tenant will unscrupulously jeopardize the roof over your head. Think Bernie Madoff.

A bad master tenant can be the roommate you rarely see. You pay your rent to them once a month when they breeze into town or you mail them the check in LA. Sometimes the bad tenant doesn’t even have a room in the apartment where you live. But in other scenarios, the bad master tenant lives as a roommate in your midst. The truly bad master tenant collects all of the roommates’ rent and then, for whatever reason, doesn’t pay the landlord.  Usually you find out about the problem too late, after you’ve been named in an eviction lawsuit (unlawful detainer) or an eviction notice from the sheriff is posted on your door.

Almost all residential leases, old or new, have clauses that prevent tenants from subletting. You should understand that subletting is not just vacating the entire unit and renting it to someone else. You are also subletting if you get a new roommate or replace an old one. Most leases require the landlord’s written consent to sublet. Without that consent a master tenant is already in breach of the lease when he rents to a roommate. San Francisco law also requires that a unit is a tenant’s primary place of residence to keep the price control provisions of the Rent Ordinance in place. In San Francisco, if a landlord finds that a master tenant does not live in the unit, he can attempt to increase the rent to market rate.

A few weeks ago, I met with a tenant who rented a room for an absentee master tenant. She lived with 3 other roommates. They were each paying about $1,000 a month for their rooms in a large well-located flat. He would come around occasionally and stay on the couch, but everyone understood that he lived in Southern California. One day the landlord served the household with a three day notice to quit. It turned out that the master tenant had not paid the rent, which was $2,400 per month, in several months. Evidently he decided that $1,600 a month for doing nothing wasn’t enough. He had been subletting like this for years.

I hear this at the Tenants Union more times than you might think. I really get pissed off because these are the tenants that ruin the concept of rent control, proving landlords’ points that tenants, in general, take advantage. That isn’t true, but, as a tenant’s rights advocate, my job doesn’t get any easier when examples like the above are thrown in my face.

In San Francisco, Rent Ordinance Rules and Regulations §6.15C requires that a master tenant can only charge a more or less proportional share of the rent based on the amount the master tenant is paying.  A subtenant who feels that he is paying too much rent can petition the Rent Board for a decrease in the rent.

What should you do before you sublet?

•   Find out if the master tenant has permission from the landlord to sublet to you.
•   Ask for a copy of the “master lease” that controls the terms of the tenancy with the real landlord.
•   Certainly find out how much total rent is being paid for the unit.
•   If it doesn’t look like the master tenant is living in the unit, find out why and in most cases just pass. Keep on looking.

How can you tell if the rent is being paid? That’s more difficult, but if the master tenant is experiencing money problems, that may be an indicator. If he has no visible means of support, isn’t working but still pays his bills may be another indicator.

There is nothing more frustrating for me than telling a tenant that even though they paid their rent to the master tenant, the landlord still can evict them because the master tenant didn’t pay the rent. Paying the rent to the master tenant is no defense to an unlawful detainer. Sure you can sue the master tenant, but the landlord has the right to collect his rent or regain possession of the unit by evicting you.

Master tenants are essentially landlords, some good, some bad.

Share On Facebook
Share On X
Share On Reddit
Share Via Email
Share On Telegram

Call the Tenant Lawyers now for a free consultation.
(415) 552-9060

Contact Us
Sitemap
Privacy Policy
Is This Legal Advice?