Rent Control
San Francisco Rent Control Relocation Expenses: Who?s Entitled To It, How Much, And When It Is Payable
Posted by: Kenny Tan
January 28, 2012
The rental market in City of San Francisco has held up well throughout this economic recession. Rents just keep on going higher in San Francisco when the general real estate market in the United States is on the decline.
There's never been a better time to invest in rental properties in San Francisco!
If you're thinking of investing in rental properties in San Francisco, you need to be aware of the current rent control laws in San Francisco which place certain restrictions on your ability to remove the rental unit from the market for your own living - should you plan to do so some time after you've used it for rental.
Like many Rent Controlled cities, San Francisco has a rent control law that protects tenants - and certain eligible occupants against no-fault evictions where the landlords simply want to take the rental units back for their own or their immediate relatives' living.
However, landlords may do so if they comply with Section 37.9(c) of the San Francisco Rent Control Ordinance. It requires that landlords pay relocation expenses to "Eligible Tenants."
Who Are "Eligible Tenants" ?
"Eligible Tenants" have been defined broad enough to include any and all authorized occupants who've occupied the rental unit continuously for at least 12 months, regardless of age. What this means is that it doesn't matter whether an occupant is named as a tenant on the lease as long as he or she is able to prove his or her residency at the rental unit for at least 12 months.
How Much Are The Relocation Expenses ?
There are two categories of relocation expenses under Section 37.9(c) the San Francisco Rent Control Ordinance. The San Francisco Rent Board periodically publishes a scheduleon its website on the required amounts for relocation expenses. You should refer to it to obtain the exact amounts.
"Eligible Tenants" - Presently each "Eligible Tenant"is entitled to receive $5,101 subject to a cap of $15304 regardless of the number of "Eligible Tenants" in the rental unit.
"Eligible Tenants" Who Are Disabled or 65 years or older and Household With Minors. Each Eligible Tenant who has these characteristics which qualify them for the additional protected status is entitled to an additional sum of $3,401. However, as written, the ordinance seems to limit a person who's 65 years or older and also disabled to only an additional $3,401 and not twice that amount. However, a household with minors who are also disabled shall receive $3,401 just for being a household with minors plus an additional $3,401 for each minor who's disabled. There's no cap for this category!
Therefore, a big family who rents the unit from you could potentially be entitled to a larger sum of money for relocation expenses just based on the sheer number of people.
Here's an example of how much the relocation expenses would be for a single mother less than 65 years of age with two minor children where one of the minors is also disabled. They have lived at the rental unit continuously for 8 years and the landlord is aware of and has previously approved all three to occupy the rental unit.
In this case, all three of them are "Eligible Tenants."Therefore each one of them is entitled to receive $5,101 for a total of $15,303 for the entire household. Since the amount is lower than the cap of $15,304, this lower amount will be used. Additionally, the household has at least a minor and is therefore entitled to an additional amount of $3,401 just by being a household with minors. And since one of the minors is also disabled, this minor gets an additional $3,401. Under this example, the landlord has to pay a total of $22,105 - a rather significant amount!
When Should The Relocation Expenses Be paid?
Upon deciding to remove the rental unit for the landlord's own living use, the landlord should provide proper notice to the tenants and tender 50% of the required relocation expenses to the tenants at the same time that the notice is served. Under the example given above, the amount to tender would be 50% of $22,105 - that would be $11,052.5. The remainder shall be paid when the tenants vacate the unit.
This blog discusses only the eligibility and amounts for the relocation expenses. There are other additional requirements and restrictions that have not been discussed here and will be covered on a separate blog in the future. You should always consult the San Francisco Rent Board before you proceed to evict.
