Tenant Troubles: My Landlord Is Selling The House I Live In, Do I Have To Move Out?

My husband and I live in a two-bedroom single-family home in San Francisco, a cottage built in 1922 (no in-law unit, no garage, just a cottage & a large yard). My husband moved into the place eight years ago, and I moved in with him over five years ago. My husband has been the master tenant since I moved in. Our landlord lives in Santa Barbara and has always rented the house to family or friends of family (we’re in the latter group). We have one of those absurdly good deals: our rent is nearly a third of market rate ($1300/month) and it hasn’t been raised in five years. In exchange we are responsible for all utilities, and if any maintenance is needed we just have to notify our landlord, pay the bill ourselves, and deduct it from the next month’s rent.

Of course, all good things must come to an end. Our landlord is planning on selling the house in order to get some money for a down payment to buy a home in Santa Barbara (he is newly married and ready to start a family). The realtor he’s using has been very honest and forthcoming with us and told us the estimate is a bit bleak: a LOT of significant work needs to be done on the house. He’s offered to sell the house to us directly for $600k. If we don’t buy it, he wants us to vacate the house before he puts it on the market.

We are most likely not going to buy, because there’s no way we want a $600k house that needs over $100k in repairs. Obviously this means we need to move out, but I don’t know what our rights are as tenants since there are so many exceptions to rent laws for houses. I’m pretty sure this falls under the Ellis Act, which means we get four months notice to vacate and relocation money. I don’t know if our landlord is aware of the relocation money, since he’s been extremely hands-off for nearly 10 years and doesn’t even live anywhere near San Francisco. Even though we’ve had a good, non-contentious relationship with him, I want to be armed with all the relevant facts. Besides, that relocation money is a huge boon to getting a place that lets us keep our dog! Any help you can give me is greatly appreciated.

Tenant Troubles Archives

Dave’s here to answer your questions every Wednesday, so send them to him at tenant@sfappeal.com. Here’s what to make sure to include in your letter.

You asked about your rights so I’m going to lay them out for you. I’ll let the readers discuss your moral obligations.

Because the house was built in 1922, it is subject to the just cause provisions of the San Francisco Rent Ordinance section 37.9. The landlord cannot ask you to move or serve notice to evict you simply because he wants to sell the house.

Of course, selling the house devoid of tenants is ideal for for staging and marketing it for maximum profit. I see various estimates of the value of selling an empty unit/house ranging from 5-25% of the market value of the property. If the landlord wants you to leave before he sells, he will have to negotiate a deal with you to vacate.

The landlord can evict you using the Ellis Act (a 1985 gift from California legislators greased with payola from real estate industry). The landlord can “exit the landlord business,” evict you, and sell the house. A future owner’s ability to rent would be prohibited/severely limited for ten years, but that isn’t often a concern for the buyer of an overpriced San Francisco house who simply wants to live there.

You and your wife would have 120 days to move and receive relocation payments of $5,210.91 apiece or an additional $3,473.93 per disabled tenant.

Or he can increase the rent because you live in a single family dwelling and your tenancy commenced after 1995. (See my comments on the reprehensible, immoral Costa Hawkins Act last week.)

Costs Hawkins tells us that the landlord can increase the rent to any amount he wants. Even if the landlord uses the current market value as a barometer, using your estimate, he can increase the rent to $3,900.00 per month.

If you move based upon a rent increase you cannot afford, you could argue that the landlord’s dominant motive for increasing the rent was to make it high enough to force you to move rather than continue to rent it–that really intended to sell the house. There are a few cases in the courts litigating that issue right now.

If you don’t move and the landlord sells the building with you in it, the new owner can increase the rent.

If a new owner wants to move in, he can evict you under Rent Ordinance § 37.9(a)(8). In that case you and your wife will be entitled to $5,207 apiece and another $3,472.00 if you are disabled, with 60 days to vacate.

Suffice it to say that your good, non-contentious relationship with the landlord may vanish as fast as you can say “relocation money.”

the author

Dave Crow is an attorney who specializes in San Francisco landlord tenant law. However, the opinions expressed in these articles are those of the author, do not constitute legal advice, and the information is general in nature. Consult the advice of an attorney for any specific problem. You understand that no attorney-client relationship will exist with Dave Crow or his firm, Crow & Rose unless they have agreed to represent you. You should not respond to this site with any information that you believe is highly confidential.

Please make sure your comment adheres to our comment policy. If it doesn't, it may be deleted. Repeat violations may cause us to revoke your commenting privileges. No one wants that!
  • cedichou

    $600k for a SFH in SF? I’ll buy this place and keep them in. Please share their contact info!

    • do-the-math

      Right?! I was going to say something nicer, but the more I think about it, the more it seems the tenant is an entitled brat.

      The math is pretty simple. The first part of the equation is that the $1300 rent will very shortly be a thing of the past. So we can forget about that. The things to weigh going forward are how long that $10400 payout will go toward market rate rent somewhere (hint: not long!) vs how much your mortgage payments are (with tax incentives included) on a $600k off-market sale. I know which one I would choose. As to that “$100k of significant repairs,” well, they weren’t significant enough to prevent you enjoying the house for the past 8 years, were they? (Hint #2: if you DIY over the future years, they will not cost $100k.)

      Another way to phrase the 2 choices: you can put your money where your mouth is and invest in the home you already live in — that’s called being part of the community. Or you can take your $10k payout, let a flipper buy the house and slapdash the work and resell it 8 months later for $850k while you move to Oakland and join the complainers ranting about how you were ‘priced out of the city’.

      The family across the street from me was in this situation just 1 year ago, absent the option to buy. They would have killed for that option. So they were (legitimately) forced to move to oakland and a flipper shyster contractor did exactly what I describe above (sans permits).

  • not hanks

    God, Reading this article just made me feel disgusted for this entitled brat.

    “Our landlord is so nice giving us a great deal, we pay 1/3rd what we should on rent!”
    “Anyways, How can we get more money out of him? teehee!”

    I am glad in this situation you are unlikely to get anything at all.

    • dangerousjay

      They’re likely to get about $10,000. Which is how much it costs to move into pretty much any other place in SF these days.

      Tenants have a shred of a chance to make it in SF because we fought for and achieved housing rights over the last 40 years. Why is she an entitled brat? Because she hopes to be able to afford to move when she’s eventually kicked out?

      Are you just another armchair Ayn Rand commenter whose politics never matured after reading the Fountainhead in 9th grade or do you have an original idea about why the world would be better place if landlords could just kick people out whenever they felt like it?

      • not hanks

        Luckily, she will get nothing. The landlord can (and will) just raise the rent to market and price her out. No payout required. I have no sympathy for someone who games a persons good will only to attempt to gain some more towards the end. Good riddance to her and I hope she enjoys Oakland at twice the price.

        Not going to even bother to get into a rent-control discussion with you, as we have fundamentally different views. Just as I dont demand a right to live in aspen, I dont think tenants have this god-given right to live in a certain zip code.

        Shes a brat because someone has been subsidizing her rent with no requirement to do so. He could have raised the rent at any time in the past x years. Now, as a thank you for not doing that, she wants to demand relocation payment? This is why landlords end up with the stigma they have- Greedy tenants force them to pull in every cent they can, lest they get fucked in the end for trying to be a nice guy.

        • dangerousjay

          The certain zipcode in SF is becoming the entire city of SF. Rents are skyrocketing again. Working class families being forced out in droves. And schools are emptying because people can’t afford to raise kids here anymore. You and the other landlords have the luxury to buy in to the invisible hand theory because you’re riding the wave up now. The landlord in question rented to her 6 years ago because the economy was in the toilet. Landlords all over the city were LOWERING rents during the so-called Great Recession to keep tenants from moving. Now he wants to cash in. That’s not what I’d describe as generosity.

          The end result of your libertarian housing vision of landlords doing as they please is an American Apartheid.Two systems, separate and unequal.

          Greedy tenants? That concept is an ontological impossibility..

          • not hanks

            You conveniently left out many points of what I said.

            Landlord leaving rent low artificially? (he could have raised it at any time to market) Check
            Landlord is not rich fat-cat, does not have enough money to buy his own house? Check
            Landlord been hands off and generally been a good guy? Check

            Greedy Fu#*ing tenant who isn’t happy with her insanely low rent for xx years now wants a send off gift? Check

            This is why no landlord should EVER do a tenant a favor. Anything you give, you never get back.

            God helps the landlord who gets you or her as a tenant- Thank god we always check references so we dont end up with people like you.

          • dangerousjay

            He (or she; women can own property too–did you know that?) left the rent low because the property is a shitbox (needs at least $100,00 in repairs.)

            Owner is buying a house is Santa Barbara!! Don’t you agree that not everybody should be able to live in Aspen or Santa Barbara or San Francisco if they can’t afford it?

            Hands-off landlord = absentee landlord. You should get a job renaming onerous professions. I heard somebody renamed sludge “bio-solids.” I bet you could top that.

            http://www.sfgate.com/bayarea/article/Tech-boom-forcing-longtime-S-F-family-out-of-home-4843955.php

            Go wash the blood off your hands, you scumbag land-owner.

          • not hanks

            If it was such a shitbox, why didnt they move? Obviously because it was a good deal (as they said- lets not imagine circumstances to support your ridiculous argument) Even the post author admits they got a sweet deal.

            Regardless, you lose this battle. The tenant will get no money and more and more freeloaders like them will continue to be evicted. Long live capitalism. Now continue complaining on here, to make it feel like your voice matters- Your time is coming :)

      • Dale Holmgren

        If letting people squat wherever they felt like it for as long as they want was a good idea, I presume you have no problem with someone busting a window and sitting in your apartment as well. The theory is the same, as you put it.

        • dangerousjay

          Landlords and tenants enter into a legally-binding contract when they sign the lease. In SF, that means certain minimal protections for tenants.

  • lax

    The owner has been really nice. This person renting is a disgusting entitled brat. We need her name to make sure I don’t rent my property to her.

  • lax

    Its not rent controlled. Landlord needs to raise rent to fair market value.. $3900 per month as soon as possible.

  • sfrepublican

    This is his house. He should give you a three months notice and that it.You should have no monetary compensation .It’s his house!

  • Tim Bracken

    Unbelievable. This is a perfect example of how well-intentioned pro-tenant laws are being manipulated to help the wrong people.

    The tenants have a sweetheart deal. Thanks to the kindness of this owner, they have a WAY below-market rent. The owner doesn’t sound wealthy at all. He’s trying to scrape together the money to buy a home for the new family he is trying to start.

    And yet this tenant is not satisfied with the enormous savings she has reaped by renting for years at this deflated price. She’s not satisfied with the fact that she’ll be given ample notice to find another place and pay what all us other city dwellers are forced to pay. She wants to obstruct this owner, who has been nothing but kind to her, gaining any upperhand possible to deny him the ability to sell the house and finance his future. And if that fails, she wants to SOAK him for thousands of dollars in relocation costs. Ridiculous.

  • Garner White

    How about saying THANK YOU, shaking the owners hand like a
    man, and help get the place clean / staged for the next buyer (for free)

    The fact that you think you have some legal battle or rights
    to the property are absurd. This person
    has helped you out for the last 10 years, were they probably could have made 3X
    on the property (call it an additional 100 grand).

    The owner choose to help you out because you are family, obviously
    you are choosing another path.

  • Another Mike

    A cottage that would rent for $3900 a month would sell for about $750,000. So you wouldn’t be getting that much of a bargain, if you needed to do all the home improvement at once.

    If you had $100K for the down plus closing, I would go for it.

    If not, you might have to check out Bakersfield.

    • msbaddassmanib .

      i was in the same situation well my husband is. he has gotten an eviction and the landlord sold the property. i called the landlord so many times asking him why did you do it. he recalls not giving us and eviction, we payed our rent on time we have no problem paying. my husband has a good job working for a company so i no for a fact we dont deserve this. so we moved to another home and supppsly this landlord is saying she hasnt recieved a dime from us which is a bold face lie. we have recipts to city bank. it might not been the full amount but her me and my husband had an agreement that we will pay 300 to 500 every week. now she has went back on her word so now we dont have proof for her agreement and i told her to write it down. she didnt want to! then the owner comes to our home to collect the rent and supposly they both are saying he neverd came. me and my family is in a fucked up situation for no reason. yea my husband lost his job and was behind rent for like 2 3 months but he made the attempt to pay them an which he did. s
      now there trying to get us for 72.0000 first ut was 62.0000 so idk how it went up. there ignoring our phone calls hunged up in our face. nobody deserves none of this specially if your making tge effort to do what ever it takes not to be removed or evicted. we have babies and one on the way its been so hard nobody will rent to us i give up

      • Margaret Schmidt Bergren

        I bought my condo about the time my husband and I started dating. By the timewe mmarried, the market had crashedand there was no way i could sell without taking a huge hit.
        I am stuck with this property, like many other landlords out there. What most renters don’t seem to get it we are not banks. We do not have the cash to float you until you can afford to pay the rent. When my tenants are late with their rent, my mortgage check bounces, and I have to pay the fees that follow.

        You are NOT a good tenant just because you try to pay on time. Paying only part of the rent is the same as not paying the rent. As far as your landlord agreeing to your paying BETWEEN 300-500 a week for rent, I’m guessing you misunderstood the landlord. No rent is based on a sliding scale. It is a set ammount.

        You are a good tenant if you stick to the terms of the lease and actually DO pay rent IN FULL on time. I would evict you, too.

        As far as being pregnant and having children, the bank that requires the owner to pay his or her mortgage each month does not care. You both need to grow up, and either move to a place you can afford, or stop breeding. It’s the hard truth, but the truth nonetheless. It’s not your landlords responsibility to float you.

        • Tina Maria

          To the renters- Don’t punch a gift Horse in the mouth
          To the landlord- No good deed goes unpunished!!

  • Rigs

    I am a lower middle class renter. My opinion on these bananas crazy rental issues in SF put me in the minority. We are responsible for our own housing people, c’mon. I’m sorry it is expensive here in the Bay Area, but if you rent, you must face the realities that come with renting, one of which is- you might have to leave. And it’s ridiculous that you should be paid an outrageous sum of money to do what people have to do all the time in other parts of the country.
    I’m happy there are certain protections for tenants, but all this uproar over rent control and evictions that’s been going on lately is so dumb..sf is a little bubble in so many ways ( some good !) but this bs is nonsense, and laughably unrealistic. Pretty much a bunch of babies stomping their feet.

  • Gabriel Ramos

    Hey DEADBEAT LOSER, how about your entitled to nothing. I love you fucking loser deadbeats who think your entitled to something. Guess what RENTER if you can’t afford to pay fair market value based on what the rate is today, THEN YOU CANT AFFORD IT. Move out of state or further East but stop being deadbeats. I only wish I was a billionaire so i could buy every single family or multi-unit and do nothing more than OMI or Ellis act it and get rid of all you deadbeats. And can I say I hope Dave Crow gets hit by a muni bus you bleeding heart piece of shit!

  • Francesca Hamilton

    Wow, this is unique for California renters, they should be very, very happy as I don’t believe any of these provisions exist in Arizona. This must be a “renters state.” A severance for relocation is very generous from the landlord, but also SF is an expensive city with high demand so it makes sense for their market. For Arizona landlords, they have less to worry about, see this article: http://francescahamilton.com/2013/12/07/can-you-sell-a-property-while-it-is-rented-in-arizona/

  • Docas Laranch

    I was married for 8years with out any child,because of this my husband start acting very strange at home,coming home late and not spending time with me any more.So i became very sad and lost in life because my doctor told me there is no way for me to get pregnant this really make life so hard for me and my family.my sister in law told me about Prophet Osaze from the Internet,how he has helped people with this similar problem that i am going through so i contacted him and explain to him.he cast a spell and it was a miracle three days later my husband can back to apologize for all he has done and told me he is fully ready to support me in any thing i want,few month later i got pregnant and gave birth to twins (girls) we are happy with ourselves. Thanks to Prophet Osaze for saving my relationship and for also saving others too. continue your good work, If you are interested to contact him and testify this blessings like me, the great spell caster email address:spirituallove@hotmail. com