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tenant issue

S

sn0rky

New member
Joined
May 17, 2005
Location
San Francisco
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Honda F3
hi, my parents have a bit of a tenant problem.
they currently have a 2unit house that is being rented out; 1st floor for $650 and the 2nd floor for $1300 (2 bedroom)

now here is the kicker; the 1st floor is a spacious 3 bedrooms. Originally my parents wanted to help some friends out and rented the place out at $500 about 10 years ago by allowing them to stay with relatively low rent. along those lines they had financial difficulties and my parents decided not to raise rent much in the years of their occupancy. Now my parents are getting ready to retire and would love to have the extra income in preparing to retire.

What steps must be taking to raise the rent to market value ~$1900 and how difficult would the process be? They are aware that a attorney may need to be involved; any recommendations?
 
If they are in San Francisco, they are pretty much fucked. All they can do is raise the rent by the maximum allowable amount, which I think is 3%. I don't know whether that can be applied retroactively.

Your best bet is for the tenants to agree to the increase, in writing, though good luck. If they are friends, they might go for it, but friendships tend to go away fast when you're trying to increase the rent by $1900.

Lesson learned. Never be nice to anybody.
 
If your parents' rental units are in SF, have you or they checked with the SF Rent Board?

Looking at the SFRB's webpage, the following two items show something: this and this (Fax #40).

At any rate read the rent laws in SF and then contact the SF Rent Board for further clarification. There's probably a SF Landlord advocate that you or they can contact as well.
 
If I recall correctly, rent control in San Francisco only applies to buildings built before a certain year. Don't ask me why, but that is what I recall.

So, if that is still true, and the building is young enough, your parents can raise the rent to whatever they wish at any time - barring any long term contracts.
 
LeH said:
You "move in," and thank the Ellis Act.
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thats what i was telling them, ill just move in and get room mates or something and theyd still be making more.
thats for the help ill help them research a little more into it.
 
My understanding is that rent can be raised the allowable limit for previous years. So say they have not raised the rent for 5 years. They can raise it by each of those years %s in order. Of course you should run it by the communists at the SF rental board.
 
Lease? No lease? Either way its going to be hard to raise the rent to market rent (max is ~3%/year) and or get them out. As someone else said, your parents are pretty much going to have to move you in to get them out at a semi-reasonable price.
 
Just don't renew the current tenants' lease. Whenever it expires, tell them to find a new place to live. I believe you can raise the rent as much as you want as long as it's not the same tenant.
 
notfromcali said:
Just don't renew the current tenants' lease. Whenever it expires, tell them to find a new place to live. I believe you can raise the rent as much as you want as long as it's not the same tenant.
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Things work a little differently here in San Francisco and the Bay Area!
 
In SF, if the property is less than 4 units and/or newer than 1979, it is not subject to rent control. However, should you attempt to evict from a non rent controlled unit or property, expect the same eviction laws under rent control to apply. If the property is in SF, you can go back and add up the past rent increases all at once. This is called 'banking' the increase. You can go to this link to find the maximum allowable increase http://www.sfgov.org/site/rentboard_page.asp?id=54839. Let me warn you though, some of those maximum percentages are really low.

If the property is not in SF, be sure to check if there is RC. If it doesn't, then you can raise the rent to whatever you like. If you are going to raise it 10%, all you need is 30 days notice. If more than 10%, then you will need to give them a 60 day notice. In a non RC city, California rental laws still apply. For more on rental laws in non RC cities, check here http://www.dca.ca.gov/publications/landlordbook/index.shtml.

I'm not an attorney, so be sure to check with a real estate attorney.

Good luck and I hope your parents' rental is NOT in SF.
 
You need to find out whether you moving in would qualify as an owner move-in. You're not the owner, your parents are, but you might qualify, being their child. You need to tell us more info, such as when they moved in:

What buildings are rent-controlled?

In general, all dwellings built before 1979 are subject to rent and eviction controls. Single-family homes (without "in-law" units) and condominiums where all tenants moved in on or after January 1, 1996 are exempt from rent increase limits, but are still subject to eviction controls. This exemption does not apply to condominium conversions unless the condominium has already been sold by the owner who converted it, or the condominium is the only one in the building that has not been sold and the owner has occupied it for at least one year after conversion.

More info here: http://www.andysirkin.com/HTMLArticle.cfm?Article=3&Hit=1

Sirkin is like a property law guru in SF. Hopefully the link above answers all your questions.
 
pSykopSoMaTiK said:
In SF, if the property is less than 4 units and/or newer than 1979, it is not subject to rent control. However, should you attempt to evict from a non rent controlled unit or property, expect the same eviction laws under rent control to apply. If the property is in SF, you can go back and add up the past rent increases all at once. This is called 'banking' the increase. You can go to this link to find the maximum allowable increase http://www.sfgov.org/site/rentboard_page.asp?id=54839. Let me warn you though, some of those maximum percentages are really low.

I'm not an attorney, so be sure to check with a real estate attorney.

Good luck and I hope your parents' rental is NOT in SF.
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ya, i did a google search and came up with the same. "Annual increases can be "banked" by the landlord and imposed in later years." Did a total rent calculation from there as i believe the increase is not compounded. Therefore only an increase of about ~$110.
thanks for the help i guess that will have to do for now untill i speak with the rent board or a landlord attorney
 
sn0rky said:
ya, i did a google search and came up with the same. "Annual increases can be "banked" by the landlord and imposed in later years." Did a total rent calculation from there as i believe the increase is not compounded. Therefore only an increase of about ~$110.
thanks for the help i guess that will have to do for now untill i speak with the rent board or a landlord attorney
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Another angle your parents might want to consider is that they rented to place at below market already 10 years ago. Perhaps increasing the rent to the market rate 10 years ago, ~1100, and then adding the banked increase calculated based on the ~1100? That sounds fair and wouldn't be too over the top but definitely require a hearing from the rent control board. It would bring the rent anywhere to the 1900 they want but definitely closer to it than 500. Something for your parents to consider is this http://www.sfgov.org/site/rentboard_page.asp?id=5964 in section 6.11, items 1 and 2.

Best of luck to you and your parents. You said they are friends of your parents? Expect a fight and maybe no more friends after this. I've seen this with my parents' rental. :(
 
pSykopSoMaTiK said:
Another angle your parents might want to consider is that they rented to place at below market already 10 years ago. Perhaps increasing the rent to the market rate 10 years ago, ~1100, and then adding the banked increase calculated based on the ~1100? That sounds fair and wouldn't be too over the top but definitely require a hearing from the rent control board. It would bring the rent anywhere to the 1900 they want but definitely closer to it than 500. Something for your parents to consider is this http://www.sfgov.org/site/rentboard_page.asp?id=5964 in section 6.11, items 1 and 2.

Best of luck to you and your parents. You said they are friends of your parents? Expect a fight and maybe no more friends after this. I've seen this with my parents' rental. :(
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see thats teh whole thing i dont like about the situation. if somebody helps you dont take advantage of it; i think they long exceeded their stay and help they needed. my parents just told me theyve been there for 14years.
 
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sn0rky said:
see thats teh whole thing i dont like about the situation. if somebody helps you dont take advantage of it; i think they long exceeded their stay and help they needed. my parents just told me theyve been there for 14years.
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I agree. I wouldn't be surprised if they had a rental or two and is maximizing on your parents' generosity. I understand that there are many tenants that are good, clean, and are worthy of rent control protection. On the flip side, all it takes is that small minority to really screw over a small time property owner.

The neighbors across the street from one of my parents' rental rents the whole house and sublets to his relatives. He owns a property (one that I know of, possibly more) and rents those out. Meanwhile, his relatives cover his rent for the one he lives in but doesn't own. Rent free!!!

One of my parents' tenants has a new Acura every few years but my Dad has a '92 Toyota Corolla. The 'rich' landlord drives a bucket....okay, it's in good condition but worth what $1500? :laughing:laughing
 
notfromcali said:
Just don't renew the current tenants' lease. Whenever it expires, tell them to find a new place to live. I believe you can raise the rent as much as you want as long as it's not the same tenant.
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No, I don't think they can do that, they still can only raise the rent by the max 3% for the new tenants, the only logical solution in this case is for them to move in themselves or have a child move in for "free", and then the child can move out a months later. I probably wouldn't even talk to the tenants about the possibility of raising the rent, they know htey are getting a hell of a deal, and money divides friendship pretty quick.
 
sn0rky said:
thats what i was telling them, ill just move in and get room mates or something and theyd still be making more.
thats for the help ill help them research a little more into it.
Click to expand...

Be careful with move in evictions or any type of eviction in SF for that matter. The rent ordinace provides for atty fees and treble damages if you mess up. Best seek out a good local landlord/tenant attorney. Any way you look at it, it is going to cost thousands to get a tenant out.
 
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