When a landlord sells a tenant occupied building it can have real consequences for the people that live there. But what are those consequences and what rights do tenants have when their landlord is selling the building? This month, we address four common questions that arise when tenants learn their landlord is selling or has recently sold their building.
In order to provide a thorough overview, we’ll be devoting two articles to this topic. In Part 1, we look at open houses, estoppel agreements, changes to the lease agreement. Part 2 will cover owner move-in and Ellis Act evictions, condo conversions, and buyouts.
1. DO I HAVE TO MOVE?
Not if your building is covered by the Rent Ordinance. While we do see a spike in no-fault evictions when a building is sold, your landlord can’t evict you just because they want to sell or just bought your building. As we’ve discussed before, there are there are 16 “just causes” for eviction for units protected under the San Francisco Rent Ordinance. Sale of a building is not one of the 16 just causes for eviction. If your home isn’t covered by the Rent Ordinance, your landlord must provide you with a written eviction notice.
2. DO I NEED TO ALLOW STRANGERS INTO MY HOME?
Yes. Civil Code §1954 allows landlords to enter your apartment to show it to “prospective or actual purchasers.” This includes hosting open houses and offering tours. Many tenants understandably balk at the notion of allowing potential buyers and brokers to enter their home. However, denying access to the unit altogether is a bad idea and could open you up to eviction. You can negotiate the timing of the viewings, and insist on being present. At a minimum you are entitled to 24 hours written notice prior to entry.
3. DO I HAVE TO FILL OUT THE TENANT QUESTIONNAIRE THE REAL ESTATE AGENT GAVE ME?
Not necessarily. As part of a potential sale, landlords or Realtors often ask existing tenants to fill out a form known as an estoppel agreement or tenant questionnaire. On their face, these questionnaires are harmless enough as they seek information about your tenancy and those amenities, services and rights each tenant may enjoy. However, if you leave something important out, you risk forfeiting that right altogether. For example – have a dog pursuant to an oral agreement with your former landlord and fail to mention it? Your new landlord can argue you are breaching your lease for having a dog. Have an understanding with your former landlord about storing items in the garage and leave that out? The new owner could insist you remove your items.
So, how do you deal with this situation? Unless your lease explicitly requires you to fill out the form, you do not have to do it. If you want to be sure your new landlord doesn’t unwittingly encroach on your rights, though, one solution is to write a letter to your current landlord or their Realtor in lieu of filling out the form. In your letter, include the pertinent information you want your landlord to have, but with the caveat that your list is not exhaustive, and instead just those things you can recall off hand. Even if your lease does state you have to fill out the form, consider writing a letter instead. This gives you wiggle room if you later realize you left something important out.
NOTE: “DISABILITY” IS BROADLY INTERPRETED
Estoppel agreements are often accompanied by a document requesting information about “protected status.” If you are a member of a protected class under the SF Rent Ordinance—that is, if you’re senior, disabled, or live with a minor child—make sure to inform your building’s new owners of this fact. This too should not be taken lightly. Checking the “no” box for disability could cost you thousands of dollars in relocation benefits down the line in the event of an Owner Move In or Ellis Act eviction. The law defines disability broadly to include any health issue that affects “one or more major life activities.” This means that if you take medication for a chronic condition (think anxiety, depression) or have an ongoing medical issue, you may qualify as disabled.
4. DO I HAVE TO SIGN A NEW LEASE?
Probably not. Just because there is a new owner does not mean you have to sign a new lease. Your new landlord may try to persuade you to sign a new rental agreement. However, if the new lease is “materially different” from your current lease, you do not need to sign it. Some examples of a material change include: no pets, changing who is responsible for payment of utilities (tenant v. landlord) , and restrictions on new roommates. So, if your landlord gives you a forty-five page agreement to replace your previous one-page written lease, you are within your right to decline it.
On the other hand, if your landlord presents you with a new lease that is “substantially similar,” you may have to sign it. If you’re unsure whether a new lease agreement represents a material change in the terms of tenancy, consider bringing it to the San Francisco Tenant’s Union or Housing Rights Committee to discuss your situation with a counselor before taking action.
Obviously learning that your home is for sale can be stressful, but the sale alone does not mean you’re going to have to move. You have rights that your landlord has to respect. The best thing you can do is to stay alert, ask questions, and when in doubt, seek assistance. In part two, we’ll discuss the interplay between a sale and tenancy buyouts, Owner Move in Evictions and Ellis Act evictions.