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Tenants’ Rights When a Rent-Controlled Building is Bought or Sold

Tenants’ Rights When a Rent-Controlled Building is Bought or Sold

Tenants’ Rights When a Rent-Controlled Building is Bought or Sold

15Jul

Tenants’ Rights When a Rent-Controlled Building is Bought or Sold

One of the most common questions we get from tenants is - what happens when my landlord sells my building? Tenants, understandably, want to know what their rights are if their rent-controlled building is bought or sold. While it varies by situation, here we attempt to tackle some of the most common issues that come up when there is a transfer of ownership. 

1. Do I have to move out if my building is sold?

No. The sale of a building alone is not a "just cause" for eviction. This means that a new owner cannot simply tell you to leave because they bought the property. Your existing lease agreement carries over and becomes the responsibility of the new landlord, regardless of whether your lease is written or oral. The terms of your tenancy with your previous landlord are binding on your new landlord. 

Despite this, we do see situations where sellers and buyers will try to intimidate or pressure tenants into moving out. If you are in a situation where your tenant rights are being violated, speak with us at Wolford Wayne.

2. Does the Owner Have a Right to Enter my Home as part of the sale process?

Yes. Within reason. If the rent-controlled building is being sold, the owner has a right to show the space to prospective buyers. Tenants cannot simply refuse to allow a landlord to show their apartment, at all. In fact, doing so may be grounds for eviction under the Rent Ordinance. However, you can negotiate the times that best suit your schedule. Per California Civil Code 1954, a landlord is permitted to enter your unit for the purpose of showing it to a potential buyer, upon twenty four hours written notice. 

 

3. Will I get evicted if my rent-controlled building Has been sold?

Not necessarily, but there are a few ways a landlord can legally force you to vacate following a sale. As we mentioned previously, your new landlord is not allowed to evict you unless there is just cause because he or she is bound by the same rules as your previous landlord. However, when there has been a transfer of ownership we do see a higher instance of two types of "no fault" evictions which may provide a landlord with legal grounds to evict.These are:

  • Owner (or Relative) Move-in Evictions: An owner has the ability - and right - to evict a tenant from a unit in order to move in. However, there are a number of rules governing OMI evictions. If you receive an owner move in eviction notice, we recommend speaking with a tenant's rights attorney to help evaluate your options.  If you have resided in your unit for over a year, you are entitled to relocation payments. If your landlord recovers possession and never moves in, you may have grounds for a wrongful eviction lawsuit.
  • Ellis Act Evictions: The Ellis Act is a way for landlords to evict tenants in order to remove all units in the building from the market and "go out of the rental business." As with an OMI, landlords are obligated to follow strict laws in order to follow through with an Ellis eviction. Eligible tenants are entitled to relocation payments and up to a year to vacate. If you receive an Ellis eviction notice, it is important that you immediately contact a tenants' rights group such as the Eviction Defense Collaborative or Tenderloin Housing Clinic as soon as possible to evaluate your options.

4. Can the new landlord raise my rent?

Not really. If you live in a rent controlled building, your home will continue to be covered by rent control. If a new landlord takes over a building where the prior owner did not impose the annual allowable increases, they could impose a small increase to make up for that. However, these increases have to be allowable according to the years in question. For example, if your previous landlord did not take any increases in 2019, 2020, and 2021 your new landlord can charge you rent increases for those three years and your current year.  

Additionally, there are some limited situations where a landlord may petition the Rent Board to raise the rent based on an increase in costs to manage the property (operations and maintenance petitions) or if a tenant's rent was artificially low due to a unique relationship with the prior owner (special circumstance petition). 

5. Should I fill out the Estoppel Form / Tenant Questionnaire they gave me?

Maybe. Sellers will often give tenants a form, known as an estoppel agreement or tenant questionnaire, to fill out. Sometimes they will tell you that you "have to" fill it out. These forms look harmless enough. They ask tenants to spell out any terms of their lease that may not be included in the written lease agreement itself, so that a potential owner knows what they are getting into. In theory this is great- it means less of a chance of a new owner stepping on your toes. However, if you leave something important out, you risk forfeiting that right altogether. These forms leave only a single line where tenants can list ongoing disputes, repair needs, and rights that they may enjoy that are not in the lease. If you miss this, the new owner may claim you have lost that right altogether because you did not bring it up. For example, if your landlord said you could have a pet even though the lease says otherwise and you don't mention it in the form, they may argue you have no right to keep your pet!

To be safe, we recommend you write a letter rather than filling out the form. Include the pertinent information you want your landlord to have, but make clear that the 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.

6. Anything else to be aware of?

Yes. Buyouts buyouts buyouts. We see a lot of situations where an owner who is looking to sell their building will approach a tenant about a potential buyout of their tenancy. We also see this from new owners. Whether to enter into buyout negotiations - an exchange of money for moving out - is a very personal choice. On one hand it can present an opportunity to recover a substantial sum of money and take away the fear and risk involved in not knowing if the new owner will try and evict you or not. On the other hand, money only goes so far, especially for those tenants who expect to move into another rental unit in the Bay Area. If you have been approached about a buyout, it is important to avoid talking numbers or sitting down with your landlord until you have had a time to discuss your rights and a strategy with a qualified tenant's rights attorney.

Get In Touch With A Tenant's Rights Attorney Today To Discuss Your Rights If Your Building Is Being Bought Or Sold

It's natural to have concerns when your rent-controlled building is being bought or sold. If you are a long-term tenant living in a rent controlled building and your building is in the process of being sold, contact us today to talk through your rights and to determine a strategy.

At Wolford Wayne, we have experience helping tenants in Berkeley, Oakland, and San Francisco when their rent-controlled building is being bought or sold. We know when your rights are being violated and can help you do something about it. So contact us today for a no-obligation consultation.

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For more information or to discuss your legal situation, call us today at (415) 649-6203 for a phone consultation or submit an inquiry below. Please note our firm can only assist tenants residing in San Francisco, Oakland & Berkeley.

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