I inherited a house in San Francisco from my aunt.
My aunt had rented her basement to an older couple (probably illegally) for a few years at below market rate. I don’t think there was a lease, and keeping tenants in the basement is probably against the building code. The couple’s family lives nearby.
I really don’t want to renew the lease because I live out of state and because of San Francisco’s strict rental laws.
What should I do if I don’t want to be a landlord? Can I just notify them to terminate the lease? Do I have the right to evict them? (I don’t plan on doing that, but just in case.) Or do I have to sell the property to terminate the lease?
I heard that California has very strong tenant protections and eviction is difficult. The tenants are an older couple, but they are healthy.
I’m afraid that if I accept the rent from them, it will be an acknowledgment of the landlord-tenant relationship. Would selling the property be a way to get them out? Or should I just ask them to leave and start eviction proceedings if they refuse?
I really need some advice. Could you please help?
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Before you move, think about whether you want to continue owning the home or sell it because you said you don’t want to be a landlord.
I would say the first step is to contact the residents and politely ask them if they could move out of the apartment because the owner of the home had changed hands. Explain the situation to them – when you’ve rented below market rate, you want to end the existing relationship, and you also don’t want to manage the rent while you’re abroad.
Also, be clear and firm and tell them you don’t want to rent the unit at all and that you plan to sell (or have other plans).
You need to be clear about your intent. Because if you want to empty the house of tenants before you sell the home, you have a tough road ahead of you.
You can raise the rent to market rate and then see if they can pay, which would be a tough way to get them out. They would either pay or they wouldn’t be able to pay and they would be late on the rent or they would move out.
You can also consider selling with tenants. Real estate investors may be interested in purchasing this property as it is located in San Francisco. Some may be okay with being a landlord and dealing with a mess of tenants not paying market rate.
But if you are determined to get your tenants to leave, the next step would be to contact a lawyer to get an idea of how the eviction process works.
Scott Freedman, an attorney with San Francisco-based law firm Zacks, Freedman & Patterson, told MarketWatch that because there is no lease, the unit is considered “illegal” under San Francisco law.
And “even if the rental unit is ‘illegal’ in San Francisco, it will be treated as a legal unit for purposes of determining whether, how and under what conditions the landlord can ask the tenant to vacate the unit,” he explained.
This means that the landlord needs at least one reason from the list of “Just Cause” reasons to ask the tenant to leave. You also have to pay the moving expenses. And generally, you must also give these people 30 or 60 days’ written notice.
It’s not something simple you can do yourself (unless you’re a lawyer.)
Freedman said there may be one or more “right reasons” for your situation. But he also emphasized that the list does not include asking a tenant to leave “simply because the landlord does not want to rent a particular apartment anymore.”
And assuming these people have been paying rent to your aunt on time at the rate she set, maybe you can’t just ignore the rent they paid and pretend they didn’t because there are events in history that reveal the relationship. .
But those fees also put you at risk, Freedman said. “Collecting rent is also technically illegal [illegal units]and getting proper insurance to rent an illegal unit can be a struggle,” he added.
He recommended contacting San Francisco rental boards to learn about Just Causes and illegal units.
Also contact a lawyer. Freedman agrees with you that tenant protections are strong in SF, “and the consequences of even innocent mistakes can be significant.”
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