In San Francisco, the majority of property occupants are covered by the San Francisco Rent Ordinance which provides lease control and simply trigger for eviction. This indicates leas can just be raised by certain amounts each year and the tenant can only be forced out for "simply causes." In addition, some rental systems have restrictions on just how much the property manager can charge the new tenant due to previous expulsions. The Rent Ordinance is administered by the San Francisco Rent Board.

Effective January 1, 2020, there is state rent control and simply cause required for eviction for many property units not covered under the Rent Ordinance. If the system does not fall under an exemption, then it is covered. For the systems covered only under California lease control, annual lease increases are topped at 5 percent plus the cost of living increase or 10 percent, whichever is lower, for tenants who have actually occupied the unit for 12 months or more.

The Rent Board website has comprehensive details about the Rent Ordinance and you can download the San Francisco Rent Ordinance and Rent Board Rules and Regulations or pertain to our therapy center for additional information about the Rent Ordinance or state law. Tenants who do not have rent control can have their lease increased by any amount at any time with a proper written notification.

Major Components of the Rent Control Under the Rent Ordinance

- Landlords can only raise a tenant's rent by a set amount each year (connected to inflation). Landlords can also petition for other increases. Notably, capital enhancements can be travelled through to the occupant for an optimal increase of 10% or increased operating and upkeep expenses for an optimal boost of 7%, however these rent increases need to be documented and authorized by the Rent Board before they can be enforced. The tenant can ask for a difficulty exemption for the capital improvement and operating and maintenance passthroughs.
- Tenants can petition the Rent Board to reduce their lease if the landlord has failed to provide concurred upon or lawfully required services-e.g., the proprietor takes away storage area, parking, washer/dryer, and so on or the property manager stops working to preserve the properties as safe and habitable (e.g. the home has uncorrected housing code infractions).
- Tenants can just be kicked out for among 16 "simply causes" unless the occupant shares the rental unit with their proprietor. The majority of these expulsions deal with claims the occupant can contest (e.g., renter is violating the lease) but some are "no-fault" like owner move in or an Ellis Act eviction.

Rent Control Coverage Under the Rent Ordinance

If you reside in San Francisco, you are usually covered by lease control. The major exceptions are:

- You reside in a rental with a certificate of occupancy after June 13, 1979, with a few exceptions. This "new building exemption" is the greatest exemption in San Francisco. The Assessor's database, is where you can usually discover the date your structure was constructed which will offer the approximate date for the certificate of tenancy. Illegal units do not have a certificate of tenancy, so are covered under the Rent Ordinance unless exempt for other reasons. Some "accessory systems" typically called in-law systems are still covered under rent control in spite of having a certificate of occupancy released after June 13, 1979. (SF Administrative Code Section 37.2( r)( 4 )( D)) Unauthorized units that existed before June 13, 1979 and were brought up to code after that date are likewise still covered under rent control. However, efficient January 19, 2020, these more recent units are no longer exempt from the remainder of the Rent Ordinance due to their certificate of tenancy date.
- You reside in subsidized housing, such as HUD housing tasks. Tenants with tenant-based assistance such as Section 8 vouchers are still covered by the eviction protection of the Rent Ordinance, and sometimes covered by the lease control of the Rent Ordinance. Make a visit with the Housing Rights Committee of San Francisco for support for subsidized housing.
- You reside in a property hotel and have less than 32 days of continuous occupancy.
- You reside in a dormitory, medical facility, abbey, nunnery, and so on- You reside in a single family home (see below).

Single Family Homes Including Condos Have Limited Rent Control Coverage

You usually do not have complete lease control security if you live in a single household home (a single family home with a prohibited in-law system counts as a 2-unit building) or a condominium and you (and your roomies) moved in on or after January 1, 1996. While these units do not generally have limitations on rent increases, they do have "simply cause" expulsion protection (unless otherwise exempt for factors such as above), implying you can just be forced out for among the just causes unless the renter shares the rental system with their landlord.

Exception: If you moved into a single household home which was vacant due to the fact that the previous renter was evicted after a 60 or 1 month eviction notification (a no-fault eviction), then you have full rent control defense. (You can learn if there was a previous expulsion by going to the Rent Board website or searching for the proprietor's name on the California Superior Court's website.)

Exception: If you moved into a single household home or apartment which had housing code offenses that were cited and uncorrected for at least 6 months before the job, then you have complete rent control. You can discover the code violation status of your structure at the Department of Building Inspection's site.

Exception: If you live in a condominium where the subdivider of the structure still owns the condominiums, you have complete rent control defense, unless it is the last unsold unit and the subdivider resided in the unit for a minimum of a year after neighborhood.

Commercial Units Used as Residential with the Landlord's Knowledge Are Not Exempt from Rent Control

Commercial areas or live/work units in which renters continue to reside in a nonresidential unit with the understanding of the property owner are covered by lease control unless exempt for other factors. Whether the property owner in fact understands that individuals live there and permits the occupants to live there is what counts.

Rent Increases Under the Rent Ordinance

Tenants with rent control can just be offered rent increases based upon what the law enables. Each year, a property manager can offer renters an annual lease boost, which is based on the Bay Area Consumer Price Index (i.e. inflation). Landlords can also pass on some costs to renters automatically (without having to petition the Rent Board), including 50% of recently adopted bond procedures, increases in PG & E costs (when paid by the proprietor), and a portion of the annual "Rent Board Fee" which funds the Rent Board. In addition, property managers can petition for "capital improvement" lease boosts and "operating and upkeep" lease increases. If tenants think they have received an illegal rent boost (now or in the past) you need to be available in to the SFTU drop-in clinic for advice on submitting an Illegal Rent Increase petition at the Rent Board to get your lease overpayments reimbursed and your rent set properly.

Annual Rent Increases

The yearly lease boost (document 571) can be troubled or after the occupant's "anniversary date." The lease boost can not be provided faster than 12 months from the last boost, the "anniversary date." It can be offered after, in which case that date ends up being the new anniversary date. Annual increases can be "banked" by the property owner and enforced in later years.

90 Day Notice Required For Rent Increases More Than 10%

State law (California Civil Code Section 827) requires a 90 day written notification for any rent increases which, alone or cumulatively, raise an occupant's rent by more than 10% within a 12 month duration. Rent increases for 10% or less need a 30 day notification. This covers both rent controlled and non-rent regulated systems.

Capital Improvement Rent Increases

Among the more unjust parts of lease control is the capital enhancement passthrough. Capital improvements are improvements for the building, the landlord's investment, which occupants primarily pay for through a passthrough. Not just can the proprietor get the renters to pay for increasing the value of his/her investment, the landlord can then compose the cost of the enhancements off in their taxes. Capital improvements are things fresh windows, a new roofing, painting of the outside of the structure, and other similar enhancements to the residential or commercial property which include considerably to the life or worth of the residential or commercial property instead of regular upkeep. Landlords need to finish the work, petition the Rent Board and win approval of the rent boost before the cost can be passed on. Tenants can contest the increases at the hearing on specific grounds, like that the work was never ever done, was not needed, or was done to gentrify the structure, however it is tough to stop such a passthrough in its entirety. However, the renter may get approved for a hardship exemption.

Once the capital enhancement has actually been paid for, then the occupant's rent reverts to what it was prior to the passthrough (plus any permitted increases in the interim); capital improvement lease increases are not part of your "base rent," suggesting the yearly boost portion computation does not include the capital improvement passthrough.

Capital Improvement passthrough rent increases vary based on the size of the building:

Tenants in Buildings with 5 or Fewer Units
Tenants in these smaller sized buildings will need to pay off 100% of the cost of the capital improvement with rent increases of 5% each year up until the entire quantity is paid off. For instance, if the brand-new roof costs $5,000 in a 2 unit structure, each renter needs to pay $2,500 and will have their rent increased 5% annually till their share ($ 2,500) has been paid.

Tenants in Buildings with 6 or More Units
Tenants in these bigger structures (where most large capital enhancements lease boosts happen) have a choice of either spending for half of the capital enhancement (i.e. property owner pays 50%, occupant pays 50%) and after that getting annual rent boosts of 10% up until the capital improvement is settled or the renter can choose to pay for 100% of the capital improvement and get yearly lease boosts of 5% each year, approximately optimum of 15% (or the equivalent of 3 years of lease boosts). The option in these larger buildings can be made individually by each renter and which one is best will depend on elements such as the cost of the capital improvement, what the occupant's base rent is, and for how long the tenant intends on living there.

Operating & Maintenance Rent Increases

Operating and upkeep rent boosts are for increases in the property owner's cost of running the residential or commercial property. For the property manager to be able to pass on one of these operating and upkeep lease boosts, the increased property owner expenditures should surpass the annual rent boosts. In other words, if the proprietor's costs increased 2% and the yearly boost that year is 2.2%, then the landlord would not be eligible for this rent increase. In determining whether a proprietor can get an operating and maintenance rent boost, the costs are aggregated, or took a look at in total. To put it simply, an increase in one location (e.g. taxes) may be balanced out by a reduction in another location (e.g. repair work). If when all is computed the proprietor can get the operating and maintenance rent boost, the rent boost is just the amount over the yearly boost. So if the yearly increase is 2.2% and the proprietor's costs increase 3.2%, the property owner might get a 1% operating and maintenance rent increase. The occupant's lease will not increase by more than an additional 7% beyond the annual allowable boost and the boost enters into the base rent. The occupant might get approved for a challenge exemption.

Effective July 15, 2018, amendments to the Rent Ordinance promoted by the Tenants Union restrict property owners from looking for rent increases on existing tenants due to increases in financial obligation service and residential or commercial property tax that have actually arised from a change in ownership, and prohibit property owners from looking for rent boosts due to increased management expenses unless the expenditures are sensible and essential.

PG&E Passthroughs

Tenants who do not pay for PG & E can have their rent increased when PG & E expenses increase. PG & E passthroughs should be part of the Operating and Maintenance Passthrough procedure but rather became a separate automatic passthrough when lease control was passed in 1979. These, too, are extremely unreasonable as occupants currently spend for energy increases as part of the annual rent increase, which is based upon the Consumer Price Index (CPI). Generally, if the property manager is computing the increase based on the previous 2 fiscal year, the proprietor needs to submit a petition with the Rent Board before passing on the boost to tenants. If, nevertheless, the landlord utilizes an earlier "base year" (as the majority of proprietors do), they do not have to file a petition with the Rent Board but should submit their computation worksheet with the Board (and connect a copy to the renter's rent boost notice). The "base year" for calculating the boost is 2002 for any tenancies existing as of 12/31/2003 and the year preceding the move-in date for tenancies which started after December 31, 2003. Tenants can file a petition challenging the boost and get a hearing if they disagree with the landlord's estimations or request a challenge exemption.

Hardship Exemption

The Tenant Financial Hardship Application (readily available from the Rent Board in several languages) can be submitted at any time after receipt of the notification of rent boost or the choice from the Rent Board is provided, whichever is previously, for petitions for capital enhancement passthroughs, basic bond passthroughs (reliable 12/6/19), water earnings bond passthroughs, energy passthroughs, and operating and upkeep cost boosts. The occupant need not pay the approved rent boost while the appeal is being processed and considered.
Each tenant in the system who is at least 18 years old, except for subtenants, should send documents under penalty of perjury that the approved lease increase will constitute a financial challenge for among the following reasons:

1. Tenant is a recipient of means-tested public assistance. Or
2. (a) Gross household earnings (this would include all roommates) is less than 80% of the existing Unadjusted Area Median Income as published by the U.S. Department of Housing and Urban Development for the "Metro Fair Market Rent Area" that consists of San Francisco (income limitations on the Rent Board type). And
( b) Rent is higher than 33% of gross home earnings. And
( c) Assets, leaving out retirement accounts and non-liquid properties (such as automobiles, furnishings, and so on), do not go beyond possession amounts allowed by the Mayor's Office of Housing when determining eligibility for below market rate home ownership (asset limitations on Rent Board kind). Or
3. Exceptional circumstances exist, such as extreme medical expenses.

Rent Board Fee

The Rent Board is moneyed by a yearly charge assessed on rental units covered by rent control. Landlords can hand down to tenants 50% of the charge. Similar to the yearly rent boost, the Rent Board Fee (file 573) can be banked. Landlords can subtract the Rent Board charge from security deposit interest or bill renters directly. Tenants can not be evicted for nonpayment of the Rent Board fee.