In San Francisco, the majority of domestic renters are covered by the San Francisco Rent Ordinance which offers lease control and simply cause for expulsion. This suggests leas can only be raised by specific quantities annually and the renter can only be evicted for "just causes." In addition, some rental systems have limitations on how much the proprietor can charge the new occupant 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 needed for expulsion for numerous domestic 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 rent control, yearly rent boosts are topped at 5 percent plus the cost of living boost or 10 percent, whichever is lower, for tenants who have occupied the system for 12 months or more.

The Rent Board site has extensive info about the Rent Ordinance and you can download the San Francisco Rent Ordinance and Rent Board Rules and Regulations or concern our therapy clinic to find out more about the Rent Ordinance or state law. Tenants who do not have rent control can have their rent increased by any quantity at any time with a correct written notice.

Major Components of the Rent Control Under the Rent Ordinance

- Landlords can just raise a renter's rent by a set amount each year (tied to inflation). Landlords can likewise petition for other increases. Notably, capital enhancements can be passed through to the tenant for a maximum increase of 10% or increased operating and maintenance costs for an optimal boost of 7%, but these lease increases need to be recorded and approved by the Rent Board before they can be imposed. The tenant can request a hardship exemption for the capital enhancement and operating and maintenance passthroughs.
- Tenants can petition the Rent Board to reduce their rent if the proprietor has actually failed to offer agreed upon or lawfully needed services-e.g., the proprietor takes away storage area, parking, washer/dryer, and so on or the property manager stops working to keep the premises as safe and habitable (e.g. the apartment has uncorrected housing code violations).
- Tenants can just be evicted for among 16 "just causes" unless the tenant shares the rental with their proprietor. The majority of these evictions deal with allegations the renter can contest (e.g., tenant is breaking the lease) however some are "no-fault" like owner relocation in or an Ellis Act eviction.

Rent Control Coverage Under the Rent Ordinance

If you live in San Francisco, you are usually covered by rent control. The significant exceptions are:

- You live in a rental with a certificate of occupancy after June 13, 1979, with a couple of exceptions. This "new building and construction exemption" is the most significant exemption in San Francisco. The Assessor's database, is where you can usually learn the date your building was constructed which will give the approximate date for the certificate of occupancy. Illegal units do not have a certificate of tenancy, so are covered under the Rent Ordinance unless exempt for other factors. Some "accessory units" frequently called in-law systems are still covered under rent control regardless of having a certificate of tenancy 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 also still covered under rent control. However, reliable January 19, 2020, these more recent units are no longer exempt from the rest of the Rent Ordinance due to their certificate of occupancy date.
- You live in subsidized housing, such as HUD housing jobs. Tenants with tenant-based help such as Section 8 vouchers are still covered by the expulsion security of the Rent Ordinance, and often covered by the rent control of the Rent Ordinance. Make a visit with the Housing Rights Committee of San Francisco for assistance for subsidized housing.
- You reside in a property hotel and have less than 32 days of constant occupancy.
- You reside in a dormitory, healthcare facility, abbey, nunnery, and so on- You live in a single family home (see below).

Single Family Homes Including Condos Have Limited Rent Control Coverage

You typically do not have complete rent control protection if you live in a single family home (a single family home with an unlawful in-law system counts as a 2-unit structure) or a condo and you (and your roommates) moved in on or after January 1, 1996. While these units do not usually have limits on lease boosts, they do have "simply trigger" eviction protection (unless otherwise exempt for reasons such as above), meaning you can only be forced out for one of the just triggers unless the occupant shares the rental unit with their property manager.

Exception: If you moved into a single family home which was uninhabited because the previous tenant was forced out after a 60 or one month expulsion notice (a no-fault expulsion), then you have complete lease control defense. (You can learn if there was a previous expulsion by going to the Rent Board site or looking for the landlord's name on the California Superior Court's site.)

Exception: If you moved into a single household home or condo which had housing code offenses that were pointed out and uncorrected for a minimum of 6 months before the vacancy, then you have full rent control. You can learn the code violation status of your building at the Department of Building Inspection's website.

Exception: If you reside in a condo where the subdivider of the building still owns the apartments, you have complete lease 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 systems in which renters continue to live in a nonresidential unit with the knowledge of the property manager are covered by rent control unless exempt for other factors. Whether the property owner in fact understands that individuals live there and permits the renters to live there is what counts.

Rent Increases Under the Rent Ordinance

Tenants with lease control can just be provided lease increases based on what the law permits. Each year, a landlord can provide occupants a yearly rent increase, which is based on the Bay Area Consumer Price Index (i.e. inflation). Landlords can likewise pass on some costs to tenants immediately (without needing to petition the Rent Board), including 50% of just recently embraced bond procedures, increases in PG & E expenses (when paid by the property owner), and a portion of the annual "Rent Board Fee" which funds the Rent Board. In addition, property managers can petition for "capital enhancement" rent boosts and "operating and upkeep" lease boosts. If occupants believe they have actually gotten a prohibited rent boost (now or in the past) you must be available in to the SFTU drop-in center for advice on submitting an Unlawful Rent Increase petition at the Rent Board to get your lease overpayments reimbursed and your lease set properly.

Annual Rent Increases

The annual lease increase (file 571) can be troubled or after the renter's "anniversary date." The lease increase can not be given faster than 12 months from the last increase, the "anniversary date." It can be given after, in which case that date ends up being the new anniversary date. Annual boosts can be "banked" by the landlord 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 notice for any rent increases which, alone or cumulatively, raise a tenant's rent by more than 10% within a 12 month duration. Rent increases for 10% or less require a 30 day notice. This covers both rent regulated and non-rent regulated systems.

Capital Improvement Rent Increases

One of the more unjust parts of lease control is the capital improvement passthrough. Capital enhancements are enhancements for the structure, the property owner's financial investment, which tenants mostly pay for through a passthrough. Not just can the landlord get the tenants to pay for increasing the worth of his/her investment, the landlord can then write the expense of the enhancements off in their taxes. Capital enhancements are things fresh windows, a brand-new roofing system, painting of the outside of the building, and other comparable enhancements to the residential or commercial property which add considerably to the life or value of the residential or commercial property as opposed to regular upkeep. Landlords need to finish the work, petition the Rent Board and win approval of the lease increase before the cost can be handed down. Tenants can object to the increases at the hearing on particular grounds, like that the work was never done, was not required, or was done to gentrify the building, however it is tough to stop such a passthrough in its totality. However, the tenant might qualify for a hardship exemption.

Once the capital improvement has actually been paid for, then the tenant's lease goes back to what it was prior to the passthrough (plus any permitted boosts in the interim); capital enhancement lease boosts are not part of your "base rent," implying the yearly increase 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 have to pay off 100% of the cost of the capital enhancement with rent increases of 5% per year until the entire amount is paid off. For example, if the new roofing expenses $5,000 in a 2 unit building, each tenant has to pay $2,500 and will have their lease increased 5% annually till their share ($ 2,500) has been paid.

Tenants in Buildings with 6 or More Units
Tenants in these bigger buildings (where most big capital improvements lease increases happen) have a choice of either paying for half of the capital enhancement (i.e. property manager pays 50%, renter pays 50%) and then getting yearly rent increases of 10% till the capital enhancement is paid off or the occupant can select to spend for 100% of the capital enhancement and get yearly rent 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 separately by each tenant and which one is finest will depend on elements such as the cost of the capital improvement, what the occupant's base rent is, and the length of time the occupant intends on living there.

Operating & Maintenance Rent Increases

Operating and upkeep rent boosts are for increases in the property owner's cost of operating the residential or commercial property. For the property manager to be able to hand down one of these operating and upkeep lease boosts, the increased landlord costs should go beyond the annual rent increases. Simply put, if the property manager's expenses increased 2% and the annual increase that year is 2.2%, then the landlord would not be qualified for this rent boost. In identifying whether a proprietor can get an operating and upkeep lease boost, the expenditures are aggregated, or looked at in total. In other words, an increase in one location (e.g. taxes) may be balanced out by a decrease in another location (e.g. repair work). If when all is determined the property owner can get the operating and upkeep rent increase, the rent increase is only the quantity over the annual increase. So if the annual increase is 2.2% and the property manager's expenditures go up 3.2%, the property owner could get a 1% operating and upkeep lease boost. The tenant's lease will not increase by more than an extra 7% beyond the annual permitted boost and the boost enters into the base lease. The occupant might certify for a hardship exemption.

Effective July 15, 2018, changes to the Rent Ordinance promoted by the Tenants Union restrict proprietors from looking for lease boosts on existing renters due to boosts in debt service and residential or commercial property tax that have arised from a change in ownership, and forbid property managers from seeking lease increases due to increased management costs unless the costs are affordable and necessary.

PG&E Passthroughs

Tenants who do not spend for PG & E can have their rent increased when PG & E costs go up. PG & E passthroughs should be part of the Operating and Maintenance Passthrough procedure however instead became a separate automatic passthrough when lease control was passed in 1979. These, too, are very unfair as occupants already pay for energy increases as part of the yearly rent increase, which is based on the Consumer Price Index (CPI). Generally, if the landlord is computing the increase based on the previous 2 fiscal year, the property owner must submit a petition with the Rent Board before handing down the increase to renters. If, nevertheless, the property manager uses an earlier "base year" (as a lot of landlords do), they do not need to file a petition with the Rent Board however should file their calculation worksheet with the Board (and connect a copy to the renter's lease increase notification). The "base year" for computing the boost is 2002 for any occupancies 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 property owner's calculations or request a difficulty exemption.

Hardship Exemption

The Tenant Financial Hardship Application (available from the Rent Board in numerous languages) can be filed at any time after invoice of the notification of lease increase or the decision from the Rent Board is issued, whichever is earlier, for petitions for capital improvement passthroughs, basic bond passthroughs (reliable 12/6/19), water income bond passthroughs, utility passthroughs, and operating and maintenance expense boosts. The tenant need not pay the approved rent increase while the appeal is being processed and thought about.
Each renter in the unit who is at least 18 years old, other than for subtenants, should submit documents under penalty of perjury that the approved lease increase will constitute a financial difficulty for among the following reasons:

1. Tenant is a recipient of means-tested public support. Or
2. (a) Gross family income (this would consist of 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 (earnings limits on the Rent Board kind). And
( b) Rent is greater than 33% of gross household earnings. And
( c) Assets, excluding retirement accounts and non-liquid assets (such as automobiles, furniture, etc), do not surpass property amounts permitted by the Mayor's Office of Housing when identifying eligibility for listed below market rate own a home (possession limits on Rent Board type). Or
3. Exceptional scenarios exist, such as extreme medical expenses.

Rent Board Fee

The Rent Board is funded by an annual cost evaluated on rental units covered by lease control. Landlords can hand down to occupants 50% of the cost. As with the annual rent boost, the Rent Board Fee (file 573) can be banked. Landlords can deduct the Rent Board cost from security deposit interest or costs occupants straight. Tenants can not be forced out for nonpayment of the Rent Board cost.