I inherited a house in San Francisco from my aunt.
My aunt had rented her basement (probably illegally) to an elderly couple for a few years at a price below market price. I don’t believe there was a lease, and it’s probably against the building code to have tenants in the basement. The couple’s family lives nearby.
I really prefer not to go ahead with 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 host? Can I just cancel them to cancel the rent? Do I have the right to turn them off? (I don’t intend to, but just in case.) Or do I have to sell the house to terminate the lease?
I’ve heard that California has very strong protections for tenants and that eviction is difficult. The tenants are an elderly couple but they are healthy.
I’m afraid if I accept rent from them, it’s an acknowledgment of our 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. Can you please help?
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Before you move, consider whether you want to keep owning the house or sell it since you’ve said you don’t want to be a landlord.
I would say step one is to contact the residents and politely ask them if they can vacate the unit because ownership of the home has changed hands. Explain the situation to them – if you’ve been renting below market rates, you want to end that pre-existing relationship and you’re also not keen on managing a rental when you’re abroad.
Also, be clear and firm and tell them that you don’t want to rent the unit at all and that you plan to sell (or any other plans you have).
You must be clear about your intention. Because if you want to clear the house before you sell it, you have a tough road ahead of you.
You can raise the rent to the market price and then see if they can pay, which would be a hard way to push them out. They would pay, or not be able to pay and be late with the rent, or move out.
You can also consider selling it together with the tenants. Real estate investors may be interested in purchasing this property as it is located in San Francisco. Some may be fine with being a landlord and dealing with the mess of tenants who don’t pay a market rate.
But if you are determined to let the tenants move out, step two would be to contact an attorney to get a sense of how the eviction process works.
Scott Freedman, an attorney with San Francisco-based law firm Zacks, Freedman & Patterson, told MarketWatch that since there is no lease, the unit is considered “illegal” under San Francisco law.
And “even if a rental unit is ‘illegal’ in San Francisco, it is treated as a legal unit for purposes of determining whether, how, and under what conditions a landlord can ask a tenant to vacate the unit,” he explained.
That means a landlord needs at least one reason from a list of “Justifiable” reasons to ask the tenant to leave. You must also pay moving costs. And generally, you should also give these people written notice, 30 or 60 days in advance.
It’s not something easy you can do yourself (unless you’re a lawyer.)
Freedman said one or more “legitimate reasons” may apply in your situation. But he also stressed that the list does not state that a tenant is being asked to leave “simply because a landlord no longer wants to rent a particular unit.”
And assuming these people paid rent to your aunt on time at the rate she set, you may not be able to just ignore the rent payments they make and pretend they didn’t pay, as there is a history of transactions that a reveal relationship.
But these payments also put you at risk, Freedman said. “It is also technically illegal to collect rent for it [illegal units]and it can be difficult to obtain proper insurance for the rental of an illegal unit,” he added.
He recommended that you contact the San Francisco Rent Board to get information about Just Causes and illegal units.
Also consult a lawyer. Freedman agrees with you that tenant protections are strong in SF, “and the consequences for even innocent mistakes can be significant.”
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