Challenges of San Francisco Housing Authority: a springboard of legal topics for the rest of us

The San Francisco Housing Authority has had no shortage of problems over the course of many decades. The embattled agency found itself in a hole with the federal government and has been plagued by management and maintenance issues surrounding budget cuts and, candidly, sloppy local oversight.

Now its latest struggle is to evict a group of occupants in Potrero Hill who refuse to leave substandard buildings slated to be demolished for new, denser residential complexes to take their place. Several of the recalcitrant families claim a former property manager had been collecting rent, leading them to believe they were legally entitled to stay. The City Attorney’s office, however, has not discovered any evidence of a fraudulent property manager collecting rent “off the books.”

With no convenient or legal means to evict, the inventive San Francisco Housing Authority dangled $5,000 in Airbnb credits or $4,500 in cash to vacate, but the amounts dwindle each additional day they chose to stay. This has sparked outrage by tenant advocates over the adequacy and ethics of the offer.

While Bornstein Law is a casual observer of this news and is not involved in this case, it serves as a springboard to discuss legal issues that other housing providers face.

Cash for keys

Every now and then, we encounter some Type-A personality landlords who encounter a problematic tenant and/or want to raise rents and believe that if they throw the tenant some cash and the tenant moves out, the matter is done. What they fail to recognize is that they can be sued later on for claims that arise from the tenancy.

For example, a tenant vacates in exchange for $1,000 and a return of the security deposit. Six months down the road, the tenant alleges they have a respiratory condition because of a mold infestation. A properly prepared tenant surrender of possession agreement is more than cash for keys. It also removes legal residue because the tenant agrees not to sue the landlord.

The quid pro quo can be for anything, be it one dollar or a million dollars, a trip to Disneyland, or yes, Airbnb credits.

Eviction timelines

Whenever a landlord endeavors to recover possession of a unit, they need to factor in the time it takes to work itself through the court system. If you had asked us in the not-too-distant past, we would have typically predicted that evicting a tenant would take 2-3 months, but that has been elongated. Aside from a court backlog, a new law now gives tenants 10 court days to respond to an eviction action, essentially doubling the time.

Especially painful for rental property owners is knowing that once an unlawful detainer (eviction) action is commenced, they cannot accept a penny in rent because whenever rent money exchanges hands, it reinstitutes the tenancy, and we’ll have to begin the eviction lawsuit anew.

As a hypothetical, let’s say that an owner wants to move into their property through an Owner Move-In Eviction. When the tenant has been there for more than a year, a 60-day notice is required. If the tenant still hasn’t moved out after sixty days, maybe because they haven’t found new surroundings and an eviction has been filed, this process could drag on for months. Certainly, the owner may be horribly disappointed to learn that it takes half a year to move in.”

Worse yet – a real-life example – a real estate agent promises a client that a tenant-occupied property can be sold vacant, only to discover that the tenants cannot be evicted without “just cause.” Be mindful of the permissible reasons to evict and the time it takes to accomplish the goal.

Are lingering residents “illegal squatters?”

The San Francisco Housing Authority has characterized lingering occupants in the decrepit Potrero Hill buildings as “squatters," but this term tells us nothing. Just as cryptic is the term being put forth by tenant advocates that the leftover residents are “unleased residents.” To determine what a landlord can and cannot do to transition occupants of a unit, we have to dig a little deeper.

There can be a break-in situation where people have no prior rental relationship with the property owner and camp out. Other times, there is a son or daughter who has not gotten their life together and was allowed to stay with their parents, and in an act of “tough love,” the parents want them to leave. Perhaps a subtenant remains after the master tenant vacates. In other instances, a tenancy has been inadvertently created when a landlord accepts rent money. Even without payment, allowing someone to reside long-term without objection can sometimes be treated as a tenancy, especially if they contribute in other ways, like services or upkeep.

In an oldie but goodie, our founding attorney elaborated further on this topic.

Nonpayment of rent is the easiest path to eviction

There is an array of choices to evict tenants. According to the San Francisco Housing Authority, there are reports of loitering and engaging in behavior that poses a threat to neighboring residents. It should be noted that there is certain egregious behavior that is not curable. Think of smashing out windows, drug dealing, prostitution, arson, and so forth.

While our office routinely handles nuisances, it may require evidence. As we told CalMatters, the easiest pathway to eviction is nonpayment of rent – it’s easy to prove.

We often scratch our heads when housing providers grope for reasons to evict other than nonpayment of rent. The foremost responsibility of a tenant is to pay rent, and if it goes unpaid, we don’t necessarily have to build a case on other grounds. It’s the path of least resistance.

At the inception of the tenancy and whenever there is a change in ownership, it should be abundantly clear how and to whom the rent is paid- certainly not to a shadowy former property manager, and all payments should be documented.

Parting thoughts

While we are not privy to the details of the particular morass in which the San Francisco Housing Authority finds itself. This presents a good opportunity to remind landlords of the best practices.

We’ve said that there are three critical components of good property management. Excellent communication, meticulous bookkeeping, and knowledge of the law are hallmarks of a successful landlording business, and whenever there is a breakdown in any of these parts, it invites problems.

By tethering themselves to Bornstein Law and our property management arm at Bay Property Group, rental property owners can avoid costly mistakes and resolve disputes most efficiently, taking into account time, risk, and attorney fees.