Reshuffling a stacked deck of cards

By Scott A. Freedman, Esq.

In reading the SPOSF Newsletters and in my experience representing property owners in San Francisco, I have repeatedly heard the same complaint, "there's nothing I can do---the law is simply not on the property owners' side." To help in some small way to level the playing field, I offer three steps that small property owners can take.

1. Be proactive
I have often heard from property owners that the cost of doing business outweighs the benefits. However, after talking with these owners, it is apparent that they are not always taking advantage of opportunities available to them. Here are a few examples of rules that can help property owners reshuffle the deck:

• Pass through your capital improvement costs. The capital improvement application process can be daunting, but the Rent Board has simplified it. Once an application for a rent increase is approved, the increased income will repay your effort. Give your tenants the rent increase notice as soon as possible, because if your application is approved, the rent increase will be retroactive to the properly served notice date.

• Enforce your lease terms. Start with a good lease, such as the one offered by SPOSF. But a good lease is just the start. You have to consistently enforce its terms concerning timely payment of rent, use of common areas, and other matters. Doing this can help remove problem tenants and will make eviction proceedings go much more smoothly.

• Know who your tenants are. Starting with a good lease that clearly sets forth the action a tenant must take to inform you about new occupants is beneficial, but acting to enforce those provisions, once you learn of such new occupants, is vital. Use the 6.14 notice.

• Periodically ask tenants about needed repairs. This prevents a tenant from making claims that a property owner failed to respond to such requests, a crucial tenant defense in certain eviction actions.

• Put everything in writing. Even the most informal and friendly of tenancies can go wrong, so a simple statement of the parties' relationship up front can preclude argument to the contrary later.

2. Make use of the Rent Board
I have also heard property owners say that the Rent Board is biased toward the tenants, and that administrative law judges rarely render decisions in the property owners' favor. The Rent Board is supposed to be neutral in its treatment of property owners and tenants. Take good notes of your communication with the Board, and If you have an experience that suggests bias, contact David Fix, david@smallprop.org, and he will discuss the issue with the Executive Director of the Rent Board. The Rent Board is an excellent source of competent and free advice useful to property owners as well as to tenants. Besides offering a number of "Fact Sheets" on its website (http://sfgov.org/site/rentboard_index.asp) on such subjects as the Rent Ordinance, evictions, and allowable rent increases, the Rent Board also offers free phone counseling, (415) 252-4602. The caller can remain anonymous and property owners can obtain an initial opinion as to how the Rent Board is likely to treat a particular case. While its ultimate advice may be that the caller should contact an attorney, many questions can be answered short of that.

3. Review the Rent Ordinance and the rules and regulations that accompany it. I know, I know. That's what attorneys are for. But, as I learned from a law professor, "sometimes a glib understanding is all you need." Take, for example, a property owner who told me she had an apartment where the last original tenant moved out eight months ago. She wanted to know if she could raise the rent to market on the subsequent occupant. "Did you send a 6.14 notice?" I asked, already knowing the answer. "A what?" she asked. Without getting into the details of the 6.14 notice, suffice it to say that this property owner could have potentially increased the revenue three-fold with the simple knowledge that a 6.14 notice was available to her. So get a copy of the Rent Ordinance and Rules and Regulations; a print copy is available at the Rent Board for a nominal fee or on-line for free at:
www.sfgov.org/site/uploadedfiles/rentboard/ordinance080806.pdf.
If, after being proactive, contacting the Rent Board, and understanding the rent ordinance, you are still unclear as to your best course of action, contact SPOSF for referrals to a competent attorney. However, by resorting to these three "front-end" tactics, property owners can reshuffle a stacked deck of cards.

http://www.smallprop.org/newsletter/index.cfm/
News-Reshuffling_a_stacked_deck_of_cards_23.htm