Legal Corner Q & A

Should You Turn Units into Boarding Homes?

by Various Authors

Q. I noticed that the PPMA lease fails to include any language on smoking. If an owner wants to ban smoking in the building, what are the steps necessary to make this happen?

A. You are correct that the new PPMA lease, as well as the previous versions, do not include a ban on smoking. However, smoking is one of the few valid grounds for discrimination. In other words, you may enforce a “no smoking” policy in your building. In fact, I encourage this policy if you want to avoid claims of toxic contamination and nuisance by other non-smoking residents and prevent foul tobacco odors from permeating (and ruining) the unit and common areas. I always add the following addendum to the PPMA leases, signed by both the owner and the tenants:

“Tenants are advised that their unit, as well as the building, is non-smoking. Tenants may not smoke in their unit or in the common areas of the building.” I strongly recommend that you make this non-smoking rule uniform throughout the building in order to avoid a problem if one tenant complains that his or her neighbor is allowed to smoke while she or he is not.

A common problem can arise in the case of a landlord who purchases a building and then attempts to adopt a non-smoking policy where one previously did not exist. I do not recommend imposing a non-smoking policy on existing smokers, for they will undoubtedly ignore this change in terms of tenancy and thereby force you to pursue a possible eviction that most likely will prove unsuccessful. However, you can impose the covenant on new tenancies (for example, all new tenancies established under the new owner are subject to this lease covenant).

If the rule were spelled out in these new leases, a repeated violation by a new tenant would support an eviction. I recently encountered a comparable situation when I purchased a five-unit building. A smoker occupied the top-floor unit, and the other tenants complained about smoke emanating into the hallways. Fortunately, the bottom unit with an outside deck became available. I entered into a new lease with this tenant for the bottom unit, with the added covenant that smoking could only occur on the deck and never inside either the unit or elsewhere in the building.

I have never had a complaint since then. Last, please be mindful of complaints from non-smoking tenants about smoke entering into their units or present in the common areas. You should take steps to inform the smoker that his or her activities cannot impair the comfort and safety of the other occupants. Make a solid paper trail if these warnings are ignored and seek competent counsel to assist you with possible legal action if the conduct persists. Failure to take appropriate action may subject you to legal proceedings by the affected occupants who will claim toxic contamination.
– David Wasserman

Q. What legal obligations do I have when I perform an eviction based upon remodeling or demolition?

A. An eviction based on the need or desire to remodel is very different from an eviction based on the need for demolition work. Section 37.9(a)(10) of the Rent Ordinance allows you to recover possession in good faith in order to “demolish or otherwise permanently remove the rental unit from housing use,” if you have already obtained all the necessary permits on or before the date on which the notice to vacate is given.

If you plan on constructing a new rental unit for housing use following demolition, your intent is not to “permanently remove” the unit from housing use and, therefore, you may not proceed under Section 37.9(a)(10). Demolition evictions are most commonly used to remove an illegal in-law unit or perhaps to turn a residential unit into a commercial space if zoning ordinances allow.

Section 37.9(a)(12) allows you to recover possession in good faith in order to carry out “substantial rehabilitation” if you have obtained all the necessary permits on or before the date on which the notice to vacate is given. Section 37.2(s) defines “substantial rehabilitation” as the renovation, alteration or remodeling of residential units that were built at least 50 years ago. Also, these units

must have been condemned, or
do not qualify for certificates of occupancy, or
require substantial renovation in order to conform to contemporary standards for decent, safe and sanitary housing.

Although this definition does not specifically mention “demolition,” substantial rehabilitation “may vary in degree from gutting and extensive reconstruction to extensive improvements that cure substantial deferred maintenance.” Cosmetic improvements alone such as painting, decorating, minor repairs or other work, which can be performed safely without having to vacate the unit, do not qualify as substantial rehabilitation. If the remodel of the unit does not involve permanently removing the unit from housing use and does not constitute substantial

A constant requirement under all of these situations is that you obtain all necessary permits on or before the date on which the notice to vacate is given. The notice to vacate must be served immediately upon the approval of the permits, because if a party were to appeal the approval of the permits to the Board of Appeals, the permits would technically be suspended during the pendency of the appeal. If the permits are suspended during the appeal, you arguably have not “obtained” them pursuant to the Rent Ordinance, and you could not legally serve a notice to vacate until after the appeal has been resolved in your favor. – Stephen Sherman

Q. With the market so tough these days, I’ve had trouble finding tenants willing to vouch for the rent of an entire flat. Is it possible to turn a four-bedroom flat into a “boarding house?” Can an owner rent four individual rooms to four different people, wherein each person is only responsible for the rent of their room?

A. Yes, but you will want to carefully consider the risks and complications you may encounter if you structure your tenancies in this manner. Let me illustrate the problems. In order to increase the total rental income of her unit, my client rented each of four rooms in a house to foreign students. She tried to pick her tenants carefully, but her concern focused primarily on the tenant’s ability to pay rent.

A problem arose when one tenant, whom I will call Bob, got into a fight with another tenant, Mary, and allegedly began a campaign to get her to move out. He allegedly verbally abused her. He allegedly played loud music late at night. He allegedly stole her mail. Mary complained to the landlord and demanded that she evict Bob for harassing her. Of course, Bob denied ever having harassed her. In fact he accused her of stealing his food from the refrigerator, intentionally damaging his television in the living room, and coming on to him.

Where is the fine line between being an obnoxious jerk and a perpetrator of harassment? And who is telling the truth? If the above situation had occurred in a unit with only one lease for the premises, the conflict between them would not have involved the landlord. However, in this example, each person had a separate lease, so the issue of nuisance and the landlord’s responsibility to prevent nuisance, required the landlord to be the mediator, the arbitrator, and ultimately the enforcer of a resolution. At best, mediation may result in a prolonged peace.

As the landlord, you will likely be forced to pick a side and spend substantial money on attorney’s fees in order to evict the offending tenant. If you pick the right side, you may solve the problem. If you pick the wrong side and you lose the eviction action, you face evicting the other tenant and possibly a wrongful eviction action. If you want to accept this risk, comprehensive written leases will help mitigate potential problems.

Each lease must specifically identify the room that the tenant exclusively rents and the rooms that serve as common areas. The lease must also contain a detailed list of “house rules,” which attempts to control the relationship between the various roommates. House rules must address use of the kitchen, storage space, house cleaning, use of the bathroom, overnight guests, smoking, parties, noise, placement of personal property in the common areas such as televisions, to name a few.

I do not know of any pre-printed lease forms for this situation, although I believe the PPMA lease can be modified to accomplish this objective. You should consult a lawyer about making such modifications to your leases. Aside from all this, the Rent Ordinance applies individually to these tenancies. – Jeffery P. Woo

The opinions expressed in this article are those of the authors and do not necessarily reflect the viewpoint of the SFAA or the San Francisco Apartment Magazine. The information contained in this article is general in nature. David Wasserman can be reached at 415.567.9600. Saul M. Ferster can be reached at 415.863.2678. Lawrence M. Scancarelli can be reached at 415.398.1644 Jeffery P. Woo can be reached at 415.705.6470. Copyright © 2003 San Francisco Apartment Magazine