Legal Corner Q & A

Short-Term Rentals and Temporary Relocations

by Various Authors

Q. Is there anything illegal about furnishing an empty unit and marketing it as a short-term rental?
A. No. In fact, there are many landlords in San Francisco and elsewhere who are doing just that. Known as corporate or short-term rentals, these tenancies are intended to cater to tenants who will occupy rental units for relatively short periods of time. Many times, the occupant is on a job assignment for only a few months and cannot be tied down to a year-long lease.

There is no law that prohibits a short-term lease or the marketing of a short-term tenancy. If, however, an occupant decides to remain beyond the agreed-upon term, you might encounter difficulty in regaining possession of the unit. The act of asking a tenant to leave upon expiration of the term could be viewed as a wrongful endeavor to recover possession in violation of the Rent Ordinance.

Most landlords who enter into short-term rentals are willing to take the risk of the tenant not vacating. The rent charged for a short-term rental is often higher than usual, so extending the term is not a hardship for the landlord. Furnishings provided by the landlord also warrant a higher rent than usual.

Another incentive for short-term rentals is the knowledge that behind the short-term rental is a large company or university that is interested in maintaining a long-term relationship with the landlord. Many times the company is the entity signing the lease as the tenant. These large companies tend to be reliable, pay the rent on time and move their employees out in a timely fashion.
– Clifford E. Fried

Q. In order to ask a tenant to relocate for substantial renovation purposes, what threshold for construction, noise or interference must be reached?
A. Temporary evictions for capital improvement or rehabilitation work have become more and more common as owners seek to improve their properties in this red-hot real estate market. The local rent law allows an owner to temporarily evict a tenant in order to do substantial remodeling and improvement work but imposes some stringent requirements. For example:

The tenant must be invited back to the unit at the rent-controlled rent after completion of the work.
The tenant can only be displaced for the time required to complete the work, and this displacement period cannot exceed three months unless the owner receives an extension from the Rent Board.
The owner must pay each tenant up to $1,000 for moving and relocation expenses not less than 10 days before the tenant leaves.
All necessary plans and permits must be on file with the Department of Building Inspection before the eviction notice is given, and the tenant must be advised in writing that the permits/plans can be viewed at the Central Permit Bureau. (I also recommend that you attach the plans and permits to the temporary eviction notice.)

The law states that a temporary eviction can only occur if the improvements make the unit hazardous, unhealthy and/or uninhabitable while work is in progress. I have encountered situations where the owner pulls work permits, only to have the tenant take the issue before the Board of Permit Appeals and request that the permits be reconditioned in order to allow the tenant to stay while the work is performed. Thus, you must be careful when deciding whether or not to serve a temporary eviction notice because many cosmetic improvements such as painting or carpeting do not warrant displacement.

The initial question is always: Will the unit really be rendered unlivable? If you are tearing apart the kitchen, the answer may be yes. If, on the other hand, you are rehabilitating a bathroom in a two-bathroom unit, then the tenant could probably stay. (In one of my cases, the unit had one bathroom, but the tenant secured an agreement with the upstairs tenant to use his bathroom and, as a result, successfully challenged the temporary eviction.) The owner must also be aware of premise liability because a tenant who is injured at a construction site will most certainly pursue a claim for personal injury. Contractors and attorneys can help you make this analysis.

In preparing the temporary eviction notice, I always recommend that the landlord state what work will be required and precisely why this work will make the unit unsafe. I also request that the tenant keep the owner informed of his or her forwarding address in order that the owner can contact the tenant once work is completed. Failure to immediately inform the tenant in writing that the unit is again ready for occupancy will provide valid grounds for both a wrongful eviction claim and a decrease-in-services petition.

Temporary evictions are complicated by a balancing act that involves determining whether or not the unit will become unsafe for habitation during the work. Your temporary eviction notice and your plans/permits must be complete, accurate and able to withstand legal challenges. You must ensure that the displaced tenants are informed promptly when work is finished. Therefore, as in the case of any rent-control eviction, I advise you to seek competent legal counsel before asking the tenant to vacate.
– David Wasserman

Q. In terms of transferring title, what is the difference between holding property as “joint tenants” and “tenancy-in- common?” What about property owned by a married couple?
A. If you hold title to property with someone as tenancy-in-common, upon the death of a title holder, the interest of that title holder goes by way of his will, or if there is no will, in accordance with the state law that deals with the inheritance and the right of succession. In order to effect the transfer of the interest in the property, probate must be filed, which is a court procedure.

If you hold title to property with someone as joint tenants, upon the death of one title holder, the deceased title holder’s interest transfer by operation of law to the surviving joint tenant(s). To effect this transfer upon death, the survivor ordinarily records a certified copy of the death certificate.

Married couples may hold title to property either as joint tenants or as tenants-in-common. While it may seem, at first glance, to be advantageous to hold title as joint tenants, there are a variety of estate planning and tax planning issues that may not make sense in your case. You should consult a qualified estate tax professional to determine what works best in your situation.
– 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. Consult the advice of an attorney for any specific problem. Clifford E. Fried is with Wiegel & Fried, 415-552-8230. David Wasserman is with Wasserman & Taxman, 415-567-9600. Jeffery P. Woo is with Woo & Associates, 415-705-6470. Copyright © 2004.