I’ve inherited a house in San Francisco from my aunt.
My aunt had rented her basement to an older couple (probably illegally) for a few years for below market rates. I don’t believe there was a lease, and it is probably against the building code to have tenants in the basement. The couple’s family is living nearby.
I really prefer not to continue with the leasehold because I live out-of-state, and because of the tough rental laws in San Francisco.
What should I do if I don’t want to be a landlord? Can I just give them notice to terminate the lease? Do I have rights to evict them? (I am not planning to do that, but just in case.) Or do I have to sell the property to terminate the leasehold?
I heard that California has very strong protection for tenants and eviction is difficult. The tenants are an older couple but they are healthy.
I am afraid, if I accept rent from them, that’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. Could you please help?
‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at TheBigMove@marketwatch.com.
Before you make a move, consider whether you want to continue owning the home or to sell it since you said you don’t want to be a landlord.
I’d say step one is to contact the residents and ask them, politely, if they could move out of the unit since the ownership of the home had changed hands. Lay the situation out to them – having rented below market rates, you’d like to terminate that pre-existing relationship, and you’re also not keen on managing a rental when you’re out of state.
Also be clear and firm and tell them you don’t want to rent the unit at all, and that you plan to sell (or any other plans you may have).
You have to be clear about your intention. Because if you want to clear the house of tenants before you sell the home, then you have a tough road ahead of you.
You can raise the rent to market rate and then see if they’re able to pay, which would be a hard way of possibly pushing them out. They would either pay, or not be able to pay and be late on rent, or move out.
You can also consider selling it with the tenants. Real estate investors may be interested in buying this property since it’s in San Francisco. Some may be fine with being a landlord and dealing with the mess of the tenants not paying market rate.
But if you’re dead set on having the tenants leave, step two would be to contact a lawyer to get a sense of how the eviction process works.
Scott Freedman, an attorney at 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 whether, how and on what terms 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 “Just Cause” reasons to ask the tenant to leave. You also need to pay for relocation expenses. And generally, you also have to give these people a written notice, 30 or 60 days in advance.
It’s not something simple that you can do yourself (unless you’re a lawyer.)
Freedman said there may be one or more “Just Causes” applicable in your situation. But he also stressed that the list doesn’t include asking a tenant to leave “simply because a landlord does not want to rent a particular unit any longer.”
And assuming these people have 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, since there is a history of transactions that reveal a relationship.
But these payments also put you at risk, Freedman said. “It is also technically illegal to collect rent for [illegal units], and there can be difficulty with obtaining proper insurance for the rental of an illegal unit,” he added.
He recommended you reach out to the San Francisco Rent Board to get information about Just Causes and illegal units.
Do also consult an attorney. Freedman agrees with you that tenant protections are strong in SF, “and the consequences for even innocent mistakes can be significant.”
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Evicting tenants is a delicate and complex process. In the situation where a tenant is occupying property belonging to someone who has recently passed away, it may not be immediately clear how to proceed. If the deceased landlord was renting out the basement of their property in San Francisco to an older couple for years without a lease, the new owner may be wondering if they can evict them.
The first step for a new property owner in this situation is to identify if the couple residing in the basement has a legitimate tenancy contract. The landlord can investigate if a written rental agreement exists, or if rental payments were being made. If a tenancy agreement is determined to be legitimate and the tenants are current with their payments, the owner must then follow applicable eviction procedures as outlined by local laws.
If the tenancy is deemed to be an invalid lease, or the tenants are in arrears of their rent payments, the new owner may proceed with the whole process of evicting the tenants from the property. This process generally involves an official notice period (which typically ranges from days to weeks depending on the state/country), followed by court proceedings if the tenants do not comply with the notice. Additionally, the owner may need to give additional time for the tenant to vacate the premises, depending on the laws in the region.
In conclusion, the new property owner should take into account the complexity of the eviction process and the importance of following local laws to ensure a valid termination of the tenancy. Although it can be a difficult situation to manage, citing legalities and ensuring the well-being of the tenants is key to successfully executing the eviction.