Dealing with Tenants who are bringing up laws.

Real Estate Agent · Oakland, CA · Member since 2018 · 54 posts · 42 votes

Hi BP community,

I am pretty new to running a rental property. I recently took over managing a property for family in the San Francisco. I was discussing rent and property situation with my tenants, and they got pretty heated and threaten me with legal jargons. I am pretty ignorant of the laws and wondering how should I approach this issue going forward.

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Chris Szepessy

Catskill, NY · Member since 2018 · 636 posts · 668 votes

Sounds like it might be best to NOT sign a new lease with them. Give them their 30 day notice (or whatever is necessary in your area) and find better tenants. When tenants start "threatening" to withhold rent or start throwing around legal terms, it usually doesn't end well. 99% of the time they have zero idea what they're even talking about.

Is this your property or are you just managing it? From the little info we have, it sounds as if the tenants are mad that their rent is going to go up and they are looking for reasons for it not to.

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Alex Etlin
Member since 2018 · 10 posts · 3 votes
7y
@Louis W.
Anti-gentrification Group
0 Reply
Bruce Chang
Member since 2018 · 15 posts · 2 votes
7y
@Louis W.
In rent controlled San Francisco, lease agreements do not expire. There is no month to month or year to year lease. If you still have a copy of the old lease agreement, that is the one you and your tenants are legally bound to. It sounds like a very complicated situation. Are the original tenants listed on the lease still occupying the property?
0 Reply
Cameron Daniel
Member since 2019 · 1 post · 0 votes
7y
@Louis W. Talk to an attorney AND property management company. You are dealing with state and local laws that are very tenant friendly and one mistake can cost you big time.
Short term plan should be to get them out with the assistance of the attorney and coordinate the management responsibilities with professionals. It’s worth the cost at this point.
Take a year or so learning the laws and landlord responsibilities before thinking about doing it yourself.
0 Reply
Josh Dane
Rental Property Investor · Chicago, IL · Member since 2013 · 100 posts · 85 votes
7y
@Louis W. Long road ahead of you with these tenants.. can already tell.. if possible, find new tenants as soon as you can..
0 Reply
Kenny C.
New to Real Estate · Puyallup WA · Member since 2009 · 85 posts · 39 votes
7y
@Louis W. Yes hire an attorney.
0 Reply
Brian Ploszay
Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
7y
Hard to work with tenants like these that are using their amateur interpretations of tenant law to bully you. I can tolerate a lot, but not this type of behavior. San Francisco has very friendly tenant laws by the way, so eviction is not easy.
San Francisco probably has rent control laws, so you may only be able to raise rents a certain amount. Do this. San Francisco is one of the best rental markets in the nation (assuming you bought your building awhile ago). No reason to subsidize those tenants with low rents.
If you raise their rents with proper legal notice, they will be in default if they don't pay.
Consult a local attorney specializing in tenant law and evictions for accurate advice. Or else the tenants succeed in managing you.
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Louis W.
OP
Real Estate Agent · Oakland, CA · Member since 2018 · 54 posts · 42 votes
7y
I no longer have the old lease. An elderly family member was managing this property before. I don't think they kept much documentation. I think they did lease agreement many years ago, and they just stop. After my elderly family passed, I am trying to pick up the pieces. They trust tenant and kept the rate super low for them. Now, I think about it, the tenant took advantage of the elderly's old age and now taking advantage of my lack of experience.
Currently, I am looking for a good PM who would take on this tough case and consulting with professionals. The tenants still sending in new request of problems need fixing. Some of them are impossible to fix without a big upgrade that requires them to move out. Seem like they are trying to document me in a negative light. Going to transfer this to PM ASAP.
1 Reply
Amit M.
Rental Property Investor · San Francisco, CA · Member since 2013 · 1k+ posts · 1k+ votes
7y
OMG way too many off comments here, as San Francisco rentals are in a different stratosphere of crazy
1- your tenants are most likely under rent control (unless you hit the lottery and your bldg. was built after June 1979). Therefore you can’t raise rents more than the piddling allowed yearly amount. Expired lease? Who cares in SF, they are under RC, period.
2- how long have the tenants resided there? How low are their rents? (I imagine low rents...anti gentrification crowd who want to preserve their cheap housing in an expensive city...law is on their side so tread cautiously.)
3- you and your family need to determine if your goals are: A- just keep the bldg with existing tenants and rents. B- try to get them out, meaning big $$$, and big hassles. But your bldg will be worth more (and a lot more if you invest and renovate the units after vacancy.) C- the path of least resistance is to sell the bldg. Plenty of eager buyers experienced with SF RE that would buy it. It’s probably appreciated a lot too, so maybe it’s time for your family to cash out?
Basically you’re in way over your head trying to do this on your own. A lawyer will cost you $5k to over $20k, depending on your goals (tenants get one free BTW, courtesy of our Board of Stupivisors :)
If you just want to keep bldg with existing tenants, you’ll still need advice, as it sounds like they are making issues (either warranted wrt basic repairs, or not.) You can take this up with a lawyer, or talk to a local property management firm in SF that may be able to deal with the tenant requests. Again it depends on the condition of the bldg/units, and what they are claiming as needing repairs.
Feel free to add more details on the bldg location, rents, unit sizes, etc. as it will help me advise you further.
4 Reply
Bruce Chang
Member since 2018 · 15 posts · 2 votes
7y
@Louis W. - If the property is under rent control and rents are very low, you may have a difficult time finding a property manager as their fees are based off of a percentage of the rental amount. Right now you need to address any habitability issues, because that is what they can sue you for if that is their angle.
0 Reply
Lee Bell
Real Estate Appraiser · Isabella lake, CA · Member since 2018 · 628 posts · 491 votes
7y
@Louis W.
It's good that you are getting help.
Don't dig yourself a deeper hole by saying or doing the wrong thing because you don't know the rules. Yet.
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Jeff Gates
Investor · Cathedral City, CA · Member since 2014 · 481 posts · 170 votes
7y
Don't worry this guy. He does not need a lawyer. He needs new tenants. After a lease has expired the contract is automatically a month to month. Give the tenants a 30 days notice carefully, with process server. I say carefully since they feel like they want to fight. If they get a 30 days notice 35 days ahead of vacancy with a process server. They simply move out. If not, you process a 3 days notice for eviction. Then find nice new tenants who are happy.
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Account Closed
Real Estate Investor · Marysville, OH · Member since 2014 · 242 posts · 196 votes
7y
It could be that the area you are in has rent controls too. Although I have no idea. You should definitely consult with someone very experienced in your specific area. Paying for an hour of a real estate attorney's time would probably be worth your while.
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Charles Kao
Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
7y
@Louis W. I'll keep it simple. 1)Get a lawyer 2)Have a PM company ready to go 3) If the tenant is difficult or threatens to be difficult then simply say, if your needs are not being met I will have a propery management company I have been working with reach out to you as I am likely going to have them take over. I would love to work with you but feel the management company can best serve your and my needs. Most of times they do not want to deal with property management because the PM will get it done so they will understand you are threatening them without saying so that they can do it the easy way or the hard way.
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Al Pat
Rental Property Investor · Atlanta, GA · Member since 2016 · 325 posts · 253 votes
7y
@Louis W. At some point you have to decide how long they stay with you. One month one year or ten years. If I were you, I will meet again with them and show empathy. Say something like - with all the issues they have been having, you believe they deserve better place to live for what they are paying and you really want to help them with it. Here is your 30 days notice, hope you find something better, we are letting you out.
0 Reply
Steve Mason
Rental Property Investor · Nashville, TN · Member since 2017 · 38 posts · 15 votes
7y
I agree with Chris, sounds like they may be trying to deflect the real issue, which is they in no way want you to increase the rent. I think I would present them with a new lease, along with a 30 day notice to vacate and tell them to choose one. You can't always be so nice to some people, unfortunately. Best of luck.
0 Reply
Jordan Thibodeau
Rental Property Investor · San Jose, CA · Member since 2013 · 486 posts · 170 votes
7y
SF has some stringent laws regarding landlords and if you aren't seasoned property manager your tenants can play games with you. I would definitely make sure you have read up on them. You can find some of them here. And Read this book. Document everything. Consult with a landlord lawyer, I know of a good one, PM me. Of course lawyers aren't free. If you don't have time to manage your units, get a Property manager.
0 Reply
Brian Egr
Flipper/Rehabber · Lincoln, NE · Member since 2016 · 144 posts · 71 votes
7y
You just ran into what we in the business call a "professional tenant". Get their email address and follow up every conversation you have with them in an email documenting what you talked about. And blind copy your lawyer on it!!
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Lynnette E.
Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
7y
Originally posted by @Jeff Gates:

Don't worry this guy. He does not need a lawyer. He needs new tenants. After a lease has expired the contract is automatically a month to month. Give the tenants a 30 days notice carefully, with process server. I say carefully since they feel like they want to fight. If they get a 30 days notice 35 days ahead of vacancy with a process server. They simply move out. If not, you process a 3 days notice for eviction. Then find nice new tenants who are happy.
BUT he does not know the rules, and they likely have been in the house long enough to require a 60 day notice! That is why he needs someone who knows the rules to do this.
My experience in rentals in CA were in the LA area, but long term tenants in the LA area got 60 day notices, not 30 days there. I can not imagine SF would be more conservative than LA.
And someone who knows the rules can also use those repair requests to his advantage--way too many repairs needed, you are right tenant, so now the house is a disaster and you need to move out so I can fix in over the next 6 months! And they will know what he really does need to get fixed ASAP.
0 Reply
Lynnette E.
Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
7y
Another thing is that in CA there are also notices he needs to give about how to request the inspection, when it can be scheduled, how long he legally can store stuff left, the cost for the storage, if any, and how to reclaim stored items. It is best in CA to put that information in the 60 day (or maybe 30 day) notice.
And in the mean time, their repair requests may be their way of putting all the damage on the landlord as 'we asked him to fix it'. An experienced PM or attorney will know how to screen these requests as - that is your damage, not my fix at my cost.
Also, he needs to try to figure out a way to find out the amount of the deposit for damages that his deceased relative may have, and if there is a pre inspection form anywhere, and what would be wear and tear based on how long they were there. e.g. there 15 years, never replaced the carpet, likely it can be totally destroyed and that is not damage. Someone with experience can help him with this.
0 Reply
Alvin Johnson
Flipper/Rehabber · Phoenix, AZ · Member since 2018 · 3 posts · 0 votes
7y
@Louis W. No matter what, sit in and be involed even if you hire anyone. Make sure you're involved as much as you can. You're a Boss for throwing yourself into the ring. As long as you're learning, the price of hard realization is worth it because it gives you a base to launch from.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Dennis M.:

Lots of good solid advise . If there’s anything I could add it would be about tenants throwing around legal jargon and their rights. When I hear stuff like the buzz words words ; courts lawyers laws or attorneys etc. I immediately tell myself in mind that I have no future business with this person . I begin to consider ways of getting this tenant out of my life and my rental . I will not tolerate being threatened . I don’t reason or negotiate with these types
I think property is in San Francisico they have rent control etc.. like over in Oakland or Berkeley it can cost a landlord 10 to 30k to get a tenant out this is money you pay the tenant to leave.. All of the folks on here from all over America dont really understand how SF rent control works.. its more like NYC .. its just not hey your too much of pain your evicted. :)
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Louis W.
OP
Real Estate Agent · Oakland, CA · Member since 2018 · 54 posts · 42 votes
7y
I emailed PM and lawyers and waiting for their response.
It seems the laws protecting the tenant in SF is super strong. I don't think the 30 day notice work even though they have no lease agreement for a long time already. My family already disappointed with my failure to manage properly and the need to spend more with PM and lawyers. They think we should leave the tenants alone, and the tenant might move out eventually, (maybe 5 generations later...)
Anyway, thank you once again for everyone help. I learn a lot from this. I am very glad now that I have hired PM for my own real estate properties in the Bay Area, they are worth every penny! I will be handing this SF property back to my family, and I will suggest them to get PM and Lawyers going forward.
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Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
7y
Learn the property code for your state/city. Know if you have rent control in your place. If no rent control, raise the rent and try to get a new tenant.
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Lynnette E.
Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
7y
Originally posted by @Louis W.:

I emailed PM and lawyers and waiting for their response.
It seems the laws protecting the tenant in SF is super strong. I don't think the 30 day notice work even though they have no lease agreement for a long time already. My family already disappointed with my failure to manage properly and the need to spend more with PM and lawyers. They think we should leave the tenants alone, and the tenant might move out eventually, (maybe 5 generations later...)
Anyway, thank you once again for everyone help. I learn a lot from this. I am very glad now that I have hired PM for my own real estate properties in the Bay Area, they are worth every penny! I will be handing this SF property back to my family, and I will suggest them to get PM and Lawyers going forward.
So sorry that you had to be in an uncomfortable situation, then as you were trying to figure out what is best to do, find out that all your efforts are not appreciated by those who you are doing the management for. I learned the hard way that when people stay at a place too long they think they own it. They will do anything to not have to move or have a rent increase.
My parents had a rental that was 39 years and 11 months of tenancy by the same people. The other remaining rental had the same people for 23 years. Major entitlement issues and no appreciation for the way low rent--$675 and $725 a month. They were side by side cookie cutter homes. Only real difference is that one had a huge enclosed patio. That one is now owner occupied. One house was sold to a vet, the other to an investor. It rented for $2000 immediately! My parents had not raised the rent in decades because mom thought that the people were too poor to afford market rent, as they drove a $40k+ brand new truck and a $50k+ car, and because she did not need to money herself.
My word to the wise is to never let renters stay more than a decade!
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Wilson Lee
Birmingham, AL · Member since 2014 · 178 posts · 75 votes
7y
Ok, Any tenant that wants to buck up to there landlord is a massive red flag. I strongly recommend you end the lease now and enjoy a nice new tenant. If there is not a written lease, it is a verbal lease. If you every go to court. The judge will decide the general terms of the lease. Check your state laws, Most states say your on a month to month where there is no term.
Give them a notice that the lease is not renewing and to vacate in XX number of days, whatever your state requires. A lawyer is a good idea.

Now, If the tenants are barking threats now, It will only get worse later.
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