Looking to purchase a 2-4 unit multi family property in Oakland, CA. Will be using property as primary residence.
Trying to understand the owner move-in eviction laws in Oakland. My read is that you can evict one unit to use as your primary, but you have to pay a "relocation amount" and one time $2.5k fee. Does this mean I can evict anyone, including a "protected tenant"?
What if I find a duplex with one vacant unit and I want the current tenant to move into that vacant unit and I take their current unit?
Thanks in advance for any guidance.
I encourage you to read the full just cause eviction and owner move in ordinance a few times on the municode website. No, you likely won't be able to do owner move in (OMI) if you own another suitable vacant unit (similar unit in the same building would likely be considered suitable). You should also be able to show you're acting in good faith (the ordinance says so). So renting up a vacant unit and then attempting to doing owner move in on the other right after likely won't work. If you do use OMI, you'll need to keep that unit as your primary residence for 3 years, otherwise you could face damages/be sued by city and/or previous tenant. It might be worth attempting a buyout with the tenant (also has its own ordinance and set of rules to follow), and gives you much more flexibility/doesn't lock you into living in the unit for 3 years. I'd rather buy a tenant out for $10-20K or even more, than do OMI. OMI might not be possible if the tenant is disabled. The definition of disabled is wide and can be anything, even sleep deprived or anxiety, if a doctor says so. Disabled in this case is based on the Fair Employment and Housing Act, is super broad. Effectively, anyone who wants to make themselves fit that criteria, can, without too much hassle.
I'd also encourage you to talk to an attorney (and your insurance broker to make sure you have wrongful eviction coverage in your policy) about your specific plan to gain residence in a unit, once you have an idea of your plan. You open yourself up to massive potential liability walking this path and getting professional help is well worth the fees to make sure you don't miss one of the disclosures or rules.
My advice it to first approach tenants and see if there is a mutually beneficial situation / buyout amount that would work for them and you. Sure, it will cost you more but will avoid the immediately hostile eviction situation than an OMI is 100% of the time. Both parties can walk away happy if you can find a dollar amount that works for all.
It must really be tough to be a LL in Oakland.
You will find that most landlords want to sell their 2-4 units with tenants in place. If you find one that is vacant, expect to compete and pay a bit of a premium. So if you are willing to take on an existing tenant, you can find a deal that many others pass over.
I agree with KT above saying that you should consult an eviction attorney and read through the City of Oakland rental ordinances. I have a great recommendation for an attorney if you want to DM me for that. Also, you might consider getting on these guys newsletter: http://edringtonandassociates.com They put out great landlord specific content that might help you educate yourself.
I hope all this helps.
Thank you all for the responses. I am sure there will be more questions after reviewing ordinances a few time.
You will need to pay the mandate relocation fees at least when you do owner move in evication. When you try to do a buy out instead, you will need to pay at least $1 more than the required relocation fees, give disclosures to tenants and file paper work with city of oakland. I definitely suggest you get attorney help - at least on drafting buyout agreements, which cost at least $1K.
A lot of attorneys will do hour consultations (seems like $300 / hr is the standard rate) and we found one that would even talk for 15 minutes on the phone for free. This attorney said something like "run away like the plague" when I summarized a property were looking at (with tenants).
I AM NOT AN ATTORNEY but I think the point was that, after a tenant has been there for 5 years, they are protected if they can cite medical conditions like anxiety (in addition to being over 65, or handicapped). The home we looked at did have a tenant that claimed he/she was protected (there is form that owners can give to their tenants, and while the tenants don't have to even use it to claim their protected status, it seems like many do) and the seller's were very surprised by this. They stated in their disclosures that this was new information to them, too.
Luckily, the sellers here were very transparent and had good information. The attorney said she usually works with people who have closed on occupied multi-families and THEN are trying to figure out how to move in.
Now, I believe that an owner that also has a medical condition, or checks the box on one of the protected criteria, can do an OMI of even a protected tenant (still have to pay relocation), but this attorney said that the media would come after you (no way to verify this, of course, but you do see stories from time to time about landlords).
One potential tip: We also have seen properties that have tenants in place but that pay pretty close to market rents - my sense is that the market for tenant occupied duplexes/triplexs is very different than vacants - a lot of buyers just don't want to deal with all this and only look at vacant properties. There COULD be a good oppty if you find a good tenant that pays near or actual market rent - less competitive and in the grand scheme of things, still going to pencil out more than someone paying 30 percent of market.
I know people who have done successful owner move-in evictions in Oakland. It doesn’t have to be scary, but you do need to follow the regulations very carefully. You can walk into the Oakland Rent Board and speak with an advisor, they are actually quiet helpful. If you are still looking for a property let me know.
@Benjamin Herhold yep it works, the issue is most lenders require you to move in within 60 days of purchase, and with proper disclosure requirements/notices/etc. you can't guarantee that you will be in within 60 days on an owner move in with a tenant-occupied property.
So, what you would really need to do (again there are situations where it may work) is buy it as an investment property with the lender so that you can take title and then issue an owner move-in. Some of the lenders can chime in if they have seen it work differently, but basically that is why you don't see this as often as you would expect in Oakland/SF/Berkeley.
I had a client working on one in SF for a condo and we were going to make it work until the attorney couldn't guarantee it happening within a 6 month period, which as you can imagine, doesn't boad well.
First thought..... with all the laws and complications of evicting existing tenants when you buy a place, I wonder what the ramifications would be if AFTER you sign all the paperwork to move in and you make an honest effort to evict the designated tenant, it is realized that it would place way to much hardship on that tenant and it becomes very clear that they want to stay in the property? (I’ve heard of this very thing happening countless times in San Francisco, Berkeley, Oakland and the Bay Area in general). The new owner “ gives up “ and let’s all the tenants stay in place.
On the other hand If you can find a vacant duplex that would be great because you can screen your tenants, etc. That’s what I did.