6 ms·

S.F. Tenant Forced Out by 315 Percent Rent Hike Wins $400,000 Settlement

16 points by happy-go-lucky 10y ago

dmitrygr 10y ago
This is insane. An owner of a property not subject to rent control should be free to raise rent to any amount. The argument that "Look, you can increase the rent to market rate, but you can’t raise it way above market rate" is completely insane. If I want to charge you $900,000 per second to rent my house, I am free to, and you are free to not rent it then.
- rsj_hn 10y ago
  Actually, no. Charging existing tenants more than the market rate in order to evict them and so avoid your obligations under the OMI regulations is not something that you are allowed to do. If you want to do an OMI, then do the OMI. File the paperwork, compensate the tenant, wait the required period, and do the owner move in properly. Nothing forces you to be a landlord -- in this case the owner inherited a house with tenants. They can always sell the asset to someone who is familiar with the laws and is able to comply with them. Given the high prices in SF, this should be easy to do. But owning property with an existing tenant makes you a landlord -- you are choosing to be in this highly regulated line of work. It used to be case that landlords could do whatever they wanted to tenants, but the law has since changed. Now being a landlord requires that you maintain the property, that you give proper notice for things like rent increases, that you file paperwork when you want to do the OMI, and that you compensate the tenant for evicting them due to no fault of their own (such as what happens with an OMI). So please do your homework instead of arguing that you should be able to do whatever you want to your tenants.
  - jimmywanger 10y ago
    I don't think that's what happened in this case. They removed an illegal (that's the key word) in-law unit, making the unit a single family home. That single family home was no longer under the rent control laws, enabling the owner to jack up the rent. If they had gone by the book, they would have just had to pay the tenant 9.5k to go away, which is what (in retrospect) the owner should have done. 400k seems egregiously high, and designed to pander to populist opinion rather than any reasonable interpretation of the law.
    - FireBeyond 10y ago
      Who installed the in-law unit, the tenant, or the owner?
      - sfrailsdev 10y ago
        I believe the previous owner, whom the current owner inherited from.
        CrossWired 10y ago
        The article indicated an inheritance, thus likely a family member?
        FireBeyond 10y ago
        Which is not the current owner's "fault", but not the tenant's either, which to me makes the fact that it was the supposed 'triggering event' rather unfair.
    - dragonwriter 10y ago
      > That single family home was no longer under the rent control laws, enabling the owner to jack up the rent Unreasonable rent increases to circumvent OMI rules are generally prohibited in such rules (since they are the most obvious way to effect an eviction pretextually), which are independent of rent control rules. The legal issue here was the OMI rules, not rent control, so the illegality of the other unit or the change in rent control status is irrelevant. > 400k seems egregiously high, and designed to pander to populist opinion rather than any reasonable interpretation of the law. It's not a 400k award, it's a 400k settlement, which means that the owner clearly thinks that the actual award that survived all appeals plus the cost of litigation (including the cost in the owners time) would be at least that much.
      - jimmywanger 10y ago
        > It's not a 400k award, it's a 400k settlement, which means that the owner clearly thinks that the actual award that survived all appeals plus the cost of litigation (including the cost in the owners time) would be at least that much. Why did you nitpick a point instead of addressing the egregiously high seeming cost? Your point merely buttresses my point, which is that 400k is far more than can and should be reasonably expected.
  - dmitrygr 10y ago
    You are not charging them! You are notifying them that you will not renew their permission to USE YOUR property unless they pay more.
    - Gibbon1 10y ago
      The issue here is your hyper libertarian views on the Divine Rights of Property Owners(tm) isn't shared by wider society, nor supported by the law.
- sfrailsdev 10y ago
  Not if you want your property rights to be enforced or a court of law to uphold your position.
- dragonwriter 10y ago
  > An owner of a property not subject to rent control should be free to raise rent to any amount. They are free to raise the rent to any amount. They just are limited in doing that for the purpose of forcing the tenant to move out so that the owner can move in, and avoiding payment to the tenant that would otherwise be required under the owner-moves-in rules. > If I want to charge you $900,000 per second to rent my house, I am free to, and you are free to not rent it then. Sure, but if you do that to get me to move out so you can move in, where there are OMI rules, you still have to make the OMI payment. Or, better, don't bother with the pretext and just make the payment.
- thekevan 10y ago
  If he had raised the the rent as he did and then rented it to a different tenant, there would be no issue. If he had raised $100 a month, she decided to move out and he moved in, there might not have been an issue. You give up some rights on your property when you become a landlord. For instance if you own a home, you can go in and out of any part of that home whenever you like. However if you rent it out to someone else, you lose that right. (You can enter but must give notice a certain amount of time in advance.) As a landlord, you have the right to raise rent above market rate in most areas, but in this case you lose the right to move in if said raise in rate causes the tenant to move out.
  - gozur88 10y ago
    >You give up some rights on your property when you become a landlord. That's a big reason for the shortage in rental units. To navigate this environment safely you really have to be a full time landlord with good legal advice and relatively deep pockets. There are probably thousands of MIL units and back rooms that would be on the market if not for the legal risk.
    - jibalt 10y ago
      No, actually, it's not, but nice story.
      - gozur88 10y ago
        Yes, actually, it is, but thanks for the reply.
        jibalt 10y ago
        So is it "probably" or is it "actually"? You don't have an evidentiary foot to stand on and you know it.
        gozur88 10y ago
        Nor do you have any evidence it isn't true. That was a pretty bold assertion on your part.
- jibalt 10y ago
  "This is insane." No, it's the opposite. "An owner of a property not subject to rent control should be free to raise rent to any amount." That "should" reflects the morality of a sociopath. "The argument that "Look, you can increase the rent to market rate, but you can’t raise it way above market rate" is completely insane." No, it's the opposite. "If I want to charge you $900,000 per second to rent my house, I am free to" Not in a rational society that doesn't cater to sociopaths. Also, that's a strawman that doesn't relate to the situation in the article.
- crimsonalucard 10y ago
  I understand your perspective. As a landlord myself, why can't I choose to charge whatever I want for something I own? It makes sense but you must be empathic and understand things from the tenants perspective as well. The tenant lives on your property not because he wants to, but because he has no choice. The tenant cannot afford property, and if things remained lawless the balance of power would unfavorably shift to the landlord. Without law you literally have the power to make the tenants life a living hell. You can raise rent without notice. You can kick him out the second there is a higher bidder, you can kick him out simply because you don't like his shoes. Imagine that! a person left with no place to live because someone didn't like his shoes. This is obviously not moral, and thus that is why laws exist to protect tenants.
afinlayson 10y ago
If you don't understand the rental laws don't be a landlord. There's too much of a belief that landowners can do whatever they want.
crimsonalucard 10y ago
The landlord definitely had no right to raise rents to such an absurd price, but a 400k penalty is equally absurd. I have no respect for both people in this case.
- jibalt 10y ago
  I have no respect for you, since it was an agreed upon settlement that reflected the penalty that the landlord would have faced had he gone to trial, and that penalty wasn't set by the tenant.
  - crimsonalucard 10y ago
    There is no need to get personal here. I am stating my opinion of these two people as a bystander, you are making a personal remark to me. There are limits to an agreement. In terms of respect, I respect people who value logic, reason and morality over terms of an agreement. Your point taken to the logical conclusion means that agreements can override everything including human rights. 400,000 is unreasonable. Although the tenant didn't set the penalty she was rewarded not compensated for her troubles. Sure the word of the law is final, but did the tenant deserve 400K? No. The tenant does not deserve 400k as much as the tenant does not deserve to have rent prices used to kick her out.
    - dvdhnt 10y ago
      jibalt should have said they don't respect your conclusion given that the parties involved came to an agreement. The tenant is not getting $400k, there's no world where the attorney doesn't take at least half of that through hourly and itemized billing. We also don't know how this would affect the landlord's ability to retain, sell, or lease the apartment in the future had they lost this suit. I'm going to go ahead and assume, however recklessly, that the landlord can afford the penalty since they both agreed on it and were the beneficiary of at least one estate.
      - jibalt 10y ago

This is insane. An owner of a property not subject to rent control should be free to raise rent to any amount. The argument that "Look, you can increase the rent to market rate, but you can’t raise it way above market rate" is completely insane. If I want to charge you $900,000 per second to rent my house, I am free to, and you are free to not rent it then.

rsj_hn 10y ago
Actually, no. Charging existing tenants more than the market rate in order to evict them and so avoid your obligations under the OMI regulations is not something that you are allowed to do. If you want to do an OMI, then do the OMI. File the paperwork, compensate the tenant, wait the required period, and do the owner move in properly. Nothing forces you to be a landlord -- in this case the owner inherited a house with tenants. They can always sell the asset to someone who is familiar with the laws and is able to comply with them. Given the high prices in SF, this should be easy to do. But owning property with an existing tenant makes you a landlord -- you are choosing to be in this highly regulated line of work. It used to be case that landlords could do whatever they wanted to tenants, but the law has since changed. Now being a landlord requires that you maintain the property, that you give proper notice for things like rent increases, that you file paperwork when you want to do the OMI, and that you compensate the tenant for evicting them due to no fault of their own (such as what happens with an OMI). So please do your homework instead of arguing that you should be able to do whatever you want to your tenants.
- jimmywanger 10y ago
  I don't think that's what happened in this case. They removed an illegal (that's the key word) in-law unit, making the unit a single family home. That single family home was no longer under the rent control laws, enabling the owner to jack up the rent. If they had gone by the book, they would have just had to pay the tenant 9.5k to go away, which is what (in retrospect) the owner should have done. 400k seems egregiously high, and designed to pander to populist opinion rather than any reasonable interpretation of the law.
  - FireBeyond 10y ago
    Who installed the in-law unit, the tenant, or the owner?
    - sfrailsdev 10y ago
      I believe the previous owner, whom the current owner inherited from.
      - CrossWired 10y ago
        The article indicated an inheritance, thus likely a family member?
      - FireBeyond 10y ago
        Which is not the current owner's "fault", but not the tenant's either, which to me makes the fact that it was the supposed 'triggering event' rather unfair.
  - dragonwriter 10y ago
    > That single family home was no longer under the rent control laws, enabling the owner to jack up the rent Unreasonable rent increases to circumvent OMI rules are generally prohibited in such rules (since they are the most obvious way to effect an eviction pretextually), which are independent of rent control rules. The legal issue here was the OMI rules, not rent control, so the illegality of the other unit or the change in rent control status is irrelevant. > 400k seems egregiously high, and designed to pander to populist opinion rather than any reasonable interpretation of the law. It's not a 400k award, it's a 400k settlement, which means that the owner clearly thinks that the actual award that survived all appeals plus the cost of litigation (including the cost in the owners time) would be at least that much.
    - jimmywanger 10y ago
      > It's not a 400k award, it's a 400k settlement, which means that the owner clearly thinks that the actual award that survived all appeals plus the cost of litigation (including the cost in the owners time) would be at least that much. Why did you nitpick a point instead of addressing the egregiously high seeming cost? Your point merely buttresses my point, which is that 400k is far more than can and should be reasonably expected.
- dmitrygr 10y ago
  You are not charging them! You are notifying them that you will not renew their permission to USE YOUR property unless they pay more.
  - Gibbon1 10y ago
    The issue here is your hyper libertarian views on the Divine Rights of Property Owners(tm) isn't shared by wider society, nor supported by the law.
sfrailsdev 10y ago
Not if you want your property rights to be enforced or a court of law to uphold your position.
dragonwriter 10y ago
> An owner of a property not subject to rent control should be free to raise rent to any amount. They are free to raise the rent to any amount. They just are limited in doing that for the purpose of forcing the tenant to move out so that the owner can move in, and avoiding payment to the tenant that would otherwise be required under the owner-moves-in rules. > If I want to charge you $900,000 per second to rent my house, I am free to, and you are free to not rent it then. Sure, but if you do that to get me to move out so you can move in, where there are OMI rules, you still have to make the OMI payment. Or, better, don't bother with the pretext and just make the payment.
thekevan 10y ago
If he had raised the the rent as he did and then rented it to a different tenant, there would be no issue. If he had raised $100 a month, she decided to move out and he moved in, there might not have been an issue. You give up some rights on your property when you become a landlord. For instance if you own a home, you can go in and out of any part of that home whenever you like. However if you rent it out to someone else, you lose that right. (You can enter but must give notice a certain amount of time in advance.) As a landlord, you have the right to raise rent above market rate in most areas, but in this case you lose the right to move in if said raise in rate causes the tenant to move out.
- gozur88 10y ago
  >You give up some rights on your property when you become a landlord. That's a big reason for the shortage in rental units. To navigate this environment safely you really have to be a full time landlord with good legal advice and relatively deep pockets. There are probably thousands of MIL units and back rooms that would be on the market if not for the legal risk.
  - jibalt 10y ago
    No, actually, it's not, but nice story.
    - gozur88 10y ago
      Yes, actually, it is, but thanks for the reply.
      - jibalt 10y ago
        So is it "probably" or is it "actually"? You don't have an evidentiary foot to stand on and you know it.
        gozur88 10y ago
        Nor do you have any evidence it isn't true. That was a pretty bold assertion on your part.
jibalt 10y ago
"This is insane." No, it's the opposite. "An owner of a property not subject to rent control should be free to raise rent to any amount." That "should" reflects the morality of a sociopath. "The argument that "Look, you can increase the rent to market rate, but you can’t raise it way above market rate" is completely insane." No, it's the opposite. "If I want to charge you $900,000 per second to rent my house, I am free to" Not in a rational society that doesn't cater to sociopaths. Also, that's a strawman that doesn't relate to the situation in the article.
crimsonalucard 10y ago
I understand your perspective. As a landlord myself, why can't I choose to charge whatever I want for something I own? It makes sense but you must be empathic and understand things from the tenants perspective as well. The tenant lives on your property not because he wants to, but because he has no choice. The tenant cannot afford property, and if things remained lawless the balance of power would unfavorably shift to the landlord. Without law you literally have the power to make the tenants life a living hell. You can raise rent without notice. You can kick him out the second there is a higher bidder, you can kick him out simply because you don't like his shoes. Imagine that! a person left with no place to live because someone didn't like his shoes. This is obviously not moral, and thus that is why laws exist to protect tenants.

afinlayson 10y ago

If you don't understand the rental laws don't be a landlord. There's too much of a belief that landowners can do whatever they want.

crimsonalucard 10y ago

The landlord definitely had no right to raise rents to such an absurd price, but a 400k penalty is equally absurd. I have no respect for both people in this case.

jibalt 10y ago
I have no respect for you, since it was an agreed upon settlement that reflected the penalty that the landlord would have faced had he gone to trial, and that penalty wasn't set by the tenant.
- crimsonalucard 10y ago
  There is no need to get personal here. I am stating my opinion of these two people as a bystander, you are making a personal remark to me. There are limits to an agreement. In terms of respect, I respect people who value logic, reason and morality over terms of an agreement. Your point taken to the logical conclusion means that agreements can override everything including human rights. 400,000 is unreasonable. Although the tenant didn't set the penalty she was rewarded not compensated for her troubles. Sure the word of the law is final, but did the tenant deserve 400K? No. The tenant does not deserve 400k as much as the tenant does not deserve to have rent prices used to kick her out.
  - dvdhnt 10y ago
    jibalt should have said they don't respect your conclusion given that the parties involved came to an agreement. The tenant is not getting $400k, there's no world where the attorney doesn't take at least half of that through hourly and itemized billing. We also don't know how this would affect the landlord's ability to retain, sell, or lease the apartment in the future had they lost this suit. I'm going to go ahead and assume, however recklessly, that the landlord can afford the penalty since they both agreed on it and were the beneficiary of at least one estate.
    - jibalt 10y ago