I unexpectedly inherited a multi-unit property with several existing tenants and leases I didn’t draft. Can I implement changes to the lease terms at renewal, and what should I watch out for during this transition?
This is an excellent question and very timely, as SFAA is contemplating a practical way for housing providers to update existing leases on an annual basis. And yes, you may implement changes with a written thirty-day change-in-terms-of-tenancy notice specifying the modifications for those tenancies where the set term has expired. Most commonly, new lease requirements are added, or existing terms are deleted/altered for month-to-month tenancies no longer operating within a fixed (e.g., 1-year) term. A state law, known as Civil Code Section 827, affords us this right.
However, before you seize this opportunity to transform outdated two-page dime store rental contracts to the state-of-the-art SFAA Residential Tenancy Agreement, be aware of San Francisco’s infamous rent regulation which prohibits terminating a tenancy for the breach of a lease covenant that was unilaterally imposed by the landlord. This law, known as Regulation 12.20, reads as follows:
Notwithstanding any change in the terms of a tenancy pursuant to Civil Code Section 827, a tenant may not be evicted for violation of a covenant or obligation that was not included in the tenant’s rental agreement at the inception of the tenancy unless: (1) the change in the terms of the tenancy is authorized by the Rent Ordinance or required by federal, state or local law; or (2) the change in the terms of the tenancy was accepted in writing by the tenant after receipt of written notice from the landlord that the tenant need not accept such new term as part of the rental agreement. The landlord’s inability to evict a tenant under this Section for violation of a unilaterally imposed change in the terms of a tenancy shall not constitute a decrease in housing service under the Rent Ordinance as to any other tenant.
Thus, Regulation 12.20 tells landlords that enforcement of newly added terms through eviction is allowed only when the change is required by law or authorized by the Rent Ordinance (for example, a lawful increase in rent), or if the resident accepted the new terms after being informed in writing that such changes need not be agreed to. Otherwise, you may not threaten or pursue an action to terminate the lease should the tenant breach one or more of the newly added lease provisions.
That said, many lease terms are there to protect the owner and would never be enforceable through an eviction action. For example, the extremely important lead and mold disclosures lessen our liability to tenants and their guests for personal injuries. An attorney fee provision awarding legal fees to a prevailing party is also worth striking, as the legal minds in the industry concluded decades ago that such clauses usually benefit the tenant side in a dispute. Indeed, the SFAA RTA is rife with disclosures and warnings, ranging from the newly added mobility device charging guidelines to the admonitions about open flame cooking and candles. Well over a third of the current lease focuses on providing sound disclosures to occupants about safety in and around the building, how to properly care for the apartment, and what to watch out for in the neighborhood. Hence, the forms committee is contemplating a way to supplement existing leases each year with important updates, understanding of course that such additions or modifications will not be enforced at the eviction court. In the meantime, feel free to add important information to your existing rental contracts through the 30-day change-in-terms-of-tenancy procedure, but don’t use these newly added items to terminate someone’s housing!