Offering Units Back After Disasters

Recently, tenants in my building were displaced because of a fire next door. The original tenant of one unit has notified me that he wants to return when his unit is repaired, at the same rent. The problem is, I don’t know if his two roommates were still living at the building on the day when everyone was displaced. What should I do?

The rent law was amended after the 1989 Loma Prieta earthquake to require the following:

If a tenant is forced to vacate her/his unit due to fire or other disaster, the landlord shall, within 30 days of completion of repairs to the unit, offer the same unit to that tenant under the same terms and conditions as existed prior to her/his displacement.

The tenant shall have 30 days from receipt of the landlord’s offer to notify the landlord of acceptance or rejection of the offer and, if accepted, shall reoccupy the unit within 45 days of receipt of the landlord’s offer.

The landlord who attempts to re-rent a unit, but refuses to allow a tenant to return to her/his home under this section shall be guilty of a wrongful eviction.

This means that the owner is under a clear obligation to offer the unit for re-rent to all displaced tenants within 30 days after the repair work is completed. The term “tenant” under the rent law includes subtenants “approved by the landlord.” While there is much debate in the industry as to what constitutes an approved subtenant, if you are aware of the roommates’ identities and understand them to have been lawful occupants, you may want to extend the invitation to re-occupy the unit to them as well.

Thus, when the repairs are completed, send the notification to all known lawful occupants. If you have no forwarding address, send a copy to the unit. In addition, ask the Rent Board if any of the departed occupants left a forwarding address there. Perform reasonable and honest diligence, as failure to offer the unit back will subject you to punitive damages.

Due to concerns over waiving an owner’s rights under the Costa Hawkins Rental Housing Act to re-set rent once the last original occupant no longer permanently lives in the unit, most lawyers advise omitting subtenants who moved in after the original tenant from all formal notices and communications. Indeed, an owner almost never wants to establish a direct relationship with a subtenant. This author believes that naming the roommates on the re-offer notification, while identifying them on this letter as subtenants, will not vitiate your rights under Costa Hawkins. Rather, because the local law mandates that the right to re-occupy be extended to all tenants, and because tenants include approved subtenants, complying with the City’s legal requirements will not operate as a bar to enforcing your state law rights at a later time.

Interestingly, if the original tenant declines to come back, but one or more of the roommates accepts the offer, rent could potentially be adjusted to market under Costa Hawkins. Please consult with an attorney to determine if such a rent raise would be warranted.

In sum, always offer up the unit to displaced tenants within 30 days after repair work is completed. Violation of this law carries serious consequences. If you have questions about your particular situation, please contact one of the SFAA associate member attorneys.

DW

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