3 Property Management Laws You Need to be Aware of as a Landlord in San Francisco
Here are some rental property management tips if you're in the San Francisco Bay Area.
Being a landlord can be very rewarding, but it can also be confusing and tricky to navigate the laws and regulations. If you are a landlord in San Francisco and you own an investment property that is a single-family home or a condominium, there are some laws that you need to be aware of. It is important that you are aware of these laws as they can affect your rental income, and even how easy it is to evict a tenant. Here are the 3 property management laws that you need to be aware of as a landlord in San Francisco.
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1. Single Family Homes built After June 1979 are Exempt from Rent and Eviction Control.
As a landlord it is important that you know when your property is built, as there are actually different laws for those built on or before 1979, and those that are newer. Owning an investment property built after 1979 has benefits for landlords as it gives them much more control over rent charged, and also giving them much more freedom to evict tenants for various reasons, including if you want to move back into the home or sell the property. There are still rules and regulations of course, and you still need to follow the guidelines in any tenancy agreement signed.
Thankfully as a landlord of a newer property, you do not need to worry about these ordinances, however it is important that you keep them in mind if you were to think about additional properties for your portfolio.
2. Homes and Condominiums in San Francisco Built Prior to 1979 are Subject to the Rent Control Ordinance.
It is useful for landlords in San Francisco to be aware that unless their tenant moved in prior to 1996, any property that was built prior to June 1979 will be subject to the rent control ordinance (source: Bungalow). The reason that the cutoff year is 1979 is because that is the year that the ordinance was passed. So if you own a property that has a tenant in it, and it was built prior to 1979, there are limits to what you can charge in rent.
There are major consequences for landlords that ignore this ordinance, and pleading ignorance is not going to be an acceptable excuse. So ensure that you are aware of these restrictions prior to getting your tenant to sign a rental agreement.
This rent control ordinance exists to protect the tenants and to make more homes affordable for the average San Francisco renter. Thanks to San Francisco being an older city, most of the homes are actually built prior to the ordinance, so around 60% of homes are subject to rent control. This will affect you as a landlord as you may not be able to charge as much rent as you would like and could be a deciding factor as to whether you purchase an older or newer property.
3. Many Homes in San Francisco are Subject to Eviction Control.
As a landlord, you may think that because your property is exempt from the rent control ordinance, that you will also be exempt from eviction control, but this is not necessarily the case. If you have a home that is built after 1979 that has a tenant that moved in prior to 1996, then the eviction control still applies. Ideally you will have a newer property and a newer tenant.
This eviction control is for the protection of the tenant, and landlords need to be aware that they are unable to simply terminate a tenancy. A lease agreement may have a length of time stipulated, however once that term is complete, the lease simply becomes month-to-month. You cannot write a lease agreement stating that a tenant is to automatically move out (be evicted) after a period of time.
There is much to consider before investing in property and becoming a landlord, and the current laws and regulations need to be considered. As can be seen, there are different laws on rent control and eviction control depending on when your investment property was built and also when your current tenant signed a rental agreement. It is therefore imperative that you understand these things before becoming a landlord as it could change how much rent you get, and how much control you have over your own rental property.
Charles is the founder of infoSpike.com. He enjoys real estate investing, marketing, and personal finance. Read more about Charles here.