Supervisor Hillary Ronen is introducing legislation to close loopholes in the laws governing tenant buyouts. (Kevin N. Hume/S.F. Examiner)

Ronen wants to strengthen tenant protections in buyout law

Advocates say many landlords skirt buyout law by failing to report or using aggressive tactics

San Francisco has seen a drop in Ellis Act and other “no-fault” evictions as rental protections have been fortified locally and at the state level, but tenant advocates say loopholes remain, particularly when landlords offer cash to buy out rent-controlled tenants.

On Tuesday, District 9 Supervisor Hillary Ronen is expected to introduce legislation to close some of those loopholes with changes in the laws governing tenant buyouts, the agreements under which landlords pay renters to vacate their rent-controlled units.

Advocates say that some landlords continue to skirt the 2014 “buyout law” spearheaded by then-Supervisor David Campos by failing to follow through on required reporting or by using aggressive tactics to force tenants to waive their rights or into unwanted negotiations. That law aimed to establish ground rules for and ensure oversight of the buyout process, so that tenants would not be forced into unfavorable agreements under threat of eviction.

The law requires property owners to disclose cash settlements with tenants to the San Francisco Rent Board, and to provide them with information about their rights as they relate to buyouts at least 45 days before entering into negotiations, among other things.

It also prohibits condo-conversions at properties where a senior or disabled tenant entered into a buyout agreement or for the 10-year period after two or more tenants agreed to a buyout. The law gives tenants up to 45 days to rescind their agreement to a buyout.

Regardless, the 2014 law leaves room for abuse, including ultimatums and threats by landlords, or eviction lawsuits in which buyouts are disguised as settlements to avoid the post-buyout limitations.

Ronen’s legislation would supplement the buyout law in four major ways.

It would amend the current law to clarify that an eviction settlement agreement filed within 120 days of the start of buyout negotiations is in fact a buyout agreement, and therefore subject to regulation.

It would also force landlords file a declaration before buyout negotiations begin, and to provide evidence that tenants have received disclosures informing them of their rights.

Ronen is also proposing that a minimum of 30 days be given to tenants between the start of buyout negotiations and execution of an agreement to consider the offer.

Finally, any waiver of rights included in a buyout agreement that has not been filed with the rent board would be void under Ronen’s legislation.

Renters holding on to their homes amid The City’s housing crisis “feel like they’re living on borrowed time, fearing the day their landlord decides it’s time for them to go,” Ronen told the San Francisco Examiner on Friday.

“Unfortunately, landlord attorneys keep scheming ways to maneuver around our current protection and what we see is that tenants are being subjected to steamroller tactics and take-it or leave-it ultimatums,” said Ronen.

Since the 2014 law’s passage, the number of buyouts reported annually has increased steadily, but discrepancies remain in the number of buyout declarations filed with the rent board and the number of buyouts actually executed.

Last year, a total of 962 declarations by landlords evidencing that they have provided tenants with disclosure forms that inform them of their rights were filed with the rent board.

However, only 379 executed buyout agreements were reported. Fred Sherburn-Zimmer, executive director at the Housing Rights Committee, estimated that the actual number of buyouts that occurred is about three times that amount.

Zimmer said that while the organization is seeing evictions decrease when buildings go up for sale, more and more“ landlords [are] harassing and lying to people because they know they can give them money and get them out.”

Ellis Act evictions have dropped 23 percent since the last fiscal year — from 201 in 2017-18 to 154 in 2018-19 — and owner move-in evictions have decreased by nearly 30 percent in that same time period. Evicting tenants in order to take the property off the market or because the landlord wishes to move onto the property is legal, but comes with strict consequences for landlords to discourage speculation.

Buildings where an Ellis Act eviction has occurred cannot be re-rented for several years, among other limitations.

“There are many reasons why landlords don’t have interest in doing these types of evictions,” said Zimmer.

Nearly a dozen letters from attorneys representing San Francisco landlords that were shared with the Examiner evidence ultimatums and aggressive timelines put forth while seeking to engage tenants in buyouts.

According to the notices, tenants are often given just 10 days or less to agree to a buyout or face eviction.

“Rather than immediately move forward with serving the Ellis Act Notice, however, [the owner] would like to invite you to discuss a potential ‘win-win’ alternative,” a landlord attorney wrote to a tenant on July 3.

The tenant was offered just $15,000 to vacate the property by Aug. 31 and given just nine days to accept the offer or face eviction proceedings.

“The tenants are supposed to first be asked if they would be interested in a buyout, after they received [disclosure of their rights] packet,” said Theresa Flandrich, a tenant counselor with Senior and Disability Action. “If neither declaration or final buyout is filed, then no one knows what happened [to the tenant].”

Recently, San Francisco Planning Commissioner Dennis Richards came under fire for violating the buyout law by failing to record four buyouts at a Mission District property that he is co-developing. An aide in Ronen’s office said that the legislation was in the works long before Richards’ property made headlines.

Ronen’s legislation is “about landlords following through on what the law requires,” said Flandrich.

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