All agreements (such as written and oral month-to-month or lease agreements) you made with the old landlord are binding on the new landlord. Similarly, the new landlord is bound to any legal orders or judgments: if the Department of Building Inspection ordered the old landlord to make repairs, the new landlord must make those repairs; if the Rent Board has ordered rents reduced, the new landlord must follow this order.
Sellers and Buyers Must Inform Tenants of Their Rights
The seller and buyer of a multi-unit building covered under the San Francisco Rent Ordinance must disclose to tenants (in writing) that they cannot be evicted, have their rent increased, or have the terms of their tenancy changed just because the building is being sold or has sold. Beware, though, many landlords try to use the sale or foreclosure of a building to intimidate tenants.
What Can I Expect with a New Owner?
Upon learning that your building is up for sale, first thing’s first: don’t panic. Too often tenants get scared by imagining Ellis Act evictions, owner move-in evictions (OMI) or other horror stories. Tenants sometimes move out just because the building is up for sale, which is exactly what landlords want because vacant buildings command a higher sale price.
What will happen depends on the buyer, and the building’s size and condition. Depending on the building size, you may face the following issues.
Buildings with 2-4 Units
These can be converted to condominiums and are where Ellis and OMI evictions are most likely to occur.
Buildings over 4 Units
These buildings cannot be converted to condominiums and thus a new owner is very unlikely to be evicting for an Ellis or OMI. The biggest danger is likely to be harassment. For example, landlords may try to get tenants to sign new, more restrictive rental agreements or they may try to take away services. Often the harassment is aimed at longer-term tenants paying affordable rents, since landlords will want to make their investment as profitable as possible in as little time as they can.
What Is an “Estoppel Agreement” or “Rental Questionnaire”? Should I Sign It?
When a building is for sale, the realtor often gives tenants an “estoppel agreement” or “rental questionnaire” to sign. The landlord is seeking information in this form to tie your down to what you understand your rental agreement means.
You do not have to fill out or sign this form unless your rental agreement requires that you fill out any estoppel agreements or similar requests; it is for the landlord’s convenience. Any statements you agree to (explicitly or through omission) may come back to haunt you later. For example, if you had an oral agreement to use the backyard and you fail to include this in your form, you may lose that right. Note, though, that if the landlord questions whether or not you are a “protected tenant” for purposes of owner move-in evictions (i.e., senior, disabled, or family with children), you must answer this in order to assert your protected status later.
Protest the Sale of Your Rental Unit
This is probably the best time to stop any conversion of a rental unit to owner occupancy by protesting the sale while allowing legally required access.
Do I Have to Sign a New Rental Agreement?
Many new landlords try to force tenants to sign a new rental agreement. You do not have to sign a new agreement which is significantly different from your current agreement!! Only if your landlord offers you the same agreement which you now have could you be forced to sign it. If you had a lease when you moved in, but are now on a month-to-month agreement, it would probably be safer to sign another lease. Also, it may be to your advantage to sign a lease as that will protect you from the no-fault evictions (such as the Ellis act evictions or OMI) during the period of the lease. Leases can be broken if a suitable replacement tenant can be found.
What If a Bank Forecloses?
Even if the new landlord is a bank which has foreclosed or even if it is the government which has ended up with the building, all of the above is true. Often, though, banks will try to intimidate tenants and will even send eviction notices based on the fact that a bank has foreclosed on the property. This is not a just cause for eviction! San Franciscan tenants not covered under the Rent Ordinance’s other provisions can only be evicted with just cause or at the end of their lease, whichever is later.
Can I Be Evicted or Have My Rent Increased?
If you are covered under the Rent Ordinance, a new owner cannot evict you or raise your rent, except as allowed by the Rent Ordinance. By virtue of being a new owner, the new landlord cannot evict you.
Updated 12/19.