APRIL 2008
Business Use of Apartment
One of our tenants has been using his apartment for a business
purpose, though he claims he isn’t. What should we do to prove that he is,
and if we can prove it, what then?
First, the landlord should look to the lease agreement and determine whether
there is any prohibition about using the apartment for commercial or
business use. Assuming the tenant has signed the SFAA lease agreement,
the use of the apartment is governed by Paragraph 11 “Use.”
Paragraph 11 states outright that the apartment is to be used “for
residential purposes only and for no other reason... No retail or commercial
or professional use…shall be made unless such use conforms to applicable
zoning laws and the prior written consent of the Owner is obtained in
advance of such proposed use…”
The question doesn’t indicate specifically for what “business purpose”
the tenant has been allegedly using his apartment. Generally speaking,
home-office use is considered reasonable and therefore permissible. In
the high-tech Bay Area, many jobs like web designers, computer programmers,
and similarly themed trades really only require a computer and an internet
connection. Seeking to evict a computer programmer tenant on the
grounds that their office is also their home would likely prove
unsuccessful. In fact, one might be surprised at what uses are acceptable
under the San Francisco Planning Department’s zoning laws for “RH”
(Residential House) or “RM” (Residential Mixed) districts. Residential
care facilities, child care centers, and even group housing are uses
“permitted as of right” in those zones.
In
this particular case, the landlord has a belief that the tenant is using the
apartment for some sort of business, the landlord indicated to the tenant
her suspicions, but the tenant claims otherwise. Whether the tenant is
being honest or not, the landlord is clearly on notice and should take some
action in order to prevent the tenant from later claiming that the landlord
knew about the business and allowed it to continue, thus waiving her rights
to prohibit the commercial use under the lease. This is a consistent
struggle landlords face: suspicion that there is something going on,
but waiting to make sure they have enough information to be successful in an
eviction…wait too long, and the tenant might successfully argue that the
landlord has waived their right.
The
landlord should look for signs of “commercial use” above and beyond mere “tele-commuting.”
Are there clients or employees coming into the building? Are there
multiple daily deliveries from UPS or Fed Ex? Arguably, this escalates a
mere “home-office” into a more commercial venture, and thus would be
prohibited under the SFAA lease and possibly planning codes. If the
particular tenant isn’t being forthcoming about his use of the apartment,
ask other tenants in the building if they have any information about a
business being run from the apartment. The landlord may want to even
hire a licensed private investigator to do some sleuthing.
Once the landlord has collected the information, they should contact
their attorney in order to determine whether there have enough probable
cause to serve a “Three Day Notice to Perform Covenants or Quit” based on
the tenant’s use of the apartment for his business. This Notice would
inform the tenant that he must stop his commercial use within three days or,
in the alternative, surrender possession of the apartment. If the
tenant fails to do either, the landlord would then file an unlawful detainer
action in court. The court case would hinge on the landlord proving that the
tenant breached the lease by using the apartment for commercial use, and
also failed to correct the violation within the three-day period after
receiving the Notice.
Marina Franco
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