Just Cause for Eviction

The termination clause of the tenancy agreement states that after the expiration of the original term of the lease, the owner may terminate the tenancy in accordance with applicable law. What conditions have to exist in order to enforce this provision?

In San Francisco, this clause is not enforceable if the unit is rent controlled. Owners must understand that rent laws in San Francisco, Oakland, Berkeley, Santa Monica, and several other jurisdictions around the state consist of two very distinct yet interrelated components. The first prong is the rent increase limitation aspect, which governs the dollar amount that rent on existing tenancies may be increased every year. In San Francisco, rent can only be increased by the annual allowable limit, which is determined by the cost of living increase, or inflation index, for the region (this year allows for a 1.2% raise). Owners can also seek, by petitioning the Rent Board, additional amounts for capital improvement work, operating and maintenance increases, and utility bills with excess charges.

The second prong is known as eviction control. Eviction control limits the reasons for terminating a tenancy. Lease expiration is not one of the enumerated grounds. Rather, the rent law clearly defines the permissible reasons. The most common “just causes” are nonpayment of rent, breach of lease covenants, owner/relative move-in, and commission of nuisance activities. If an owner could terminate a tenancy once the lease expired, or when the building was sold, rent control would have no teeth, as all long-term tenants could be displaced very easily. Thus, there would be no need for the litigation and political activism that our industry vigorously pursues.

Owners often ask how the rent law can supersede a lease agreement, which is a private contract between two consenting parties. Indeed, people often wonder why a landlord and tenant cannot voluntarily and mutually agree on a termination date and thereby “contract around” the Rent Ordinance. The answer is that rent control does automatically vitiate any component of an agreement that circumvents the rent laws, and the courts have held that a local rent law is superior to what the parties contract to in the lease. The reason for these decisions is that rent control is akin to an unwaivable consumer rights law, and residential tenants are deemed to be in an inferior position to owners and therefore in need of the government’s protection. Our rent law even states that a tenant’s agreement to waive rights under the Ordinance is void for being against public policy. So please accept the notion that your lease agreements cannot contract around the rent limitation and eviction control provisions of the Rent Ordinance, and until there is a major change in state law, this will be the reality of residential landlord-tenant relationships for rent-controlled housing.

Dave Wasserman