Introduction to San Francisco Residential Leases
Rental agreements are a critical part of any real estate rental contract process. Also termed rent contracts, lease agreements, lease contracts, or tenancy agreements, these contracts are usually about 3-5 pages long. The amount of legal jargon and implications of not understanding an agreement can be overwhelming and frightening to someone who has never seen one before.
As a San Francisco tenant, it is important for you to understand what a rental agreement is, why they are so important to both tenants and landlords, and how they are different from lease agreements elsewhere.
Many landlords use "lease agreement" interchangeably with "rental agreement." While they mean the essentially the same thing, San Francisco law states that a warranty of habitability exists for 30 days, whereas a fixed-term rental or lease is for 12 months or longer. Both types of agreements have their own unique consequences when you try to break them before the specified end date of the contract, but with a lease agreement, you are typically at the mercy of your landlord when you try to leave early.
Rental agreements, on the other hand, are popular amongst landlords because they allow for the freedom of turning over property quickly . Because tenants can easily leave these types of agreements within 30 days, landlords can fill spaces quickly, without having to negotiate a long-term agreement. However, that means that the rent you are paying is larger because a landlord is not guaranteed that you will be a long-term tenant.
San Francisco tenants also enjoy on-demand rental agreements because they know that they only pay for 30 days of rent at a time. If you have a rental agreement and plan on extending it, keep in mind that it does not automatically extend. Before the end of your initial period, let your landlord know that you plan on extending your rental agreement for another 30 days. As long as your landlord agrees and no changes have been made to the agreement, there are no issues.
You also have the ability to upgrade your rental agreement through a written request. You may have an oral rental agreement, but a written one is often preferred in case you need to return to it for any reason. You may choose to save money by moving to a rental agreement to avoid large upfront costs or to upgrade to a fixed-term rental/lease. Make sure to only sign an updated rental agreement after you have read all of the terms.
Requirements of a San Francisco Lease
A lease, known as a rental agreement in San Francisco, is the contract between a landlord and a tenant. When you, as a tenant, sign a rental agreement you agree to pay your landlord rent for use and occupancy of the unit. Unless you and the landlord have negotiated a specific term of rental, rental agreements are month-to-month agreements. The agreement obligates you to pay your rent in a timely manner, to keep your unit in good condition (including properly disposing of garbage and keeping fixtures free of dirt and grease), to obey reasonable housing rules, and to provide access to your unit for repairs, among other duties. You typically have the right to quiet enjoyment of the unit that includes the right to privacy. In other words, the landlord cannot unlawfully enter your unit without your permission and must obtain your consent before entering the unit in many circumstances. Excluding the terms that are implied by law (e.g., tenant’s duty to pay rent and to use the unit like a reasonable person, and the landlord’s duty to provide habitable premises) and any promises made by the landlord that are not in writing, a rental agreement should contain the following essential elements:
Rent. The landlord and tenant must agree on the amount of rent and the date on which it is due. Rent is due on that date every month, regardless of whether it is a weekday or weekend. Lease term. The rental agreement will specify whether it is a lease for a specific duration or a month-to-month rental agreement. If it is for a specific duration, which is known as a "term lease," the landlord and tenant must agree on the term length and the date on which the lease ends. If no term is specified in the rental agreement, it is a month-to-month rental agreement. A month-to-month rental agreement means, among other things, that the tenant can end the rental agreement by giving notice of the intent to leave 30 days prior to the end of the month in which he or she wants to leave. A lease for a fixed term can only be broken after the term is over unless the landlord agrees otherwise or unless there is a legal reason to terminate the lease early (such as breach of the lease terms by the landlord or tenant).
Security deposits. The rental agreement will specify how much the tenant must pay as a security deposit and how that deposit will be used. In San Francisco, a security deposit can be used only to reimburse the landlord for costs incurred as a result of the tenant’s default in the performance of the rental agreement and to compensate the landlord for certain damages and for unpaid rent. The amount of the security deposit and how it is used is also heavily governed by the San Francisco Rent Ordinance. The landlord must pay back to the tenant any portion of a security deposit not used within 21 days after the end of the tenancy. Upon your entering into a rental agreement, it is a good idea to keep photographic records of the condition of your unit and of the interior of any appliances provided by the landlord.
Rights of the Tenant and Owner
Understanding the rights and responsibilities of both parties is crucial when entering into a rental agreement in San Francisco. For instance, tenants have the right to a habitable living environment, which mandates that all necessary repairs are undertaken by their landlords. Conversely, they are responsible for keeping the property in good condition and reporting any damages or safety hazards promptly to their landlords, since landlords generally are not responsible for wear and tear resulting from reasonable use of the apartment once notified.
Another common issue between landlords and tenants can arise in the context of last-month’s rent. For most residential tenants, last-month’s rent may be paid together with the deposit, but it can also be accounted for as part of the lease payment. For example, if a tenant plans to leave in six months and wants to pay last-month’s rent, the landlord may rent out the property at a higher price immediately after the tenant leaves. This means that the landlord could claim the last-month’s rent as payment for the last month’s rent only after the tenant vacates the unit. For tenants who paid the last month’s rent in one go upon signing the rental agreement but who leave the unit within the first month of occupancy, landlords have the right to keep this amount and deduct it from the deposit or claim payment from the tenant directly. By contrast, tenants who paid their rent monthly generally do not have a legal basis to deduct the last-month’s rent from the deposit.
Rent Control and Rent Stabilization Policies
San Francisco has several laws that limit the amounts of rent that a landlord may charge. The largest and most significant law is the San Francisco Rent Ordinance (also known as the "rent control" ordinance). This law provides detailed protections for any tenant who rented an apartment or home in San Francisco prior to June 13, 1979, and for tenants who have moved into a unit after that date, regarding a variety of terms of the rental agreement. For example, these laws limit the amount of rent that can be charged each year, and they provide for extra protection against so-called "no cause" evictions, whereby the tenant is asked to vacate the unit even though he or she is not doing anything wrong. There are also certain provisions in the Rent Ordinance for those living in single-room-occupancy hotels and occupancy agreements, which are controlled by the San Francisco Hotel Conversion Ordinance, and certain units, such as those with a rent of more than $5,000 per month, as well as certain cooperative apartments, where full rent control does not apply.
A lesser known, but still quite significant, law that affects some rental agreements is the San Francisco Residential Rent Stabilization Ordinance. This law provides for similar protections as the Rent Ordinance, but applies to tenants of units that were built prior to February 1, 1983. These rules are less onerous than the Rent Ordinance rules.
Finally, the San Francisco local law that applies to residential properties that were built after February 2003 is known as the San Francisco Apartment Conversion Ordinance. This law basically provides that, as part of a rent control or residential rent stabilization rules, or as a form of anticipated rent control, some new properties may have restrictions on the type and amount of rent that may be charged and the circumstances under which the tenants can be asked to leave.
Pet Policies and Prohibitions
As part of their lease terms, landlords in San Francisco often require tenants to pay a pet deposit and abide by other more stringent rules regarding pets. The most common practices include charging a pet deposit and allowing pets only if a separate and more expensive pet agreement is signed.
San Francisco does not have a comprehensive lease book or law pertaining to all residential rental properties. However, in general, under California law, landlords may require a tenant to pay a reasonable pet deposit and charge a higher rent, with the additional fees going toward damages caused by the pet or for the additional space the tenant is using.
San Francisco law does not require landlords to post their pet policy in their leases, but most do. Pet policies are often found at the back of the lease in an addendum, but if it’s missing, check the front of the lease directly under the signature line. Renters should not assume they can keep a pet regardless of the absence of a pet policy in their lease agreements. Make sure that your landlord allows pets and review the policy when you have an opportunity.
While there are minimal laws regarding pets and pet deposits , a number of people and government agencies in California informally encourage certain practices, such as limiting pets to those weighing less than 25 pounds and prohibiting "fighting breeds," which permits a landlord to limit pets to a few common breeds such as pit bulls or Rottweilers.
As long as the pet policy meets the requirements of the law, they can be enforced without any limits. A disliked neighbor may complain to the housing authority or landlord about noise, but to complain successfully, they must document their claims and provide corroborating testimony (witnesses).
It is up to you, the tenant, to manage your pet so as to remain in compliance with the terms of your lease. If you fail to do so, the landlord could have grounds to evict you. If a complaint is made against your pet, give your landlord a chance to investigate the claims before trying to get them to go away. Some cities will write up a nuisance complaint through an ordinance violation. If you comply with rent payment and pet policies, you should not have to worry about your dog making too much noise.
Security Deposits and Conditions for Return
In San Francisco, security deposits are governed by the San Francisco Police Code, Sections 37.1-37.3. This law applies to landlords and tenants of all residential units in San Francisco, and its provisions regarding security deposits are in addition to any business license requirements relating to security deposits found in the San Francisco Business & Tax Regulations Code, Article 29, which are enforced by the Office of the Treasurer and Tax Collector.
A landlord may request a maximum of two months’ rent as a security deposit for residential tenancy. OR there may be a three month rent security deposit for a furnished rental. Additionally, in units where tenants are not required to pay a broker’s commission, the landlord can ask for additional, non-refundable fee of up to 25% of the monthly rent for administrative costs of processing the tenancy. A property owner may ask for payment of the first month’s rent and/or last month’s rent in advance; that amount is not included in the two month security deposit ceiling.
Keep copies of security deposit receipts. Landlords must provide copies of all security deposit receipts to the tenants and keep copies of all receipts and acknowledgements for three (3) years. The law requires that each security deposit receipt be signed by the tenant and it must contain the following:
At the end of a tenancy, the landlord must provide the tenants with an itemized accounting of any deductions made from the security deposit. This accounting must include receipts or invoices verifying the cost of any cleaning, repairs or replacement, as well as the dates when the property was vacated and the date when the notice was delivered. Tenants can sue if the conditions for the return of the security deposit or itemization of charges are violated.
If the unit meets the requirements outlined by Civil Code §1950.5(a)(1)-(4) no deductions may be taken by the landlord for:
In the above circumstances, the tenant is entitled to full return of the deposit including interest. Tenants can also use the deposit in lieu of last month’s rent. If a tenant uses the security deposit instead of paying last month’s rent, the tenant must provide written notice to the property owner, landlord, manager or agent that the security deposit is being used in lieu of last month’s rent. Beyond these conditions, deductions may be made to cover
A security deposit is not intended to be an additional month’s rent. If you do not spend a reasonable amount of time cleaning up after yourself, do not expect your landlord to use your deposit to compensate for your mess. Make sure to put things back where you found them, don’t put holes in the wall to hang things, and don’t expect a tip for leaving the place reasonably clean. Do not spend more than 2-3 hours on a "deep" clean of your own apartment, and do it yourself so that costs aren’t charged to you.
If the apartment was not professionally cleaned on a regular basis, the landlord can not hire a cleaner and charge you for it. Unless they are willing to provide details the company has to show to a judge regarding the cleaning, and the price breakdown, the landlord must use the cleaning service they used on the apartment to clean the unit, and can not charge you for the cost, unless you did such a poor job cleaning that they have to hire a company to come in after you left.
A landlord is not allowed to charge "normal wear and tear" as a deduction against the security deposit. If your dog is large and the apartment had carpet, expect to receive a bill for replacement of the carpet. If you paid the last month’s rent with the deposit you cannot have the deposit returned while you still owe the rent.
How to Resolve a Dispute under a Lease
San Francisco’s rent board operates as a consumer protection agency to make sure that the city’s rent control tenants have the tools they need to either enforce or comply with their rights and obligations under their lease agreements and under the law.
All eviction actions must be heard and decided in San Francisco by the Rent Board’s administrative law judges. These judges have extensive knowledge and experience in the area of rent control and related issues in regard to rent-controlled properties. They are the final authority on almost every potential landlord-tenant dispute in San Francisco. This is where in the long run, if the landlord and tenant can’t agree to a voluntary resolution, the Rule 7-5 failure to pay rent and unlawful detainer suits will get resolved.
While you can appeal an unfair decision to an outside judge by appealing the decision to a superior court, in reality it is most often economic suicide to drag it out for those additional 3-12 months through the appellate courts. Why? Because the 50% to 100% rent increase that the tenant faced because they didn’t move quickly enough will cost at least an additional $5000 – $20,000+ in attorney’s fees when all is said and done.
Any nuisances or other issues can be remedied by timely and proper notice under San Francisco Rent Ordinance Chapter 37 Section 37.9(a). First, the landlord must give notice of the alleged breach. The tenant then has 14 days to cure the breach through payment or corrective efforts. If the tenant fails to do so, this is a first written notice to terminate the tenancy. This notice gives the tenant 30 days to vacate or be either sued, or just removed by the Sheriff with a new unlawful detainer suit action.
You should afford the tenant one more notice to cure that includes the removal date. The landlord should wait for the tenant to cure the breach if the tenant could correct the nuisance with a little effort or funds. If immediate eviction is desired, however, the landlord needs to give the tenant a final removal notice with the latest date that the landlord will accept a continuing rent payment or provide for the provision of repairs to the unit. Failure to vacate by this final deadline will result in the filing of an eviction lawsuit with the Rent Board.
Altering or Terminating a Rental Agreement
For a rental agreement to be enforceable, it must comply with any requirement imposed by law (Civil Code § 1654). Without the proper notice required by the Rent Ordinance, a rental agreement is voidable. The Rent Board recognizes three types of transactions as Covered Tenancies: (1) new tenancies commencing after January 9, 1979, where the landlord and tenant are in privity of contract, (2) tenancies in which the landlord collects the rent from the tenant, and (3) rent-controlled tenancies in which the landlord and tenant have privity of contract. Modifications that extend the term of the tenancy, decrease the amount of rent payable, increase the privileges or rights that were part of the original agreement, or reduce any obligations are generally enforceable (if the tenant agrees). However, if the term of the rental agreement is extended, the consideration must be at least sufficient to prevent the tenant from vacating. This prevents a tenant from extending their rental agreement for a nominal fee, at which time they would leave and be free of the obligations under the rental agreement .
Because rental agreements can be renewed indefinitely, a rental agreement that is negotiated, executed, and takes effect is frozen and cannot be modified unless (1) all parties to the agreement consent or (2) there is a provision in the original agreement authorizing modification. Once a tenancy has been established and a rental agreement has been entered into, all modifications must be made by amendment to the original agreement. A landlord and tenant may agree to a rental agreement that automatically renews for fixed terms. Each renewal establishes a new rental agreement that is not automatically contiguous to the prior agreement. Neither a landlord nor tenant can unilaterally terminate a rental agreement. The provisions of a rental agreement establishing the duration of a lease or month-to-month tenancy cannot be altered except by the mutual agreement of all parties to the agreement. Thus, a landlord in a month-to-month tenancy must give advance written notice equal to the term of the rental agreement in order to terminate the tenancy or increase the rent. Landlords who desire to terminate tenancies and/or increase rent must comply with Rent Board regulations as well as California law.