37.9F Circumvention of Tenant Protections

[Added by Ord. No. 78-20, affective June 22, 2020]

(a) Findings.  As market rents continue to increase in San Francisco, landlords of rent-controlled units have a greater incentive to prevent long-term tenancies. Complementing the just cause protections in Section 37.9, this Section 37.9F addresses the growing efforts among some landlords to induce their tenants into believing that they are required to vacate their units at a specific time designated in the lease or agreement, despite existing law to the contrary, or to try to avoid certain landlord-tenant obligations altogether. This trend is especially common with respect to corporate rentals, though it is not limited to corporate rentals. Such tactics by landlords undermine rent control and frustrate the purpose of ensuring that rent-controlled units in the City remain available as a long-term housing option for the City’s renters.

(b) Prohibition of Fixed-Term Agreements.  Consistent with Section 37.9(a)(2) and Section 37.9(e), any provision of any lease or rental agreement that purports to require a tenant to vacate a rental unit at the expiration of a stated term, or that purports to characterize a tenant’s failure to vacate the rental unit at the end of the stated term as a just cause for eviction (either of them, a “Fixed-Term Agreement”), shall be void as contrary to public policy, and a landlord may not attempt to recover possession of the unit without just cause. This prohibition shall not apply where this Chapter 37 expressly authorizes a fixed-term tenancy (e.g., Section 37.2(a)(D)), or where it expressly authorizes a tenant to be evicted without just cause (e.g., Section 37.9(b)).

(c) Restrictions on Non-Tenant Uses.

(1) A rental unit is being used for a “Non-Tenant Use” when the landlord is allowing the unit to be occupied by a person or entity who is not a “tenant” as defined in Section 37.2(t). Renting a unit to a corporate entity or other non-natural person, or using a unit as housing for one’s employees, licensees, or independent contractors rather than one’s tenants, are nonexclusive examples of Non-Tenant Uses. This subsection (c) is not intended to narrow the definition of “tenant” under Section 37.2(t) or to limit the just cause protections in Section 37.9; the sole intent is to prevent landlords from circumventing or undermining the tenant protections of this Chapter 37, by restricting when a landlord may provide a rental unit to a person or entity to the extent that person or entity does not otherwise qualify as a “tenant.”

(2) Commencing April 1, 2020, it shall be unlawful to use a rental unit or allow a rental unit to be used for a Non-Tenant Use, subject to the exemptions listed in subsection (c)(3). Any provision of any agreement entered into on or after April 1, 2020 that purports to allow a unit to be used for an unauthorized Non-Tenant Use shall be void as contrary to public policy, and the occupants shall instead be deemed tenants under Section 37.2(t).

(3) This subsection (c) does not apply to any of the following:

(A) where the rental unit is subject to an agreement authorizing a Non-Tenant Use that was entered into before April 1, 2020, for the existing duration of that agreement.

(B) the use of a rental unit as a lawful short-term rental as set forth in Administrative Code Chapter 41A.

(C) where the landlord is providing the rental unit to its employees as a condition of their employment to assist in the maintenance or management of a building owned or managed by the landlord (e.g., resident managers).

(D) where an organization with tax-exempt status under 26 United States Code Section 501(c)(3) is providing access to the unit in furtherance of its primary mission to provide housing, or in furtherance of its primary mission of education by providing housing to teachers.

(d) Required Disclosures.  Commencing April 1, 2020, every online listing for a rental unit, excluding listings by landlords or master tenants who will reside in the same rental unit as their tenants or subtenants, must contain a legible disclosure in at least 12-point font that includes the following text: “This unit is a rental unit subject to the San Francisco Rent Ordinance, which limits evictions without just cause, and which states that any waiver by a tenant of their rights under the Rent Ordinance is void as contrary to public policy.” The foregoing text should also be included in print advertisements, if practicable.

(e) Monitoring and Enforcement.

(1) The Board shall receive referrals regarding online listings that do not comply with subsection (d). Upon receipt of a referral, if the Board determines that the listing does not substantially comply with subsection (d) and that the defects have not been cured, the Board shall inform the landlord in writing. The landlord shall be required to correct the violation within three business days after receiving the notice. If the landlord has not corrected the violation within three business days, the Board may impose a reasonable administrative penalty of up to $100 per day, not counting the three-day correction period, provided that in no event shall the total administrative penalty for a single listing exceed $1,000. The procedure for the imposition, enforcement, collection, and administrative review of the administrative penalty shall be governed by Administrative Code Chapter 100, “Procedures Governing the Imposition of Administrative Fines,” which is hereby incorporated in its entirety. Any administrative penalties collected under this subsection (e)(1) shall be deposited in the General Fund of the City and County of San Francisco to be used for enforcement of this Section 37.9F.

(2) The City Attorney may bring a civil action in San Francisco Superior Court against a party who has failed to comply with this Section 37.9F. A nonprofit organization with tax exempt status under 26 United States Code Section 501(c)(3) or 501(c)(4) and with a primary mission of protecting the rights of tenants in San Francisco may also bring such a civil action, provided that the organization shall first provide 30 days’ written notice of its intent to initiate civil proceedings by serving a draft complaint on the City Attorney’s Office and on any known address(es) of the affected tenant(s), and may not initiate civil proceedings until the end of this 30 day period. A party who violates this Section 37.9F may be liable for civil penalties of not more than two times the amount paid or received for use of the rental unit during the period of the unlawful activity, and each rental unit used in violation of this Section 37.9F shall constitute a separate violation. Any monetary award obtained in such a civil action shall be deposited in the General Fund of the City and County of San Francisco to be used for enforcement of this Section 37.9F. The court shall also award reasonable attorney's fees and costs to the City Attorney or a nonprofit organization that is the prevailing party in such a civil action.

(3) The remedies available under this subsection (e) shall be in addition to any other existing remedies that may be available.