New Ordinance Amendments re “Non-Tenant” Occupancy of Rental Units and Disclosure Requirements for Rental Advertisements

The Board of Supervisors recently passed legislation enacting Rent Ordinance Section 37.9F, which takes effect on June 22, 2020. A full copy of the legislation (which also amended the San Francisco Planning Code) is available here [Ord No. 78-20]. A summary of newly enacted Rent Ordinance Section 37.9F, titled “Circumvention of Tenant Protections”, is provided below.

  • Ordinance Section 37.9F(b) restates existing law that any agreement that requires a tenant to vacate a rental unit at the expiration of a fixed term is void as contrary to public policy, unless an existing just-cause exception applies (for example, where the landlord resides in the same rental unit as the tenant). 
  • Ordinance Section 37.9F(c) regulates “non-tenant uses” by limiting when landlords can allow their units to be occupied by persons or entities who are not tenants. Renting a rental unit to a corporate entity or other non-natural person for any purpose, or using a rental unit as housing for one’s employees or “licensees,” are examples of prohibited “non-tenant uses”. Commencing April 1, 2020, it is unlawful to use a rental unit for a non-tenant use, and any such “non-tenants” are instead deemed “tenants” for the purpose of the eviction protections in the Rent Ordinance. However, the prohibition on non-tenant uses does not apply in the following circumstances:
  1. if the landlord entered into a contract before April 1, 2020 that specifically authorized the non-tenant use; 
  2. if the rental unit is being used as a lawful short-term rental under Administrative Code Chapter 41A; 
  1. if the landlord is using the unit to house an employee in charge or maintaining or managing the building (i.e. a resident manager); or 
  1. if the rental unit is operated by a non-profit that provides housing as part of their primary mission or to teachers as a condition of their employment.
  • Ordinance Section 37.9F(d) requires landlords to include a written disclosure in all online listings for residential rental units, excluding listings by landlords or master tenants who will reside in the same rental unit as their tenants or subtenants. The disclosure, which is also required in print advertising (if practicable) must be in 12-point font or larger and state the following:

“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.” 

  • Ordinance Section 37.9F(e) states that the Rent Board may receive referrals regarding online listings that do not contain the above disclosure. If the Rent Board determines that the listing does not substantially comply with the legal requirements and the landlord has not corrected the defect, the Rent Board will attempt to inform the landlord in writing. The landlord must correct the violation within three business days after receiving the notice. If the landlord does not correct the violation within three business days, the Rent Board may impose a reasonable administrative penalty on the landlord of up to $100.00 per day, not counting the three-day correction period, and not to exceed $1,000.00 per listing. 

Ordinance Section 37.9F(e) also authorizes the City Attorney or a non-profit tenants’ rights organization to sue for civil penalties.