San Francisco Looks Askance at Exhorbitant Rent Increases

Although single-family homes and condominiums built after 1979 may be exempt from rent-control (see San Francisco rent ordinance 37.2(r)(7)), they are covered by the just cause eviction ordinance (sec. 37.9) which provides several enumerated reasons to evict a tenant.

To thwart just cause and stimulate a tenant to move, landlords sometimes raised the rent to exorbitant rates, since, under state law, there is no cap on residential rental rates. But no more! Beginning February 25, 2019, an amendment to San Francisco rent ordinance sections 37.10A and 37.10B, makes this activity illegal as follows:

Sec. 37.10(A)(i): “It shall be unlawful for a landlord to endeavor to recover possession of a rental unit as defined in Sec. 37.2(r)(7) by means of a rent increase that is imposed in bad faith with an intent to defraud, intimidate, or coerce the tenant into vacating the rental unit in circumvention of Section 37.9(a), 37.9(A), 37.9(B), or 37.9(C). Evidence of bad faith may include but is not limited to the following:

1) The rent increase was substantially in excess of market rates for comparable units;

2) The rent increase was within six months after an attempt to recover possession of the unit; and

3) Such other factors as a court or the Rent Board may deem relevant.”

As guided by Sec. 37.10B(a)(5), “No landlord, and no agent, contractor, subcontractor or employee of the landlord, shall do any of the following in bad faith or with ulterior motive or without honest intent:"

"Influence or attempt to influence a tenant to vacate a rental housing unit through fraud, intimidation or coercion; for example and without limitation, by endeavoring to recover possession of a rental unit as defined in Section 37.2(r)(7) by means of a rent increase that is imposed with an intent to defraud, intimidate, or coerce the tenant into vacating the rental unit in circumvention of Section 37.9(a), 27.9A, 37.9B, or 37.9C, in which case evidence of bad faith may include but is not limited to the following:

1) The rent increase was substantially in excess of market rates for comparable units;

2) The rent increase was within six months after an attempt to recover possession of the unit; and

3) Such other factors as a court or the Rent Board may deem relevant.”

Section 37.10A is entitled the “Misdemeanors, and Other Enforcement Provisions,” while Section 27.10B is called the “Tenant Harassment” ordinance.

If you rent an apartment in San Francisco that is exempt from rent control but covered by San Francisco's just cause eviction ordinance, and if you received an excessive rent increase, keep this information in mind. You may have a legal basis to contest the rent increase if the rent increase was done in bad faith.