Buyout, OMI or Ellis act?

[Tob Siripak]

I recently bought a triplex in San Francisco. There's 1 section8 tenant living in a studio, a family in the 2 bedroom unit. The vacant unit is big studio. This family is a protected tenant. I'm not sure if I should pursue buyout or OMI or Ellis act with the whole unit. I have no idea on how much the buyout would cost. 

- Since I have an empty unit now is it possible to do the buyout?

-Which one would be worth it for a long run?

Ellis act seems to be a big decision for me to have to take it out of the market for a certain amount of time. But I'm not sure if the tenant can request whatever amount they want for the buyout? 

Would love to hear any suggestions or experiences anyone has had with evictions here in SF. Thank you very much.

[Kam T.]

Ellis act is always the nuclear bomb option, i.e. last resort (given how extreme the re-rental restrictions, and the binding and recorded nature of it once you file). And since you already have one unit vacant, and a section 8 tenant (which is not under the same rent control rules as SF, as far as I know) Ellis Act in this case would be a textbook example of throwing the baby out with the bathwater (unless your plans for the property don't include re-renting any time soon or a recorded Ellis Act eviction won't affect the building's value for your strategy).

I don't know the buyout rules in SF (only Oakland) and how a vacant unit affects your ability to do a buyout, but I'd be surprised if that matters for a buyout in SF since buyouts are mutually agreed.

However, OMI on the other hand likely has some restrictions if you have a similar vacant unit (which could likely be argued against given the unit you want is a 2 bedroom vs the vacant studio).

My advice is to read the SF tenant protection ordinance, the OMI ordinance, the buyout ordinance (they process is regulated), and the Ellis Act law and ordinance to get some clarity for yourself. Only after you've done that talk to an attorney for what will be cheap insurance. After you've read those things you'll have an opinion about best path forward, and you'll spend less time with and have better questions for an attorney. Without reading for yourself it's hard to truly wrap one's head around rent control and tenant protections and the related processes and restrictions. Only after you've done all of that would I suggest approaching the tenant about a buyout. Just my $.02 of course.