Do I need a just cause to give notice to tenant?

Oakland, California
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Do I need a just cause to give notice to tenant?

Simon Stahl
Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes

I am looking around to buy a property in or around Oakland, CA and was wondering if it is worth looking at the ones that are tenant occupied. I know Oakland is very renter friendly and you need a just cause to evict someone. I am a bit unsure though if eviction is the same as giving notice. 

If I buy a property that is tenant occupied, can I give notice to him/her without just cause? I would want to rehab the property and then either sell it or rent for a market prize. 

One more question: does it make a difference if the tenant is section 8 or not?

Thanks

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DG A.
San Francisco Bay Area · Member since 2015 · 196 posts · 181 votes
10y

I think it's totally worth it!

Unfortunately, you cannot just "give notice" to someone in Oakland... Unless you live IN the building as your personal residence, and it's divided into 3 or fewer units.

You could however give the tenant notice that you intend to move in. That would be considered a just cause reason to evict. The tricky part there, is if you follow through with an owner move in eviction, you are required to live in the property for a minimum of 3 years. 

You should consider reading the just cause for eviction ordinance from top to bottom. It's really worth the investment! It takes about 3 hours, but you'll be light years ahead of other investors trying to find value in tenant occupied properties. 

Here's the PDF of the Just Cause ordinance: www2.oaklandnet.com/w/OAK036393

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  • DG A.
    San Francisco Bay Area · Member since 2015 · 196 posts · 181 votes
    10y

    I think it's totally worth it!

    Unfortunately, you cannot just "give notice" to someone in Oakland... Unless you live IN the building as your personal residence, and it's divided into 3 or fewer units.

    You could however give the tenant notice that you intend to move in. That would be considered a just cause reason to evict. The tricky part there, is if you follow through with an owner move in eviction, you are required to live in the property for a minimum of 3 years. 

    You should consider reading the just cause for eviction ordinance from top to bottom. It's really worth the investment! It takes about 3 hours, but you'll be light years ahead of other investors trying to find value in tenant occupied properties. 

    Here's the PDF of the Just Cause ordinance: www2.oaklandnet.com/w/OAK036393

    8Reply
  • Simon Stahl
    OP
    Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
    10y

    Thanks @DG A.. Guess I know what i'll be doing this weekend ;-)

    0Reply
  • Ronan M.Pro Member
    Rental Property Investor · Chicago, IL · Member since 2015 · 352 posts · 281 votes
    10y

    Just let their lease expire.  Then their is no cause and no eviction. Their lease expires and they have to move on. 

    1Reply
  • Simon Stahl
    OP
    Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
    10y

    @Ronan M. how does that work if they are month to month? I think usually you have a one year lease and after that it switches to month to month. 

    0Reply
  • DG A.
    San Francisco Bay Area · Member since 2015 · 196 posts · 181 votes
    10y

    Just to be clear, in Oakland CA, we have REALLY strict rent control laws. 

    A lease expiring does not mean the tenant has to move out. There are only 11 reasons you can get a tenant out of your property in Oakland. If it's not one of the 11 reasons listed in the ordinance, then that tenant is with you for life, or until they move. #ThatsOakland

    A landlord can evict a tenant for the following reasons:

    1. Failure to pay rent;
    2. Breach of lease terms;
    3. Failure to sign a lease extension or renewal that contains materially the same terms as the current lease terms;
    4. Willful substantial damage to the unit;
    5. Disorderly destruction of peace and quiet of other tenants;
    6. Use of unit for illegal purpose;
    7. Denial of legal access to unit to the landlord, after written notice to cease;
    8. Owner seeks in good faith to recover possession of the rental unit for her occupancy as a principal residence, where she has previously occupied the unit as her principal residence and has the right to recover possession for her occupancy as a principal residence under a written rental agreement with the current tenants.
    9. Owner seeks in good faith to recover possession for her own use and occupancy as her principal residence, or for the use and occupancy as a principal residence for her spouse, domestic partner, child, parent, or grandparent.
    10. Necessary substantial repairs, for a three month temporary relocation; or
    11. Owner seeks to remove the property from the rental market as an Ellic Act eviction.

    =====> http://hooshmandlawgroup.com/oakland-just-cause-for-eviction-ordinance-specifies-reasons-a-landlord-may-legally-evict-a-tenant/

    7Reply
  • DG A.
    San Francisco Bay Area · Member since 2015 · 196 posts · 181 votes
    10y

    CC: @Ronan M. ^

    0Reply
  • Ronan M.Pro Member
    Rental Property Investor · Chicago, IL · Member since 2015 · 352 posts · 281 votes
    10y

    @DG A.

    So if a new owner comes in and wants to upgrade the property and do an extensive remodel he is prevented from doing so ?   Seems odd to me... but I am not an expert in CA law.

    Most states require sufficient notice (30 to 60 days) to end a MTM tenancy and no reason is required. But in the case of @Simon Stahl he stated he wants to remodel so in fact he has a valid reason although he is not required to have one.

    I won't dispute what you have said as I am sure as a CA guy you know your laws better than me. But it seems strange that noting short of a tenants death can prevent you from recovering your property to for example - move in yourself/do a gut remodel/move your elderly mom in.....etc etc

    Who would buy Oakland rental property if the first time you rent it, you may never get possession of it again if your first tenant so wishes ?  

    0Reply
  • DG A.
    San Francisco Bay Area · Member since 2015 · 196 posts · 181 votes
    10y

    You actually can do a major renovation, but you can only evict them temporarily for three months.

    Kind of crazy I know.

    From there you can actually raise the rent temporarily to pass on the cost of the renovation to that tenant.

    But you can only pass on 70% of the cost and the rent increase has a specific start date and end date after the cost has been paid.

    All these tricky rules are why I am only buying properties three units and smaller in Oakland. That way I'm not subject to the just cause ordinance for eviction or the rent Control ordinance .

    0Reply
  • Ronan M.Pro Member
    Rental Property Investor · Chicago, IL · Member since 2015 · 352 posts · 281 votes
    10y

    And I thought Chicago landlord/tenant laws were bad !!

    1Reply
  • Simon Stahl
    OP
    Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
    10y

    @DG A. wait, so that means this only applies for 4-plexes and above? What about SFR and duplexes?

    0Reply
  • DG A.
    San Francisco Bay Area · Member since 2015 · 196 posts · 181 votes
    10y

    Better said, 3 units and below, are exempt from the just cause to evict ordinance. It does not apply at all from the day you move into a property 3 units or below, and establish it as your principle residence. If you buy a fully occupied triplex for example, and are trying to move in, it DOES apply to you. The ordinance stops applying to you the day you move in and establish the building as your primary residence. 

    For the rent control ordinance, you have to live in the property (3 units and below), but you are not exempt from that until after 1 year of living in the building as your primary residence. 

    For buildings 4 units and bigger, in Oakland, they are not exempt and both ordinances apply to them ALWAYS. 

    2Reply
  • Simon Stahl
    OP
    Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
    10y

    I am unsure if I understand that correct. For a 3 unit or below property, If I want to give notice to the tenant because I want to rehab and resell or rehab and rent for market price (no just cause - I do not intend to move in), can I do that?

    0Reply
  • Steven Torrez
    Real Estate Investor · Salem, OR · Member since 2015 · 60 posts · 16 votes
    10y

    couldn't you offer cash for keys? 

    0Reply
  • DG A.
    San Francisco Bay Area · Member since 2015 · 196 posts · 181 votes
    10y

    Nope, you can't @Simon. You HAVE to move in to get the exemptions.

    Otherwise,  cash for keys is 7your best bet. I hear 5k - 10k is what it takes to get people to move "voluntarily."

    0Reply
  • Matthew A.
    New Haven, CT · Member since 2016 · 90 posts · 99 votes
    10y

    Want someone out of the house?

    Makes me think of the movie "dirty work" where they try to put fish inside of the walls to get people to leave LOL

    https://www.youtube.com/watch?v=OG9EDE_bnws

    but seriously, cash for keys I guess.

    Sucks, you can't even give someone a 60 day notice to leave. Seems like a market I would never want to enter.

    Matt

    0Reply
  • Simon Stahl
    OP
    Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
    10y

    Thanks everyone. Cash for keys sounds really risky to me. At the end I own a house that is rented for way below market price and a tenant that does not want to leave for any cash I can offer...

    I think I'll only consider vacant properties for now. At least until I know more about the rules and can talk to a lawyer about my options in such a case.

    0Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    10y

    @Simon Stahl, this sounds like your first property. Take the advice above and read through that entire PDF. Then read the entire Landlord Tenant laws for Oakland specifically. You are in some of the most expensive real estate in the nation, and in a very tenant-friendly state on top of that. Rent control isn't anything to play with - you can almost bet that any tenant you try to remove will know the law much better than you do. 

    You can successfully make money in the Bay Area, but it's not just a walk in the park.

    [email protected]Podcast Guest on Show #261
    BiggerPockets
    2Reply
  • Laura M.
    Oakland, CA · Member since 2015 · 16 posts · 10 votes
    10y

    @Simon Stahl Buildings with 3 units and under with an owner occupant are exempt from rent control (rent can only increase by the CPI, currently at 2% in Oakland) but are NOT exempt from just cause eviction. SFHs are exempt from rent control and NOT just cause eviction. You are allowed to increase the rent by more than 10% if exempt from rent control, the notice is 60 days.

    Good luck!

    0Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    10y

    @Simon Stahl and @DG A.,

    Something I'm aware that some Oakland landlords do. This is not legal advice, I am not a lawyer, talk to a lawyer, etc, and I also wouldn't 100% hang my hat on this and only buy a place.

    Did you kick anyone out, or ask them to leave, or evict them, tell them that they must move out, or give THEM a notice of THEIR rent going up? Nope, nope, nope, nope, and nope.

    But you did focus them on something and give them a goal other than tenant's rights stuff: "the refund of your security deposit in full." 

    Again, talk to a lawyer.

    2Reply
  • DG A.
    San Francisco Bay Area · Member since 2015 · 196 posts · 181 votes
    10y

    Rent control ordinance just got a little tougher in Oakland!!!

    Now it's 2 years before an owner occupying a building 3 units or smaller is exempt from rent control. 

    Here's the news: http://www.courthousenews.com/2016/09/21/oakland-m...

    Here's the actual update to the ordinance: http://files.constantcontact.com/6ed57cf7001/beee5...

    0Reply
  • Simon Stahl
    OP
    Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
    10y

    Wow, that is just getting crazy around here...

    0Reply
  • Michael Simpson
    Real Estate Agent · Livermore, CA · Member since 2016 · 10 posts · 3 votes
    10y
    Simon - my advice to get someone out quickly is to give them cash for keys and also find them other housing. I did this for my friend who is an investor. He bought a run down single room occupancy building. I found housing for 12 (separate) tenants. People are happier to move if they have some options that work for them and money. There's lot of places that have cheap rent in oakland but you won't find it on Craigslist. I've done placement before getting into real estate and all the room and board homes aren't advertised.
    0Reply
  • Brian Garlington
    Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
    9y

    Simon,...............Is there a particular reason you are choosing to buy in Oakland? If you have questions about teant laws, etc it may be simpler to either buy a unit that is vacant.....or just avoid Oakland, Berkeley and San Francisco (All 3 are very tenant friendly) altogether. If you are looking to buy from an investor standpoint and not live in the property then you can find plenty in Concord, Antioch, Pittsburg....etc...........

    If you are going to owner occupy in Oakland......which is what i did.....keep it simple and buy a multifamily that is vacant. Then you can find your own renter(s) that you are comfortable with my friend.

    2Reply
  • Simon Stahl
    OP
    Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
    9y

    Thanks @Brian Garlington. I live in Oakland, so naturally I look around in my backyard. I was looking at a townhouse that was priced pretty low, but is tenant occupied. I did decide against buying it for exactly this reason. 

    0Reply
  • Jen L.
    Realtor · San Francisco Bay Area, CA · Member since 2016 · 123 posts · 48 votes
    9y

    @DG A.  Thanks for the in-depth info.  Is there a certain category of housing in Oakland that are exempt from rent control?  For example, housing built after 1979?  

    0Reply
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