All Forum Posts by: Patrice Pominville

Not sure if you can legally airbnb an ADU in San Francisco. For short term rentals in SF you have to reside in the unit. The ADU is considered a separate unit, so you would probably only be able to lease it out for more than 30 days legally.

What a nightmare. Glad it's finally over for you.

From what I can gather from various forums and reading the articles of law, painting, changing carpets and other such cosmetic maintenance are NOT the responsibility of the landlord, even after 10 years. Can anybody confirm or deny that is the case. Although most source seem to confirm this, some articles seem to imply the contrary:

https://homeguides.sfgate.com/can-landlord-charge-new-carpet-new-paint-lived-there-10-years-44474.html

If anybody has first hand experience with this in San Francisco and can provide some insights, it would be much appreciated. I'd like to have a solid understanding of my responsibilities in the face of the law before responding to such requests by tenants.

Thanks,

Ok, thanks for all the info @Zachary P., I'll PM you 

@Amit M. Agreed, the legality and enforceability of the buy option at a the strike price under the stated conditions is key and would have to be bulletproof legally. As for "giving him a condo" - if he's not interested in a buyout - then that's pretty much tantamount to what he currently has given the SF laws. In which case might as well try to make the best of it, and capture a 10-15% value add with a conversion. Also the conversion would enable me to sell my unit if I wished, while keeping the tenant's unit as a long term investment. Or I would be able to rent out my unit without worrying about rent control. But yeah, the question is are those benefits worth the hassle, costs and possible risks.

@Zachary P. Amit has a good point, I thought legally all buyouts need to be registered with the city, so I imagine an "unregistered" buyout would involve some variation of the scheme he outlined.

Thanks Zachary, I wasn't aware of that, I thought all buyouts had to be registered ... definitely something I'll look into. 

However if the tenant doesn't want to make a deal at a reasonable price, I wonder if the my proposed co-owning scheme would be a viable alternative.

I've own a pre-1979, 2 unit duplex in San Francisco and live in one of the unit, and have a protected tenant  (71 years old) in the other unit. Reading about SF condo conversion laws it seems like condo conversion is not possible while there is a tenant in the building:

  " ... note that as of July 2017, the City is not accepting ECP applications from buildings with renters because of a recently-filed lawsuit challenging the constitutionality of the lifetime lease requirement"

Also buying out a protected tenant taints the property and it cannot be condo converted afterwards. 

So it seems there's no way do this unless I get very creative. Here's the idea: What if I sold the tenant his unit and made him partner in the TIC and then do the conversion? I would like to structure a deal along these lines:

1) Sell the tenant his unit for 500k and provide him with 125k for the downpayment for the mortgage he will acquire.

2) Create a contract that stipulates:   

(a) He will agree to participate in the TIC -> condo conversion (I will pay all fees)

(b) The 125k is a call option where if he decides to move, he has to first offer me the option to buy the unit for 375K (500k-125k)

(c) If he passes away,  (b) also applies (ie I have to option to buy from whoever inherit the property at the time of his passing)

(d) He gets to keep any equity he builds up (think of it as buyout money)

Advantages for the Tenant:

(a) He becomes an owner and doesn't have to fear being evicted for the rest of his life

(b) The mortgage + property taxes + HOA fees would be similar to his current rent (2250$)

(c) He gets to build some equity

(d) He can deduct interest charges from his income

Advantages for Me:

(a) My unit becomes a condo and can be resold individually

(b) My unit will not be covered by the SF rent controls if I decide to rent it

(c) The tenant is 71 years old, so when I eventually regain control of the both units, they will already be condos.

(d) The 125k for his downpayment will come from my reduced downpayment for my smaller mortgage.

(e) I don't have to be a landlord and deal with his tenant issues, repairs, etc ..

Of course I'll working a good lawyer before doing attempting to do this, but I wanted to float the idea here first to see if it flies and if anybody has attempted something similar.

Thanks for any feedback!