Tenant Info: Building Is Being Sold

If you are under rent control, the simple answer is that nothing changes. A new landlord is a new landlord. She cannot raise the rent (unless she is banking on back rent increases, see below), change the terms of your lease (including giving you new house rules), evict you (except for a just cause, if you're under rent control, see below) or hassle you over unwritten oral agreements you had with your previous landlord.

A new landlord cannot raise the rent unless she is banking on rent increases the previous landlord did not take. Those increases have to be the allowable ones for the years in question. For example, if your previous landlord did not take increases in 2000 and 2001, then the new landlord can bank 2.9% for 2000 and 2.8% for 2001, totaling 5.7%. The rent increase requires a written 30-day notice. If the banked rent increase is 10% or more, a 60-day written notice is needed.

A new landlord is bound by the rules of rent control, just as your old landlord was. Which means simply that he can only evict you for a just cause. Unfortunately, just cause includes two that he could invoke to displace you. They are:

The landlord might be able to move into your apartment. But he has to follow the rules of owner move-in (OMI) and the limitations spelled out in the law. (See our eviction section for more info on OMI. Click on "tenant rights" above and check under "eviction.")

At present, this is the biggest threat facing any tenant whose building is being sold, but only if that building has fewer than six units (though any size building can be Ellis-Acted). Here's how the typical scenario works:

The landlord sells the building to a real-estate speculator who then files an Ellis Act eviction, clearing the building of all the tenants. Ellis allows a landlord or speculator to get around rent control. Normally, a landlord would not be able to evict the tenants unless she had just cause. Ellis gives the new owner "just cause" to clear out all of the tenants at one time. The law is often justified by landlord advocates as defending the landlord's right "to go out of the business of being a landlord." But if a landlord wants to stop being a landlord, she merely has to sell his/her building. The reality is that Ellis was conceived by realtors desiring to get around rent control--and make lots of money. Those evicted under Ellis get 120 days (four months) to move unless they're seniors or disabled, in which case they have a year. They also receive relocation money, (see our section on evictions for a relocation chart). The speculator finds people to buy into the building as a tenancy in common. They share a single mortgage. For example, if it's a three-unit place, he finds three people. These three new owners sign an agreement to each occupy a unit. Once they occupy their units, the three owners file for condo conversion. These days, because of a law passed about two years ago, speculators and landlords are not doing direct Ellis Act evictions. They are sending long-term tenants letters threatening Ellis or offering a buyout. You do not have to accept the offer. Call or stop in for counseling at our office. To see our times, click "counseling" above.

In addition to the inconvenience of showing your apartment (see below), the other thing you need to be concerned about while your building is being sold is what to do about the Estoppel Form. When a buyer is interested in a building, the realtor will send you a form called "Estoppel" which asks a lot of questions. You are not legally required to fill it out. You may also receive a form asking if you are in a protected category, i.e., a senior or disabled. If you are in one of these protected categories, then you are safe from an OMI and receive a year to move in the event of an Ellis eviction. It is important to let a potential landlord know this, so you want to return this form.

As far as the Estoppel, if you choose not to send it in, then it is recommended that you draw up your own letter to the new landlord. The most important reason is that you want to assert any rights you have that are not specified in your lease because there is the danger that a new landlord could try and evict you for breach of lease. At the very least she could threaten you with what is perceived to be a breach of lease.

For example, if you're not supposed to have a pet but the previous landlord always allowed you to have one, then you need to let a new owner know that. The same for use of the garden, storage space in the garage or basement, etc.

You can send a letter, such as: "I am so-and-so, I live at such-and-such, apartment #_, I pay $___rent, I have a cat and a gold fish that the landlord knows about, I use the garden to sunbathe, etc."

Note: Sometimes realtors will tell you that the Rent Board requires that you send in the Estoppel Form. It's not true. Another thing: If you do not assert your status as a senior or disabled, it may cause problems for you if the new owner does an OMI. Send in that form, if applicable.

You cannot stop the landlord from showing the apartment while she is selling the building. To do so would be grounds for eviction under the rent ordinance (just cause #6). You can, however, negotiate for times that are good for you. Under California Civil Code 1954, a landlord is supposed to show the place during normal business hours (which is presumed to be 9 am - 5 pm, Monday through Friday). She is also supposed to give you 24-hours notice before entering. You can say, "That time is not good, how about such and such a time instead?"