Margaret Foster (“Foster”) lived in the same apartment in San Francisco for more than 40 years. In 2011, her building was bought by W.J. Britton & Co., Inc. (“Britton”). As part of new management, Britton sent each tenant a new set of house rules. In those rules, the tenants were required to share the back yard equally, maintain their own garbage service, keep all of their personal property inside, and use a laundromat instead of washing clothing in their sinks or tubs in their apartment. Britton notified each of the tenants at the complex that they were required to accept the new house rules or they could give 30 day notice to move out. Previously, Foster’s tenancy included garbage service, two parking spaces, personal space in the backyard, additional storage space outside her unit, and the right to use her porch for laundry and storage. Foster refused to sign the new house rules and instead filed a lawsuit stating that Britton could not evict Foster for refusing to agree to the new rules and that San Francisco’s rent control ordinance, specifically Rule 12.20, barred any eviction of a tenant refusing to agree to new house rules. In response, Britton contended that the Rent Board’s rule conflicted with California law and the Rent Board’s authority. The Rent Board joined the lawsuit.
At the trial court level, the Court ruled in favor of Foster finding that California law did not preempt the Rent Board’s rent control ordinance. Specifically, the Court noted that Rule 12.20, which provides that a landlord may not evict a tenant for refusing to accept new obligations or changes, is not preempted by California law. As such, Britton could not require Foster to sign the new rules nor evict her for refusing to sign them. Britton then appealed the ruling.
The California Court of Appeals for the First District affirmed the trial court’s ruling and held that California has traditionally held that substantive rent control ordinances may be a permissible exercise of a city’s authority. The Court noted that this was different from rent control ordinances that create procedural barriers, such as requiring a landlord to obtain a certificate from the city prior to evicting a tenant. Here, since Rule 12.20 does not require additional procedural actions from the landlord, the state laws do not preempt it and Rule 12.20 is therefore valid.
WHY THIS DECISION IS IMPORTANT:
This decision provides guidance to cities on how to craft rent control ordinances that will survive challenge. The decision reaffirmed that cities have the power to enact substantive rent control ordinances that restrict the grounds that a landlord may evict a tenant for. However, a city will have great difficulty in defending an ordinance that delays the eviction process or makes a landlord jump through more hoops. As for San Francisco landlords and tenants, this decision makes clear that changing a lease will be very difficult without agreement of all of the parties involved.
San Francisco landlords need to be very careful on the terms of the lease. As changing the lease in the future is very difficult, they should spell out all of the terms of the lease and all of the services provided by the landlord at the outset. This likely applies in other rent control cities also.
Foster v. Britton, 242 Cal.App.4th 920 (2016)