This is insane. An owner of a property not subject to rent control should be free to raise rent to any amount. The argument that "Look, you can increase the rent to market rate, but you can’t raise it way above market rate" is completely insane. If I want to charge you $900,000 per second to rent my house, I am free to, and you are free to not rent it then.
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Actually, no. Charging existing tenants more than the market rate in order to evict them and so avoid your obligations under the OMI regulations is not something that you are allowed to do. If you want to do an OMI, then do the OMI. File the paperwork, compensate the tenant, wait the required period, and do the owner move in properly.
Nothing forces you to be a landlord -- in this case the owner inherited a house with tenants. They can always sell the asset to someone who is familiar with the laws and is able to comply with them. Given the high prices in SF, this should be easy to do.
But owning property with an existing tenant makes you a landlord -- you are choosing to be in this highly regulated line of work. It used to be case that landlords could do whatever they wanted to tenants, but the law has since changed. Now being a landlord requires that you maintain the property, that you give proper notice for things like rent increases, that you file paperwork when you want to do the OMI, and that you compensate the tenant for evicting them due to no fault of their own (such as what happens with an OMI). So please do your homework instead of arguing that you should be able to do whatever you want to your tenants.
I don't think that's what happened in this case.
They removed an illegal (that's the key word) in-law unit, making the unit a single family home.
That single family home was no longer under the rent control laws, enabling the owner to jack up the rent.
If they had gone by the book, they would have just had to pay the tenant 9.5k to go away, which is what (in retrospect) the owner should have done.
400k seems egregiously high, and designed to pander to populist opinion rather than any reasonable interpretation of the law.
> That single family home was no longer under the rent control laws, enabling the owner to jack up the rent
Unreasonable rent increases to circumvent OMI rules are generally prohibited in such rules (since they are the most obvious way to effect an eviction pretextually), which are independent of rent control rules. The legal issue here was the OMI rules, not rent control, so the illegality of the other unit or the change in rent control status is irrelevant.
> 400k seems egregiously high, and designed to pander to populist opinion rather than any reasonable interpretation of the law.
It's not a 400k award, it's a 400k settlement, which means that the owner clearly thinks that the actual award that survived all appeals plus the cost of litigation (including the cost in the owners time) would be at least that much.
> It's not a 400k award, it's a 400k settlement, which means that the owner clearly thinks that the actual award that survived all appeals plus the cost of litigation (including the cost in the owners time) would be at least that much.
Why did you nitpick a point instead of addressing the egregiously high seeming cost? Your point merely buttresses my point, which is that 400k is far more than can and should be reasonably expected.
Why did you dishonestly call it a nitpick, rather than the essential point that it is?
> Your point merely buttresses my point
Um, no. That's a ridiculous dishonest claim.
> which is that 400k is far more than can and should be reasonably expected.
No, the whole point of the "nitpick" is that this is false. The landlord quite reasonably expected to pay more if he were to go to court. There's a good reason for this expectation: because the landlord intentionally violated the law for their own gain at the expense of the interests of the tenant. The landlord is a bad bad person who did a bad bad thing, and should be treated accordingly.
I guess this is you missing the point.
> Why did you dishonestly call it a nitpick, rather than the essential point that it is?
You should understand the point being discussed before accusing people of dishonesty. The point buttresses my point, if read using any definition of basic reading comprehension you'd chose to use.
> The landlord quite reasonably expected to pay more if he were to go to court.
And my point is that the unlawful eviction of somebody, even with punitive damages, shouldn't rise to even the same order of magnitude of 400k, let alone a huge amount higher. That's enough to buy a new house in much of the rest of the country.
The punitive damages should be something to do with the total lawyer fees in the case, as well as the expenses to move, as well as a deterrent amount.
NOT the ability to buy an entire new house, or an amount which might reasonably requiring the person being sued to sell the house. Now is the point clear to you?
> And my point is that the unlawful eviction of somebody, even with punitive damages, shouldn't rise to even the same order of magnitude of 400k
Why not?
> That's enough to buy a new house in much of the rest of the country.
So what? What does the rest of the country have to do with it? The rest of the country isn't where the wrongful deprivation occurred.
> The punitive damages should be something to do with the total lawyer fees in the case
Lawyers fees and court costs are often awarded in addition to any actual and/or punitive damages awards, and are, like actual damages, compensatory rather than punitive.
> as well as the expenses to move
Again, that's compensatory rather than punitive damages, and it's what's required when landlords comply with the notice and other restrictions applicable to OMI evictions.
> as well as a deterrent amount.
Actually, that's the only part that is punitive in nature.
You've basically identified the relocation payment they would have had to make if they complied with OMI rules, punitive damages, and fees and costs, but not any compensation for harms due to the failure to observe the procedural (notice/timing) requirements of Omi rules or for not paying when due.
Now on top of what all that would have been in the case of a trial, add in the value to the defendant of not admitting wrongdoing, and avoiding the costs (including time costs and stress) of litigation, and you've got a reasonable upper bound on a settlement.
> NOT the ability to buy an entire new house, or an amount which might reasonably requiring the person being sued to sell the house.
Well, it's clearly not enough to buy an entire new house in the area in question, so that's irrelevant. And I hardly see how the latter standard is justified, since that's dependent wholly on the defendants financial state. You certainly haven't established that the actual number here doesn't fit even your initial description of the elements that would make a reasonable amount.
> 400k seems egregiously high, and designed to pander to populist opinion rather than any reasonable interpretation of the law.
400k is what they settled for. They did so, presumably because they were exposed to even worse because they behaved egregiously and if damages did not include a substantial punitive component (at least proportional to the inverse of the successful litigation rate) it would be economically irrational to not break the rules constantly.
Who installed the in-law unit, the tenant, or the owner?
I believe the previous owner, whom the current owner inherited from.
Which is not the current owner's "fault", but not the tenant's either, which to me makes the fact that it was the supposed 'triggering event' rather unfair.
The article indicated an inheritance, thus likely a family member?
You are not charging them! You are notifying them that you will not renew their permission to USE YOUR property unless they pay more.
The issue here is your hyper libertarian views on the Divine Rights of Property Owners(tm) isn't shared by wider society, nor supported by the law.
If he had raised the the rent as he did and then rented it to a different tenant, there would be no issue. If he had raised $100 a month, she decided to move out and he moved in, there might not have been an issue.
You give up some rights on your property when you become a landlord. For instance if you own a home, you can go in and out of any part of that home whenever you like. However if you rent it out to someone else, you lose that right. (You can enter but must give notice a certain amount of time in advance.)
As a landlord, you have the right to raise rent above market rate in most areas, but in this case you lose the right to move in if said raise in rate causes the tenant to move out.
>You give up some rights on your property when you become a landlord.
That's a big reason for the shortage in rental units. To navigate this environment safely you really have to be a full time landlord with good legal advice and relatively deep pockets. There are probably thousands of MIL units and back rooms that would be on the market if not for the legal risk.
No, actually, it's not, but nice story.
Yes, actually, it is, but thanks for the reply.
So is it "probably" or is it "actually"? You don't have an evidentiary foot to stand on and you know it.
Nor do you have any evidence it isn't true. That was a pretty bold assertion on your part.
> An owner of a property not subject to rent control should be free to raise rent to any amount.
They are free to raise the rent to any amount. They just are limited in doing that for the purpose of forcing the tenant to move out so that the owner can move in, and avoiding payment to the tenant that would otherwise be required under the owner-moves-in rules.
> If I want to charge you $900,000 per second to rent my house, I am free to, and you are free to not rent it then.
Sure, but if you do that to get me to move out so you can move in, where there are OMI rules, you still have to make the OMI payment. Or, better, don't bother with the pretext and just make the payment.
I understand your perspective. As a landlord myself, why can't I choose to charge whatever I want for something I own? It makes sense but you must be empathic and understand things from the tenants perspective as well.
The tenant lives on your property not because he wants to, but because he has no choice. The tenant cannot afford property, and if things remained lawless the balance of power would unfavorably shift to the landlord. Without law you literally have the power to make the tenants life a living hell. You can raise rent without notice. You can kick him out the second there is a higher bidder, you can kick him out simply because you don't like his shoes.
Imagine that! a person left with no place to live because someone didn't like his shoes. This is obviously not moral, and thus that is why laws exist to protect tenants.
Not if you want your property rights to be enforced or a court of law to uphold your position.
"This is insane."
No, it's the opposite.
"An owner of a property not subject to rent control should be free to raise rent to any amount."
That "should" reflects the morality of a sociopath.
"The argument that "Look, you can increase the rent to market rate, but you can’t raise it way above market rate" is completely insane."
No, it's the opposite.
"If I want to charge you $900,000 per second to rent my house, I am free to"
Not in a rational society that doesn't cater to sociopaths. Also, that's a strawman that doesn't relate to the situation in the article.