Dave’s at SF Appeal to answer your questions every Wednesday, so send them to him at firstname.lastname@example.org
My husband and I live in a two-unit condo that was converted from a TIC to a condo in 2007. The owners moved out during the conversion process and we moved in. They asked us to keep utilities in their name, which we did though we made the payments. I should state at this point that these people used to be friendly acquaintances of ours through a larger group of friends.
We moved in 5 years ago (March 2006) and the TCI to condo conversion was completed approximately a year after we moved in, at which point they indicated they wanted to sell the unit. This has happened twice over the past few years, they say they want to sell and ask us when we think we can be out.
They have never mentioned eviction, but have tried to stick us in the middle of negotiations with potential buyers to “guarantee” a move-out date with no mention of compensation. Of course no buyer has followed through with an offer since we were still in residence without a legal notice of vacating the property (though the property was advertised “delivered vacant”).
The owners have contacted us again this winter with the same game plan. Our response was, let’s talk about a buyout–otherwise we’ll deal with the new owners and an OMI eviction or whatever…
They were not happy about it but agreed to work with us on this and stated that they would have their lawyer draw an agreement. We have been very generous in not pushing them for more than statutory relocation payments and return of our deposit plus interest.
What we received was not what we expected. I believe it is a Stipulation of Judgment (which you mention in your article: Tenant Buyouts: The Agreement) with no accompanying document or agreement language. It seems very owner/landlord oriented, naming themselves as the plaintiff and us as the defendants.
My husband and I expected a letter of agreement stating terms and conditions etc. that would be witnessed/notarized and sent to us certified mail to sign a copy. I’ve attached what we received instead.
We have had some feedback from friends involved in real estate who all said don’t sign it. Our intent moving forward is to take control of the situation, let our landlord know that the document we received is not something we can agree too, draw the agreement ourselves, have it reviewed by a lawyer, sign notarize and send the document with copies to the owner. Does this seem a reasonable course of action?
In San Francisco a two unit building may bypass the condominium conversion lottery if both units were owner occupied for at least one year before submission of the conversion application. (San Francisco Subdivision Code Â§1359.) Here’s an informative article about condo conversions by Andy Sirkin.
I bring this up because I always think something is fishy when a landlord, engaged in the process of conversion, asks a tenant to keep the utility bills in his name or receive his mail. My first thought is that the landlord may be falsely claiming that he lives in the unit–defrauding the City. You can search the condo conversion process on a given building by checking with the Department of Public Works.
I’ve said this before: Tenants, never lie for your landlord. Never cover for them by receiving their mail or paying bills in their name.
You should also be aware that your unit is still covered by rent control regarding annual allowable rent increases. Even though it is now a single-family dwelling, it is not exempt because the original “developers” of the condominium have not sold the unit.
Buyouts are controversial among tenant advocates. Essentially, a buyout removes another rent controlled unit from the already dwindling supply. These days, buyouts rarely compensate tenants for increased market rent amortized over a given period of time. That said, I will represent tenants in negotiating buyouts, if after I tell them all the downsides, they feel a buyout is appropriate.
In my opinion, the terms of your buyout are unacceptable. In the agreement you attached (a stipulation for judgment) the landlords are only offering you the minimum relocation payments ($10,200.00, should be $10,202.00!) and the statutory minimum time (60 days) to vacate and waive all of your tenant rights.
Why would you agree to that, if you can get the same terms when a new buyer purchases the property and serves a legal OMI notice? I wrote about this in Tenant Buyouts: Your Absolute Bottom Line.
Remember, when you waive your tenant rights you’ll give the landlords the opportunity to increase the rent to market rate. This may be their goal anyway. Your rights are valuable and the landlords know it. They’re just being Cheeseballs.
As a rule, I don’t mind a stipulated judgment as a form of agreement, but I admonish my clients, “If there is any reason you think you will not be able to move out per the agreement, don’t sign it.”
Another common misconception is that agreements must be notarized. A notarized signature on an agreement like this does not lend more legal significance to the agreement. Generally, wills and documents to be recorded should be notarized.
If you want to be generous, that is your prerogative. Yet the agreement you attached does not provide for payment up front nor does it provide for enforcement in case you move and the landlords don’t pay. It should be redrafted whatever the consideration terms.