Owner Move-In Fraud

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Owner move-in fraud occurs when an owner of a residential property in a rent control jurisdiction in the Bay Area, typically San Francisco, Oakland or Berkeley, gives a notice of eviction to a tenant and evicts a tenant falsely stating that the dominant motive of their eviction is to physically move into the rental unit themselves. Often, it is just a ploy to get rid of a long-term tenant who is paying below market rent, to either re-rent the unit at a much higher rate or sell the property without a tenant in it.

Properties that are sold without tenants living in them are far more valuable than if the unit is tenant-occupied — even if they have only been occupied for a relatively short period of time. That is to say, if you want to sell your property, you would be highly incentivized monetarily to have the property vacant. Because of that incentive, many landlords just flat out lie, and prior to selling the property, lie to the tenants and say they want to move into it. Then, as soon as the tenant moves out, they put the building on the market for sale.

Q: How long does the landlord or owner have to live there after moving in?

There is a presumption of three years, but it is not a hard and fast rule. The rule in San Francisco is that when an owner moves into a residential unit via an owner eviction, they have to intend to reside in the unit for three years as a principal place of residence. They now have to submit an affidavit annually to the rent board stating that they reside there and have done various things such as put utilities in their name, transferred their DMV registration, put their voter registration at that address and other actions that indicate it is their principal place of residence.

There are also prohibitions on re-renting the unit if the landlord does not reside there. If they do re-rent it within five years after an eviction, they have to offer it back to the tenant who was displaced, and they have to rent it at the rate that the tenant was paying when they were evicted. This is subject to a very small annual adjustment that the rent board publishes every year.

It is also three years for Oakland. However, in Oakland, you don’t need to provide the affidavit or re-rent it back to the tenant within five years.

Q: How does an evicted tenant prove what the owner’s intent was two years earlier?

The fact that the owner did not reside in the unit for three years is evidence that they did not have the intent to reside there for three years. But there are circumstances where an owner does an eviction and intends to live there for three years or more, but then circumstances change, and they get a job in New York, for example, or they get a divorce or something changes and they move out. As attorneys, we have to be very cautious that we are filing a complaint that we think we can prevail on. So, we will do a very thorough investigation and hire private investigators to try to determine why the landlord moved out within just two years.

This is precisely why it is important to hire a knowledgeable attorney who has a great deal of experience in this specific area of law. It is very hard to prove cases involving someone’s intent. Although on TV and in movies they say cases are highly circumstantial, almost all cases based on intent are actually highly circumstantial. The only direct evidence of someone’s intent is an admission or a confession. As long as someone does not admit to what they are doing, the only way to prove what they are thinking is through circumstantial evidence — indirect evidence of their intent.

Most lawyers do not have the experience to cultivate the evidence to present it properly to a mediator or jury. So, it is critical to have an experienced and capable lawyer who can assist and glean the important evidence that indicates the intent and who can see the importance of the circumstantial evidence that might lead to a number of different conclusions. If you have an inexperienced attorney, you are at a serious disadvantage as a tenant. In most of these cases, the evidence is not obvious and requires a great deal of subtlety, nuance and experience.

Q: What should you do if you suspect owner move-in fraud?

It is very important for the tenant to watch the property themselves for an owner move-in eviction after they have been evicted. They should also ask their former neighbors to keep tabs on the property and to keep in touch with them. Once they have a suspicion that the owner does not reside there or did not move in, then they should contact an attorney immediately because the statute of limitations for a wrongful eviction case is typically one year. New legislation in San Francisco extended the time to sue to five years after an owner move-in eviction, but this legislation has not yet been tested in the courts.