Know Your Rights in an Owner Move-In Eviction
Owner Move-In Eviction is also often referred to as an OMI, Relative Move-In, LMI, or Landlord Move-In Eviction
OMI Defined
The San Francisco Rent Ordinance allows the owner of a building to evict all tenants from a single rental unit if:
- The owner has at least a 25% interest in the building; and
- Intends in “good faith” to live in the unit for at least 3 years (barring an emergency)
An owner may also move an immediate relative into a building if:
- The owner has at least a 25% interest in the building; and
- The owner lives in the building or is simultaneously evicting to live in the building
Immediate relative includes grandparents, grandchildren, parents, children, brothers, sisters, a spouse or the spouse of any of these relatives.
Minimum Moving Allowance
In an OMI, the owner is required to pay the existing tenants relocation assistance – roughly $5,000 per tenant up to a maximum of $15,000 per unit. Half of this money is due at the time of the eviction notice and half when the tenants vacate. In addition, the owner must offer any vacant units they own to the tenants, even if in other buildings.
Rental Restrictions and Wrongful Eviction
If the landlord does not live in the unit for three (3) years, the landlord must offer the unit back to the tenants at the original rent, adjusted by allowable annual rent increases. When a landlord does not offer a unit back to the tenants or does not live in the unit for three years, the tenants can file a wrongful eviction lawsuit against the landlord.
Step-By-Step OMI Process
- Oral Requests and Offers
Typically, the OMI process begins with oral requests for the tenants to vacate and offers of payment. It is in the interest of the owner to pay to move tenants out. In attorney fees alone, it will cost the owner a minimum of $10,000 to move forward with an OMI. See Negotiating a Buyout –What the Landlord Stands to Lose in an Owner Move-In Eviction. In addition, if the owner is a recent purchaser of the property, the owner is paying a mortgage equivalent of roughly $2,000 per month per unit. The longer the tenant stays in the building, the greater the loss to the owner in debt service. Even more, the three (3) year rental restriction greatly reduces the property’s resale value – perhaps as much as 20% per unit. If the owner can get tenants to waive their rights and move-out quickly and without a legal battle, it saves the owner close to an average of $120,000 per unit. See, Negotiating a Buyout: What the Landlord Stands to Lose in an Owner Move-In Eviction.
- Sixty (60) Day OMI Notice of Eviction
If the tenants and owner cannot reach a settlement, the tenants may receive a sixty (60) day notice to evict. This notice has many technical requirements and must be drafted by an attorney familiar with San Francisco rental laws. Landlords and even some attorneys often make mistakes on the sixty (60) day notice
This is a good time to meet with a tenant attorney. An eviction notice does not mean a tenant has to move out, but it may be in the tenant’s best interest to move out if there is reason to believe that the owner is being dishonest.
It is important to understand that a sixty (60) day notice does not change negotiation strategy. In fact, the notice can be withdrawn up until the expiration of the sixty (60) days or until the tenants vacate. The three (3) year rental restrictions do not go into effect when the notice is served. This means that a notice should not set off a panic by the tenants. In fact, a sixty (60) day notice could actually put the tenants in a better strategic position.
- Eviction Lawsuit
If the tenants have not vacated within sixty (60) days of service of the notice, the owner may file an eviction lawsuit called an unlawful detainer. From the date of service of the unlawful detainer, the tenants have five (5) days to file an answer. Two weeks after an answer is filed, a mandatory settlement conference is held. If the eviction lawsuit does not settle, a trial is held. During the trial, the tenants can challenge the good faith intent of the owner. In other words, this is the time to prove the owner is not truly planning to live in the unit for three (3) years.
Be careful to check your lease for an attorney fee provision. If the lease has an attorney fee provision, the loser of the eviction lawsuit must pay the attorney fees of the winner. An attorney fee provision can put tremendous pressure on an owner acting in bad faith and could be a source of courage for an honest owner.
- Watch the Property
Whether the tenants move out after the notice or after an eviction lawsuit, it is important for the tenants to watch the property to make sure the owner or owner’s relative live in the unit for three (3) years. If the owner or relative does not move into the unit or vacates prematurely, they must offer the unit back to the tenants or face a wrongful eviction lawsuit.
The tenants must keep the owner updated on contact info, so the owner can easily contact the former tenants to offer them the unit if vacated. It is also a good idea for the tenants to file address changes with the San Francisco Rent Board.
