Effective April 6, 2020, the Board of Supervisors amended Rent Ordinance Section 37.9E (the “Amended Buyout Ordinance”) to revise the requirements that landlords must follow when engaging in buyout negotiations with tenants. A copy of the legislation is available here [Ord No. 36-20]. Specifically, the Amended Buyout Ordinance made the following changes to Rent Ordinance Section 37.9E:
- The legislation required the Rent Board to revise the Pre-Buyout Disclosure Form to include information regarding the impact of a Buyout Agreement on a tenant’s eligibility for the City’s affordable housing programs.
- The legislation required the Rent Board to revise the Landlord Declaration Regarding Buyout Disclosure Form for the landlord to indicate the date the Pre-Buyout Disclosure Form was served on the tenant(s), the method of service used (e.g., hand delivery, email, regular mail), and the Assessor’s parcel number (lot and block) of the building where the unit is located.
- After starting buyout negotiations, the landlord and tenant must now wait at least 30 days before executing the final Buyout Agreement.
- Additional statements must now be included in the Buyout Agreement, including a disclosure regarding the tenant’s right to cancel the agreement and the address of the unit and the assessor’s parcel number (lot and block) of the building where the unit is located.
- If the landlord does not file a copy of the Buyout Agreement with the Rent Board within 59 days after the agreement is executed, the tenant may now file a copy of the Agreement and any provision of the Agreement in which the tenant waived their rights or released claims is then voidable at the option of the tenant (but the tenant’s remedies would not include displacement of a subsequent tenant in the unit).
In addition, subsections (c) and (i) of the Amended Buyout Ordinance made the following changes to the requirements for buyout negotiations that precede the filing of an unlawful detainer (eviction) lawsuit:
- The term “Buyout Agreement” was broadened to include agreements to settle unlawful detainer actions, but only if the unlawful detainer action was filed within 120 days after buyout negotiations started. [Rent Ordinance Section 37.9E(c)]
- The party who files the Buyout Agreement was required to inform the Rent Board if the Buyout Agreement concerns an unlawful detainer action. If so, the Rent Board was required to redact from the posted Buyout Agreement any information concerning the unlawful detainer action that may be confidential under State law. [Rent Ordinance Section 37.9E(i)]
On December 11, 2020, the San Francisco Superior Court found subsections (c) and (i) of the Amended Buyout Ordinance to be unlawful and enjoined the City from enforcing those provisions, but allowed the remaining sections of the legislation to remain intact. On May 2, 2023, the California Court of Appeal issued an unpublished decision affirming the lower court's Order. Thus, subsections (c) and (i) of the Amended Buyout Ordinance regarding buyout negotiations that precede an unlawful detainer continue to be enjoined, and the rest of the Amended Buyout Ordinance described above remains in effect.