I would like to rent the units in my duplex furnished for short-term three month stays, and wait until rents are up again before finding a long-term tenant. Is this legal?
The short answer is “no,” this is not legal anymore. In July of 2020, the Board of Supervisors passed what is known as the Intermediate Length Occupancy law, or the ILO. The ILO essentially requires apartment owners to rent their apartments to natural persons for at least twelve consecutive months and imposes some additional disclosure requirements when advertising an apartment for rent.
The intent of the ILO is to encourage the use of apartments for long-term occupancy by permanent San Francisco residents. The City will only license 1,000 apartment units to be used for occupancies for less than one year. In addition to amendments to the Planning Code, the ILO also supplemented the Rent Ordinance with the following provisions: (i) rental agreements may not require a tenant to vacate at the expiration of a stated term; (ii) rental units in most instances may not be rented to corporate entities or non-natural persons; and (iii) every online listing (and every print advertisement if practicable) for a rental unit must contain a legible disclosure in at least a 12-point font that includes the following statement: “This unit is a rental unit subject to the San Francisco Rent Ordinance, which limits evictions without just cause, and which states that any waiver by a tenant of their rights under the Rent Ordinance is void as contrary to public policy.”
With regard to enforcement, the Rent Board shall process referrals regarding online listings that do not contain the disclosure about the Rent Ordinance. The Rent Board will notify the offending landlord to correct the advertisement, and the landlord must make the correction within three business days thereafter. If the landlord has not made the necessary correction after this period, the Rent Board may begin imposing fines not to exceed $1,000 per noncompliant listing. More importantly, the City Attorney’s office and local nonprofits may also bring legal actions against noncomplying property owners for engaging in short-term rentals in violation of the ILO.
So unless you have one of the only 1,000 licenses to permit ILO use for your rental unit, please stay away from this practice. Yes, you may allow a tenant to breach a rental agreement without penalty, but you should not enter the transaction with the intent of creating a short-term lease. For example, let’s say you rent to someone for a year and that person ends up voluntarily leaving after six months. You may elect to not pursue the former tenant for monetary damages, but you should not advertise or otherwise seek to rent standard residential apartment units in this town for under a year.
In addition, as noted above, please list only natural persons on the rental agreement as the tenant, and avoid leasing to corporations, trusts, or other non-human entities. Finally, make sure that your advertisements contain the required disclosure pertaining to the Rent Ordinance’s applicability. Keep in mind that all residential rental units in the City now come under the Rent Ordinance’s jurisdiction in terms of just cause eviction protection, meaning this disclosure should be in all advertisements regardless of the property’s age.