Roommates/ Subletting - Housing Rights Committee of SF
San Francisco, CA .. Housing Rights of Domestic Violence Survivors with Disabilities . The Violence Against Women Act and Rights of Survivors housing and who are attempting to end the abusive relationship should take steps to PHAs to consider when developing a family break-up policy include the. Aug 11, The acronym TIC, which stands for tenancy in common and tenants in that assign each co-tenant usage rights to the co-owned property, and TICs that do not. they made sense in only a few locations, including San Francisco, . only in the event friendly relations among group members break down. Assert and protect your legal rights as a tenant in California with this of California Tenants' Rights, has been a San Francisco tenant and housing . a pathetic quantity of tepid water, and dozens of other frustrating breakdowns. and no attorney-client or confidential relationship is or will be formed by use of the site.
By the way, a prohibition on subletting and assignment must be enlarged and bolded in the lease and initialed by the tenant. Or the landlord must provide the tenant a written explanation of the meaning of the prohibition. If your lease says no subletting or assignment without written permission of landlord, then you need to write for permission and include an application if required by the lease. The landlord has 5 days to process the application.
Under a new law, 6.
You should make the request for the additional roommate in writing and then the landlord has 14 days to respond. If the landlord refuses on unreasonable grounds, then you can file for a decrease in services at the Rent Board. For additional info, see 6. A landlord cannot charge more rent for an additional roommate or for a newborn baby.
You can file at the Rent Board for an illegal rent increase. Under that code, two people can live in a bedroom, three in a one-bedroom apartment two in the bedroom, one in the living room. Similarly, in a two-bedroom, a maximum of five persons can live there two per bedroom, one in the living room.
You must be registered as domestic partners, though. Go to City Hall and fill out the paperwork. Then send a copy of the certificate to the landlord along with a letter informing him that your partner will be moving in. The new law applies to short-term rentals in buildings of two units or more by residents who reside in their units for at least days a year.
A tenant who is NOT present in the apartment at the time of the space shares, may rent a portion or all of their residential unit for up to 90 nights a year. A tenant who IS present in their apartment during the space shares may rent it out for an unlimited number of nights per year. An illegal unit or spaces that are un-permitted cannot be legally rented via Airbnb. Nor can units with outstanding code violations.
In a given month, a tenant can not make more money from space shares than the monthly rent. A unit can be advertised on hosting platforms provided that its registration number obtained from the Planning Dept. Airbnb has said that it is NOT going to check ads for compliance with the law. Hosts must register with the Planning Department by first scheduling an appointment with a staff member to go over the rules and the application.
The department has 15 business days to review and issue a registration number which is good for 2 years. To schedule an intake, call If a lease agreement prohibits subletting, a landlord may evict the tenant for violating it by doing Airbnb.
BUT if the violation is of the lease restriction or prohibition of subletting then no days warning notice is needed, the landlord can proceed with an eviction based on breach of lease. How to register the unit: You must be the permanent resident owner or tenant of the unit you wish to rent. You must live in that residential unit for at least nights of the calendar year.
If you own a multi-unit building, you can only register the specific residential unit in which you reside. Your residential unit must not have any outstanding Planning, Building, Housing, Fire, Health, Police, or other city code violations.
You may only register one residential unit. By contrast, TIC owners own percentages in an undivided property rather than particular units or apartments, and their deeds show only their ownership percentages. The difference between physical division of ownership in county records in a condominium and an unrecorded contract allocating usage rights in a TIC is significant from both regulatory and practical standpoints, as discussed below.
Clear Answers and Explanations on Tenancy In Common (TIC)
In a stock cooperative or co-op, a corporation, LLC or other legal entity owns the property, and the owners of that entity each hold shares of, or membership interests in, the entity, along with usage rights to a particular apartment often but not always expressed in a document called a proprietary lease.
In most locations, a stock cooperative is legally recognized as a form of subdivision, and this recognition brings co-op ownership within the scope of most local subdivision restrictions and regulations. As a result, laws that restrict or prohibit the conversion of apartment buildings into legal subdivisions such as condominiums generally impose those same restrictions and prohibitions on the conversion of apartment buildings into stock cooperatives.
In practice, this means that if you can convert to a stock co-op, you can also convert to a condo, and you would always choose the condo conversion over the co-op conversion because condos are easier to sell and finance. On the other hand, if it is burdensome or impossible to convert to a condo, the same difficulties will apply to a stock cooperative conversion, but will not apply to TIC conversion.
That is why people form tenancies in common rather than cooperatives. Why have TICs become so popular? As the price of real estate continues to rise, and communities adopt ever-stricter growth and condominium conversion restrictions, more and more people are turning to tenancies in common and other non-traditional co-ownership structures as a way to maximize their buying and selling power.
At the same time, tenancy in common arrangements increase sale prices and marketing options for sellers by allowing them to sell fractions of their property to buyers for prices that generally add up to more than what the seller would receive from a single buyer.
The popularity of tenancies in common has been further enhanced by the introduction of fractional loans that allow co-owners to have individual mortgages, substantially decreasing the risk of co-ownership. When the first condo-like TICs were formed in the early s, they made sense in only a few locations, including San Francisco, Berkeley and Santa Monica, where a combination of rent control, the difficulty of obtaining approval for new construction, and limits on condominium conversion, together caused the price of condos to be significantly higher than the per-unit price of apartment buildings.
Today, nearly 30 years after the first TIC conversions, these economic conditions are present in numerous cities and towns throughout California and in several other states. Many of the newest TIC conversions have involved single-family homes.
Limited liability companies LLCslimited partnerships LPsand corporations are entities that can provide a variety of management and liability protection advantages compared with direct titled co-ownership arrangements such as tenancy in common. But for co-ownership groups who plan to occupy some or all of the co-owned property, the legal and tax disadvantages created by these entity structures generally outweigh the benefits.
If the LLC, LP or corporation can be deemed a stock cooperative, it is likely to encounter regulatory barriers as discussed above. Can any building or lot be converted to a TIC? Unless TIC conversion is prohibited by applicable law see discussion belowany building or lot can be converted to a TIC.
A SACO tenancy in common conversion is possible for an apartment building, a vacant lot to prepare it for future constructiona lot with multiple detached residences, an office or industrial building, or any other property category.
This type of tenant in common arrangement has also been used for mobile home parks, marinas, farms, co-housing, intentional communities, communes, underground disaster shelters, and numerous other properties.
Is TIC conversion legal everywhere? The legality of converting a property to SACO tenant in common ownership depends on local and state law, and thus varies from place to place. In most states and localities, there is no law addressing the legality of TICs, effectively making TIC conversion legal and the right to do it unconditional. In California, appellate courts have considered the legality of SACO tenancy in common conversions in a series of cases decided between and Each case struck down a different city or town ordinance or zoning regulation that attempted to limit or prohibit TIC conversion, largely on constitutional grounds.
As a consequence of this line of decisions, there have been no attempts by local governments to enact new laws prohibiting or restricting tenant in common conversion sinceand most of the legal community believes that it is now settled California law that cities and towns are not permitted to ban or regulate SACO TICs. The upshot is that, under current California law, a TIC of the space-assignment type discussed in this article could be formed for any building residential, commercial, or mixed use in any location in the state.
Neither the location of the building, nor its zoning, size, layout, age, unit mix or construction, matter from a regulatory standpoint. What legal restrictions apply to TIC conversion in California? California appellate courts have recognized a distinction between recorded and unrecorded documents assigning usage rights, and this distinction means that local laws restricting or prohibiting the conversion of apartment buildings into legal subdivisions such as condominiums do not apply to the creation of a tenancy in common arrangement so long as no document deeding or otherwise assigning usage rights is recorded in public records.
Consequently, TIC formation does not require any filing or approval with local governmental agencies such as counties, cities or towns. On the other hand, TIC conversion in California does require the approval of the California Department of Real Estate DRE if the property to be co-owned and occupied contains five or more units of which at least one is a residential unit. This approval requirement applies based on the number of units in the property, not the number of TIC interests to be created or sold.
So, in the case of a five-unit apartment building, DRE approval is required even if the owner intends to sell only one TIC share.
- Clear Answers and Explanations on Tenancy In Common (TIC)
- What is the difference between a SACO TIC and a condominium?
The Public Report contains extensive information and disclosures about the property and the TIC group, and must be given to all prospective buyers. Resale of TIC interests are generally allowed without a Public Report, but the rules defining what constitutes a true resale as opposed to a sham designed to circumvent approval requirements are strict.
What is included in a tenancy TIC agreement?
The goal in tenants in common agreement preparation should not be simplicity or brevity. A short agreement is unlikely to directly address the real-life problem that will cause you to need the agreement. Consequently, using the short agreement to resolve a dispute will require interpretation and extrapolation, processes that make dispute resolution more difficult, time-consuming and costly.
A TIC agreement should be long enough to cover every important issue, well organized including an index or table of contents so that a needed provision can be located quickly and easily, and written in language that is understandable yet sufficiently nuanced to avoid creating ambiguity or loopholes.
In the unlikely event that you ever need to use your TIC agreement, you will want to be able to find a section that directly addresses your problem and clearly provides a solution. The issues that seem most difficult to address are generally the most likely to lead to a dispute. Another common mistake is to assume everything will work out exactly as planned particularly with regard to when people will occupy the property and whether and when they will sell. Housing plans are closely related to employment, health and domestic situations, and these regularly change in unforeseen ways.
Even a well-prepared TIC agreement should be used only in the event friendly relations among group members break down. Even the best agreement will rarely anticipate all circumstances, and applying a formulaic response that does not quite fit the situation may not reveal the best course of action.
What is a tenancy in common (TIC)?
Such an approach encourages group members to adopt firm positions based on agreement interpretations, and an impasse may develop. A better strategy is to rely first on discussion. The goal should be to develop a consensus that all owners can accept even though some may believe that the agreement dictates a more personally advantageous decision.
If a consensus cannot be reached, the TIC Agreement can provide a final resolution. How are TIC ownership percentages determined and what do they mean? In some groups, each owner holds an equal share, while in others the shares are determined by the relative value or square footage of the assigned areas of the property. The ownership percentages are often used for the allocation of certain shared expenses, most frequently insurance and common area maintenance, but it is important to note that there is no legal requirement that any expense be allocated according to ownership percentage.
In fact, a well-drafted SACO TIC agreement never allows ownership percentage to control resale or refinance proceeds allocation because such an arrangement would be unfair to owners who make wise investments in improving their space. How are TICs financed? Historically, most tenant in common groups shared one or more apartment building loan s that were secured by the entire property.
This type of financing, now referred to as fractional loans or TIC loans, is now by far the most popular form of TIC financing, and is currently available from five lenders in Northern California, two in Central California, and one in Southern California. Yet another TIC financing option is individual mortgages carried by a seller or former owner, often in conjunction with an underlying loan that predates the tenancy in common formation.
How do individual TIC mortgage loans fractional financing arrangements work? Individual tenants in common financing is separate loans for each fractional owner. Unlike with group financing, none of the other tenancy in common owners are affected by the default or foreclosure. Individual tenancy in common financing is not the same as individual condominium financing, and does not turn a tenancy in common interest into the equivalent of a condominium.
Since a TIC owner does not have title to a particular unit, an individual TIC loan cannot be secured by a particular unit or home. Individual tenant in common financing is not a new concept. More recently, developers of fractional vacation home projects have offered individual bank financing.
Individual tenancy in common financing is also created automatically whenever title is held by multiple owners but only one of those owners signs the mortgage, a situation which has occurred with sufficient regularity to create a body of law related to foreclosure on partial interests.
Group TIC financing describes the situation when the entire tenancy in common owner group jointly applies for one loan with everyone named as a co-borrower. In this arrangement, which has now become quite rare in California but is still common in emerging TIC markets such as New York City and Boston, each tenant in common owner shares responsibility for the loan, and the TIC Agreement states what percentage of the loan each co-tenant must pay.
As in a stock co-op,the TIC group loan monthly mortgage payments are made to the TIC homeowners association as part of the monthly homeowners association dues, and the association writes a single check to the bank. This risk of non-payment is real, but is commonly over-estimated. Although TICs with grop loans have been relatively common since the mids, and at least 3, of these groups have existed, we are not aware of any instances of foreclosure on a TIC group mortgage.
How can the risks of tenancy in common group loans be managed? Tenant in common groups typically manage this risk by i undertaking a complete investigation into the background and qualification of potential co-tenants before allowing them to join the group, ii requiring a similar evaluation each time a tenancy in common ownership interest is resold, iii making sure all payments on the shared loans are made form the group bank account rather than directly from each owner to the lenderiv keeping reserve funds which can be used to make payments while a non-paying owner is sold out of the group, and v creating a powerful and efficient internal enforcement and foreclosure system.
A less well understood risk of group tenancy in common loans is that the financing will complicate or prevent resale of tenancy in common shares. In most instances tenancies in common with group loans do not refinance the property when a single owner sells.
To accommodate this arrangement, it is important that TIC group loans be assumable. When allowed, partial assumptions are generally much less expensive than full assumptions, and do not involve re-qualification by the entire owner group.
Buyers entering into group loan, tenancies in common should consider the assumability of the loan to be its most important feature more important than the interest rate or origination fee. Note that i loans with a fixed rate of interest for most or all of the loan term such as a year fixed rate are rarely assumable and therefore not suitable as TIC group loans, and ii assumable loans are available in all markets and if you are being told otherwise you are being misinformed.
If the buyer does not have a large down payment, the seller will need to i accept some of the down payment as a note payable in the future and secured by the property, or ii arrange to refinance the property.
To prevent resale problems, tenancy in common agreements must have detailed rules governing these processes. A TIC Agreement which requires a unanimous or majority vote to refinance is not a good idea because it may ultimately prevent resale, and owners often need to resell for unexpected reasons such as job change or loss, illness, divorce or death.
The gradual decrease of the amount owed over time due to loan amortization will not affect the loan percentages. When loan percentages differ dramatically from ownership percentages, extra documentation should be used to provide additional security to the owner with substantially greater equity. What is TIC wraparound financing? The TIC owners each pay the seller who, in turn, pays the bank holding the underlying mortgage s.
This wraparound tenants in common financing structure has several advantages for all parties as compared to traditional group TIC loans. For the seller, it i diminishes the risk of carrying secondary financing by allowing the seller to make sure payments are current on the senior financing, ii allows the seller to charge an interest rate markup on the entire amount financed, and iii enables the seller to defer capital gains taxes using the installment sale method.
Also, the individual tenancy in common loans carried by the seller should not themselves be due on sale because that would make resale difficult; rather, each individual TIC loan should be assumable by a qualified buyer.
How are TIC property taxes allocated?