Landlords Suffer Setback in Relocation Fee Case

 Landlords fighting San Francisco’s new rules requiring enormous relocation payments to tenants for reclaiming rental properties lost their bid for a restraining order that would have stayed enforcement.

However, the judge did expedite the case so it will be heard in about six weeks.

The lawsuit was filed by the Pacific Legal Foundation on behalf of landlords who say they cannot afford the relocation payments.

According to the attorney for the landlords, the law requires property owners who wish to withdraw a rental property to pay tenants the difference between the tenant’s annual rent-controlled rate, and the amount it would cost to rent a comparable apartment at open market rates, and then multiply that amount by two. The landlords bringing the suit want to reclaim a duplex unit in their home for use of family members.

The San Francisco Tenants Union lobbied for the new rules, which it says are designed to deter flippers and other real estate investors in one of the country’s least affordable rental markets. Because of the current market rent, the law spikes the relocation fees owed to tenants in decommissioned buildings from thousands to hundreds of thousands. In response to the judge’s decision, the SFTU posted that the law passed its first test.

An attorney for Pacific Legal Foundation told reporters he is confident that landlords will ultimately prevail on constitutional grounds.

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