There have not been any landlord/tenant issues on the ballot for the last few years. And just when everything seems to be quiet, there is a controversial Proposition B on the June ballot. Prop. B reads: “Shall the City change its laws to require landlords who offer to sell buildings of two or more residential units to disclose to all potential buyers the specific legal grounds for any evictions that result in vacant units at the time of sale and whether the evicted tenants were elderly or disabled?”
Similar legislation was passed by the SF Board of Supervisors earlier this year and Mayor Gavin Newsom vetoed it. The Board of Supervisors is now attempting to get it passed by going to the voters.
At first reading, the measure seems innocent because who would not want more disclosures? The more buyers know about the property, the more informed they will be to make a decision. The measure fails because there are already existing mechanisms in place to provide this information.
As well, the wording of the legal text is extremely confusing and open to interpretation and abuse. The current standard of practice for selling properties in San Francisco is to have the disclosure package available to buyers for review prior to submitting an offer to purchase. State law also mandates that if a unit is delivered vacant, the legal reason for termination has to be disclosed.
Evictions are dealt with in these documents, and the buyers have 72 hours from receipt of the disclosure package to walk away from the transaction and terminate the contract – with no penalties whatsoever. This disclosure process and mechanism have worked well and there is no good reason to change the procedure.
The disclosure required by Prop. B would have to be made “in all marketing material and advertising, like a flier describing the property, which is made available to prospective purchasers at each open house and at any tour through the property.”
The problem with the language is that Prop. B does not require the disclosure to be delivered and signed by the purchaser, just that the material be “available.” So, if it’s not delivered to anyone and a prospective purchaser does not have to acknowledge receipt, how is the prospective buyer assured of getting the disclosure?
And how does the seller prove that he or she complied with the ordinance? The mechanics and language of the legal text won’t help buyers and sellers avoid potential problems. Also, who is the prospective buyer? There are times when an agent or a relative is looking at the property for the prospective buyer.
The actual buyer might never see the property before submitting an offer. With photos and virtual tours available on the Internet, we are actually seeing sales where the buyer never steps foot onto the property, so if the information is available at the property and the buyer never sees it, has the seller complied with the ordinance?
I believe that the ordinance is drafted very poorly and if approved, we will be spending much of our taxpayer’s money fighting it in court. There already are mechanisms in place with the real estate process for eviction disclosures.
I am voting “no” on Prop. B. But whatever you decide on this and other issues, please vote on June 6.
John M. Lee is a top selling agent at Pacific Union. If you have any real estate questions, call him at (415) 447-6231.