Buying a Tenant-Occupied Home Under SF Rent Control

When you buy a tenant-occupied home in San Francisco, you buy the tenancy too. The tenant's rent, lease and every protection under the Rent Ordinance survive the sale unchanged, and "the tenant will leave at close" is a promise the seller usually cannot make. Before you write on a 2-4 unit building, a house with an in-law, or a condo with a renter, you need to know what you can lawfully do, what it costs and how long it takes.

What the Rent Ordinance covers

The ordinance does two separate things. Rent increase limits (rent control) apply to units in buildings with a certificate of occupancy before June 13, 1979, and the allowable annual increase is set at 60% of the Bay Area CPI change, which the Rent Board announced as 1.6% for March 1, 2026 through February 28, 2027 (confirm on its current rates page). A landlord must register the property with the Rent Board's housing inventory and obtain a rent increase license before imposing any increase. A 2024 ordinance would move the cutoff date forward to 1994, but only if the state's Costa-Hawkins Act is repealed or amended, which has not happened.

Just-cause eviction protections are broader. Since Ordinance 296-19 took effect in 2020, every residential rental unit in the city is covered regardless of construction date, so you need one of the ordinance's listed reasons to end any tenancy.

Costa-Hawkins: houses and condos

The state Costa-Hawkins Act exempts single-family homes and condominiums from local rent increase limits. But it does not touch eviction rules: in SF a tenant in a house or condo still has just-cause protection, so the only lawful ways to recover the unit are the ordinance's listed grounds, chiefly an owner move-in, a buyout or the Ellis Act.

Tenant rights survive the sale

On the day you record, you hold every obligation the seller had: the tenant's current rent, their security deposit (which the seller must transfer to you), their lease terms, any oral agreements the seller honored, and the full set of ordinance protections. A month-to-month tenant after an expired lease has exactly the same protections as one mid-lease.

Owner move-in evictions

An owner move-in (OMI) is the lawful path to occupying a tenant's unit yourself, and it is narrower than sellers suggest:

• Ownership. You need at least a 25% interest in the property (10% for interests recorded before February 21, 1991).
• Intent and duration. You or a qualifying relative (child, parent, grandparent, grandchild, sibling, spouse or domestic partner) must move in and live there as a principal residence for at least 36 continuous months.
• Notice. The notice must state the relocation payments owed and be filed with the Rent Board, with proof of service, within 10 days of serving the tenant.
• Relocation. For notices served March 1, 2026 through February 28, 2027, $8,245 per tenant, capped at $24,733 per unit, plus $5,497 for each tenant who is 60 or older, disabled, or in a household with a minor child. Figures adjust every March 1; confirm the current amounts on the Rent Board's rates page.
• One unit per building. Once you use an OMI on a unit, that unit is designated as the owner's unit for future OMIs, so you cannot move through a building unit by unit.
• Protected tenants. In buildings with two or more units, tenants who are 60 or older or disabled with at least 10 years of tenancy, or catastrophically ill with at least 5 years, generally cannot be evicted for an OMI, with narrow exceptions (for example, when the unit is the only rental you own in the building). Tenants must assert protected status within 30 days of a written request with supporting evidence.
• School year. No OMI may take effect during the school year against a household with a child under 18 and at least 12 months of tenancy.
• Re-rental limits. For notices served since January 1, 2018, if the unit is offered for rent within five years of the notice it must first be offered to the displaced tenant, with a copy of the offer filed with the Rent Board, and the rent charged to any tenant in that five-year window is capped at what the displaced tenant would have paid plus allowable increases; confirm the current terms with the Rent Board.

A failed or bad-faith OMI exposes you to wrongful eviction damages. Get the tenant's age, tenure and household composition from the seller in writing, and have an attorney confirm eligibility before you write a non-contingent offer. Seller rent-back covers the different case where the seller stays after close.

Buyouts

A buyout is a negotiated payment for the tenant to leave voluntarily, and SF regulates the process under Section 37.9E: the landlord must give each tenant the Rent Board's pre-buyout disclosure form before any discussion, file a declaration of service with the Rent Board, and file the signed agreement with the Rent Board between 46 and 59 days after it is signed. The tenant may cancel within 45 days of signing, and an agreement that skips the required steps can be rescinded at any time. A buyout can also affect the building's eligibility for condo conversion under the Subdivision Code.

Realistic numbers: a SocketSite compilation of the 2022 Rent Board filings put the average at about $35,700 per tenant and $53,800 per agreement, with a very wide range; the Rent Board recorded 353 agreements in 2025 (up from 278 in 2024) and publishes an annual report and an open dataset of the amounts on DataSF, so check the latest. If your plan depends on a buyout, price it at the high end and assume it may not happen at all. Renting and selling after you buy covers managing a tenancy you keep.

Estoppels, rent rolls and leases

Before you remove contingencies on any tenant-occupied property, get:

• Leases and any amendments for every unit, plus written confirmation of any oral agreements.
• A rent roll showing current rent, deposit, move-in date and payment history.
• Estoppel certificates signed by each tenant confirming rent, deposit, lease dates, prepaid rent, side agreements and claims. Tenants are bound by what they sign, which is why lenders want them.
• Rent Board history: any petitions, buyout filings, or eviction notices on the property, including no-fault evictions that trigger five- or ten-year waits under the unit legalization program.
• Household details relevant to protected status: ages, tenure, disability claims, children.

Any gap between the seller's rent roll and the estoppels is a negotiation item at best and a sign of a problem tenancy at worst. Contingencies explains how to keep this review period without losing the deal.

Price, loan, insurance, and the Ellis Act

Tenants change your numbers three ways. Price: a unit with a long-term tenant far below market sells at a discount to a vacant one, visible when you run the address and its vacant comps through the comps tool. Loan: Fannie Mae allows 5% down on an owner-occupied 2-4 unit building (since late 2023, with exclusions) and lenders count a share of documented rent, but claiming owner-occupancy means you must actually be able to occupy a unit, which brings you back to the OMI rules. Insurance: a tenant-occupied property needs a landlord policy; see homeowners insurance.

The Ellis Act is the state law that lets an owner withdraw an entire building from the rental market. It requires 120 days' notice, or one year for tenants 62 or older or disabled, relocation payments that for 2026-27 are $11,110.05 per tenant, capped at $33,330.13 per unit, plus $7,443.90 for each tenant who is 62 or older or disabled (confirm on the Rent Board's rates page), and it imposes re-rental restrictions on the building for ten years, with damages exposure for re-renting within two years. It is all-or-nothing, slow and costly, and almost never the right tool for a buyer who wants one unit to live in.

What to shop for right now

The one service worth shopping at this point is a landlord-tenant attorney consultation. Fees vary widely by firm, and a flat-fee hour before you remove contingencies is cheap next to a wrongful eviction claim or a protected tenant discovered after close. Send the leases, rent roll, estoppels and Rent Board history ahead so the hour produces answers: can I do an OMI, when, at what cost, and will a buyout work. When you need a real estate attorney covers how to find one; if you work with one of this site's agents, the buyer-side commission is how the site is paid, and the attorney is yours to choose.