Legal Question in Real Estate Law in California

My brother and I own a duplex in San Francisco. In 2004, I leased out the building to a tenant with the stipulation that this tenant manage the building and take care of renting out the other unit as well. Effectively, this makes him (the tenant) responsible for the rent for both units. Despite only having signed the lease with me, this tenant pays two separate rent checks each month -- one to me and one to my brother. So both my brother and I have been collecting rental income for the last five years. Similarly, my brother and I also share all the expenses of owning this building -- taxes, repairs, insurance.

We are now in the process of trying to sell the duplex. My brother would like to evict the tenants to maximize the selling potential of the building. However, he now says that I am responsible for all the costs involved in evicting the tenants because I am the one who signed the lease and the one who rented the building out to the tenants. He claims that the burden of removing the tenant is solely mine.

This is my question: If my brother has been collecting rent checks for the last five years directly from the tenant and we have been sharing expenses, isn't the cost of evicting the tenant an expense that he and I should share as well?

I hope this makes more sense. Thanks.


Asked on 10/16/09, 8:56 pm

4 Answers from Attorneys

The scenario you have described appears to be a statutory general partnership. Although owning property together does not creat a partnership by itself, it appears the two of you have effectively conducted business as a partnership. The only unusual aspect is each collecting a part of the rent and then paying some of it back into the "pot" for expenses.

The piece that is still confusing is why only you are on the lease with the tenant. Technically it would seem you don't have the right to rent out the entire building. Without knowing how you hold title with your brother, it's hard to comment more than that, but it is an anomally.

In any case, I doubt you want to go to court with your brother over this, but if you had to, it appears that you have a de facto statutory partnership and he is liable to you for his half of all expenses, including eviction.

One last curiosity: Why are you anticipating much expense in the eviction? Are you expecting the tenants to fight it under some provision of the San Francisco rent control scheme?

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Answered on 10/16/09, 9:21 pm
George Shers Law Offices of Georges H. Shers

see my prior answer; tell me if it did not go through.

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Answered on 10/16/09, 9:36 pm
Melvin C. Belli The Belli Law Firm

I think your first and foremost problem would be in evicting the tenant without just cause which is required under the current San Francisco Rent Control Ordinances. You should consider that first before you try and probably fail to evict your tenant or tenants without just cause.

That is your real problem not who is going to pay the bill to evict them to sell the property.

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Answered on 10/17/09, 3:02 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Ready for one more answer? Why bother to evict the tenants? If the property is a duplex, the market will look at it as income property, and generally speaking, fully-tenanted income property is worth more and is easier to sell than property with a lot of vacancies. There may be an obvious reason to get rid of these particular tenants, of course, but none was mentioned in an otherwise rather thorough question.

Also, I'm a little less certain than Mr. McCormick about this being a statutory partnership. Sharing net rents from third-party tenants is a legal requirement for co-owners (tenants in common or joint tenants) and may only show compliance with that aspect of co-ownership rather than the intention to operate a business for profit as co-owners. The partnership question might be clarified by knowing how you came into joint ownership (inheritance is my guess and that's less likely to lead to a finding of partnership than if the two of you had gone out and purchased the building).

With co-owned real property, there is often a "cotenant in possession" (you) and a "cotenant out of possession" (your brother). You are "in posession" because you are the source of the tenants' rights to occupy their units. You do have the right to rent and it's coupled with the duty (mentioned above) to share the net rental income. I'd guess, without being certain, that you also have the right to decide whether to evict (or TRY to evict, see Mr. Belli's comments about that!) or not. In either case if your actions were both lawful and commercially reasonable, I think there is no basis to charge you with 100% of the costs, and this is true whether the analysis is made on the basis of a partnership or on the basis of the law governing a co-owner's interest in the net third-party rents of the cotenancy.

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Answered on 10/17/09, 6:48 pm


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