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SURREAL ESTATE
Walk the Property Line written by J USTIN A. GOODM A N
Owners must be well-informed in creating rights of possession—and make cautious choices when trying to regain property.
W
hile property ownership (the “fee simple absolute”) has historically been the supreme form of property right, the leasehold has had many of its benefits. The owner’s “bundle of rights” includes the right to use, transfer, encumber, and occupy. But during the leasehold, the lessee enjoys the most important one—the right to occupy. There are barriers to entry for property ownership, but the lessee acquires this right at a much lower cost, generally just the obligation to pay a negotiated rent. A landlord can use this rent to pay the property’s costs (like financing, taxes, insurance, and upkeep), but if a lessee stops paying rent while maintaining occupancy, the landlord has an urgent problem. In the early nineteenth century, the landlord had common law rights and remedies (like the right to enter and expel the tenant by force). That seems unthinkable today, and part of the reason is that the legislature created the fastest civil proceeding (the “unlawful detainer” action) to recover possession. A balance was struck where the landlord could speedily recover possession,
30 APRIL 2023 | SF APARTMENT MAGAZINE
ignoring other disputes among the parties, while the lessee received due process and an undisturbed right of possession until it was awarded to the landlord. However, in recent years, tenants have grown increasingly adept at slowing the speedy remedy to a crawl: tenants dodge service, challenge the complaint to delay their answer, and then overload their answer with meandering affirmative defenses. They bombard with discovery, demand a jury, appeal the result if they lose, and seek a stay of eviction pending appeal. Of course, any defendant is entitled to do all these things; it’s just that San Francisco tenants don’t have to weigh costs and benefits. Their attorneys are free, so the cost is zero, and the delay is a benefit in itself. Thus, even when the system functions normally, it operates to give the tenant the most significant benefit—possession—unless and until the landlord pays them to acquiesce to what should be inevitable. Other circumstances, though they don’t involve a tenant, will still justify the streamlined unlawful detainer procedures, like when someone was merely licensed to occupy property, their occupancy had been tied to their
former employment, or even where an owner was already in lawful possession, but someone broke in or used force to drive them out. This latter situation sounds a lot like a crime, and you’d think the local police would just say something folksy like, “We’ll take this rascal down to the station, y’all have a good evening” while escorting the owners back in. But the police department will usually err on the side of caution and conclude, “This is a civil matter,” meaning the “squatter with a story” now gets due process before dispossession. As a lawyer who represents landlords, I don’t believe that possession is really nine-tenths of the law, but it’s easily ninety percent of the benefit. And if the tenant in possession has a benefit superior to the landlord, sometimes an occupant with inferior rights can muster an even more formidable claim to possession. Some particularly strained examples: A “tenant” applies for a unit, passes the application process, and moves in. The “tenant” stops paying rent. The landlord can’t evict for non-payment (because of a COVID-19 moratorium) and looks for other options to avoid losing the property. An investigation reveals that the “tenant” is an identity thief (who is therefore undeterred even by the threat of a money judgment ruining their credit). One solution is