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April 03, 2001

April 03, 2001

 

 

 

MINUTES OF THE REGULAR MEETING OF

THE SAN FRANCISCO RESIDENTIAL RENT

STABILIZATION & ARBITRATION BOARD,

Tuesday, April 3, 2001 at 6:00 p.m. at

25 Van Ness Avenue, Suite 70, Lower Level

    I. Call to Order

    President Wasserman called the meeting to order at 6:10 p.m.

    II. Roll Call

                  Commissioners Present: Becker; Gruber; Hobson; Lightner; Marshall; Mosser; Wasserman.

                  Commissioners not Present: Justman.

                  Staff Present: Lee; Wolf.

    Commissioner Aung appeared on the record at 6:16 p.m.; Commissioner Murphy arrived at the meeting at 6:39 p.m. Commissioner Mosser went off the record at 8:20 p.m.

    III. Approval of the Minutes

          MSC: To approve the Minutes of March 20, 2001 with the following correction: under Old Business, Ellis Rescission, to reflect that Commissioner Lightner was not suggesting that a letter be sent to tenants telling them that their landlord subsequently rescinded the notice of intent to withdraw, and informing them that they might have a claim for wrongful eviction but, rather, that this was existing policy. (Becker/Lightner: 5-0)

    IV. Remarks from the Public

      A. Landlord Lisa Ng asked questions concerning Rent Board jurisdiction over a single family dwelling that has occupied rooms in the basement pursuant to Costa-Hawkins.

      B. The attorney for the new landlords involved in the case at 2631 Ortega (AL020030), Robert Peterson, III, informed the Board that the new owners have authorized the prior owner to file the appeal in this matter. He asserted that laches should bar the tenant’s recovery, and said that, since the landlord denied that he received notice from the tenant, notice was not "verifiable."

      C. The tenant in the case at 935 Geary #208 (AT010031), Robin Krop, asked certain procedural questions pertaining to her appeal.

      D. Richard Yan, the prior owner of the property at 2631 Ortega (AL020030), asked the criteria for the Board’s accepting appeals and scheduling remand hearings.

    V. Consideration of Appeals

    A. 3311 - 20th St. AL010026

    The tenant’s petition alleging an unlawful increase in rent from $1,268.00 to $3,950.00 was granted. The Administrative Law Judge found that the tenant, although not a signatory to the original lease agreement, moved in at the commencement of the tenancy and was an original occupant who took possession of the unit pursuant to the October 1, 1996 rental agreement. Additionally, two previous management companies accepted the entire monthly rent from the tenant over a three year period and otherwise treated the tenant as a co-tenant. Therefore, the tenant was found not to be a sub-tenant subject to a Costa-Hawkins rent increase when the last of the original occupants vacated the unit. On appeal, the landlord maintains that: the tenant was a subsequent occupant who did not occupy the premises prior to January 1, 1996 and came into possession of the unit after the named occupants in the written lease; the tenant never entered into an agreement with the prior owners for occupancy of the premises; the original lease signatories were the only persons who had an agreement with the owner on the date of execution of the relevant rental agreement, and the tenant did not move in to the unit until after that time; the tenant cannot be a "co-tenant" since her agreement was with the other tenants in the unit, and not with the owner; and acceptance of rent from the tenant did not operate as a waiver because the owner had not received written notice and thereafter accepted rent.

          MSC: To deny the appeal. (Becker/Marshall: 3-2; Gruber, Lightner dissenting)

    President Wasserman wished the record to reflect that she did not find the argument that the tenant was an original occupant compelling, nor was the lack of a 6.14 notice dispositive in this case. Commissioner Wasserman also felt that the mere acceptance of rent was not sufficient to make the petitioner a tenant. Rather, it was the combination of accepting rent from her for two years and naming the petitioner on two annual rent increase notices that made her a tenant.

    B. 1736 Polk #120 AT010025

    The tenant’s petition alleging an unlawful increase in rent was granted and a proposed increase from 450.00 to $750.00 was found to be unlawful. The tenant had moved in at an original base rent of $180.00, which amount was reduced to $50.00 because the tenant performed repair services for the prior landlord. The Administrative Law Judge found that, with proper notice, the new owner may increase the tenant’s rent to $300.06 - the $180.00 initial base rent plus allowable annual and banked increases. The landlord appeals, asserting that: the tenant was not credible in his testimony; the tenant failed to prove that he had been paying $50.00 in rent; the tenant commenced occupancy of the unit as the building manager, and not as a tenant; the Administrative Law Judge exhibited bias toward the tenant and ignored unbiased testimony of the former building manager; and the Decision is unfair, presents a hardship to the landlord and does not promote the policies and purposes of the Ordinance.

          MSC: To recuse Commissioner Aung from consideration of this appeal. (Becker/Lightner: 5-0)

          MSC: To deny the appeal. (Becker/Marshall: 3-2; Gruber, Lightner dissenting)

    C. 2631 Ortega AL010030

    The tenant’s petition alleging decreased housing services was granted and the landlords were found liable in the amount of $14,800.00 due to long-standing habitability defects on the premises. Additionally, $3,000 in rent overpayments were determined to be owing from the landlords to the tenant. On appeal, the landlords maintain that: the 3-year Statute of Limitations found in the Code of Civil Procedure should apply to this case; the tenant failed to prove that there was long-term verifiable notice to the landlords of the conditions; the tenant remedied the problems with the garage and rear doors by engaging in self-help; and the amounts granted were arbitrary and not supported by the evidence.

          MSC: To accept the appeal and remand the case to the Administrative Law Judge only to find that the first verifiable notice to the landlord of the conditions was with the issuance of the Notice of Violation from the Department of Building Inspection, and to adjust the amount of the rent reductions accordingly. (Lightner/Gruber: 4-1; Becker dissenting)

    D. 935 Geary #208 AT010031

    The tenant’s petition alleging a substantial decrease in services was denied because the Administrative Law Judge found that the landlord had acted promptly and reasonably to address the infestation of bedbugs in the tenant’s room, and that the tenant had been totally compensated for the two-week period between notice of the problem and the landlord’s amelioration efforts. The tenant appeals, claiming that she should receive a rent reduction for the 11-week period when she suffered from the problem, but had not yet informed management of the hotel.

          MSC: To deny the appeal. (Lightner/Gruber: 5-0)

    E. 2850 - 21st St. AL010033

    The tenant’s petition alleging unlawful rent increase was granted and the landlord was found liable to the tenant in the amount of $9,765.00 because the Administrative Law Judge found that the landlord’s agents knew that the unit was being used as a residence, rather than a commercial space. On appeal, the landlord argues that: the landlord did not raise or charge rent to the petitioning subtenant and only accepted rent on behalf of the master tenant, so that the subtenant is not entitled to rent refunds; and the Rent Board does not have jurisdiction over this case, since neither the master or subtenant were residential tenants.

          MSC: To deny the appeal. (Lightner/Gruber: 5-0)

    VI. Communications

    In addition to correspondence concerning cases on the calendar, the Commissioners received a letter from the landlord involved in the case concerning 1718-1722 Bryant St. (L2K1370), asking that the Board reconsider their denial of his appeal or specify the basis for the denial.

    VII. Director’s Report

    In the absence of Executive Director Grubb, Senior Administrative Law Judge Tim Lee provided the Board with an update as to the status of the Quigg litigation concerning Proposition H. Pursuant to the Board having passed regulations to implement the Proposition, the City Attorney filed a Motion for Summary Judgment and to Dissolve the Preliminary Injunction on March 28th. Two Complaints in Intervention have been filed by the landlords in the cases concerning Marina Cove and Lombard Place Apartments. A hearing that had been scheduled for April 25th was taken off the calendar and continued to May 11th in order to give the Intervenors time to respond to the City’s Motion for Summary Judgment and to file Cross-Motions for Summary Judgment. While the Intervenors’ Complaints challenge the legality of the Moratorium on processing of capital improvement petitions as well as the merits of Prop. H, no TRO or Motion for Preliminary Injunction has been filed.

    VIII. Old Business

    Ellis Rescission

    The Board continued their discussion of the problem of owners rescinding Ellis notices of withdrawal prior to the recording of a Notice of Constraints against the property. By so doing, an owner is free to re-rent the vacated units at market rent, thereby obtaining the benefits of an Ellis eviction without any of the burdens. In the past, it has been staff’s practice to allow an owner to rescind an Ellis notice of withdrawal in two circumstances: 1) after the effective date of withdrawal, only upon a showing that one or more of the existing tenancies was continuing; and 2) prior to the effective date of withdrawal, without any showing as to the status of the existing tenancies. In three recent cases, owners served Ellis eviction notices and filed notices of intent to withdraw with the Rent Board. After the owners negotiated move-out settlement agreements with the tenants in which the tenants waived all rights under the Rent Ordinance and the Ellis Act, the owners requested to rescind the Ellis notices prior to the effective date of withdrawal. Staff had therefore recommended that rescission should only be allowed upon a showing that one or more of the existing tenancies was not terminated so that the owner did not in fact withdraw all units from the rental market.

    During the Board’s discussion of this proposal at the meeting on March 20th, Commissioner Wasserman expressed concerns that the policy regarding rescission of an Ellis notice of withdrawal had been silent, but was known to practitioners in this area. It was the consensus of the Board, therefore, that owners in the three pending cases should be allowed to rescind, but staff will make the public aware that the Board is considering changing the prior policy regarding rescission. At that meeting the Board debated the question of how many units should be required to remain in place in order to allow rescission, and whether the amount of money the displaced tenant received pursuant to settlement with the landlord should make any difference. As there was no consensus on this question, Senior Administrative Law Judge Tim Lee was asked to draft a regulation without specifying the number of units, to be discussed at the next meeting, and possibly put out for Public Hearing thereafter.

    At this evening’s meeting, the Board discussed a Memorandum prepared by Mr. Lee and Senior Administrative Law Judge Sandy Gartzman, which outlined three options: 1) after a Notice of Intent to Withdraw has been filed, the notice may not be rescinded unless the owner proves that none of the existing tenancies were terminated as a result; 2) rescission would be allowed if not all of the existing tenancies were terminated; or 3) rescission would be allowed if a certain percentage of the existing tenancies, to be decided by the Board, were terminated as a result of the Ellis filing.

    Commissioner Lightner expressed her concern that if owners couldn’t rescind and make deals with their tenants, the Board could be pushing rental units off the market. She wondered if guidelines for fair deals wouldn’t be better. Commissioner Wasserman suggested the possibility of the Board conducting "fair settlement hearings." Commissioner Becker felt that this was tantamount to legitimizing a "business deal" as a just cause for eviction. Commissioner Aung pointed out that there are not enough attorneys for all tenants faced with an Ellis eviction to be represented by counsel, especially considering the lack of defenses. Commissioner Mosser believes that the laws of supply and demand make it better to have units not taken off the market, which just drives rents up.

    Considering the lack of unanimity on the Board for any of the approaches, and the complexity of the issue, the Commissioners decided to obtain input from the public and practitioners in this area. Since it is questionable as to whether the Board can enact regulations regarding Ellis, any proposal adopted would be to establish administrative policy. In addition to the three options outlined in the Memorandum from staff, a fourth option was added, which would require that at least one of the existing tenancies remains in place and all other tenancies vacated pursuant to a fair settlement. The Board then voted as follows:

          MSC: To put out for Public Hearing four proposed Administrative Policy options regarding the circumstances in which rescission of an Ellis filing would be allowed. (Lightner/Gruber: 5-0)

The Public Hearing on this issue will be held on May 1st at 6:30 p.m.

    IV. Remarks from the Public (cont.)

      E. Landlord Kaushik Dattani, involved in the case at 3311 - 20th St., (AL010026) commended the Board for the hard work they obviously put in, but strongly suggested that the Commissioners listen to the transcripts of hearings before deciding on the merits of appeals.

      F. Tenant Robiin Krop of 935 Geary St. #208 (AT010031) "applauded" the Board but said that the Commissioners failed to address her concerns. She explained that she couldn’t give notice of the pest infestation to the management of her hotel, since she didn’t know what the problem was for quite some time. She also said that the problem with the bedbugs has recurred.

    IX. Calendar Items

      April 10 & 17, 2001 - NO MEETINGS

      April 24, 2001

      5 appeal considerations
      Old Business:
      Proposed Amendments to Sections 1.21 & 6.15(c)(3) of the Rules
      New Business:
      Effective Date of Moratorium

    X. Adjournment

    President Wasserman adjourned the meeting at 8:35 p.m.

Last updated: 10/9/2009 11:26:12 AM