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be sent to tenants telling them that their landlord subsequently rescinded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.
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.
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.
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:
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.