MINUTES OF THE REGULAR MEETING OF
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THE SAN FRANCISCO RESIDENTIAL RENT
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STABILIZATION & ARBITRATION BOARD,
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Tuesday, April 4, 2000 at 6:00 p.m. at
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25 Van Ness Avenue, Suite 70, Lower Level
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I. Call to Order
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President
Wasserman called the meeting to order at 6:11 p.m.
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II. Roll Call
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Commissioners Present: Becker; Bierly; Gruber; Justman; Lightner;
Marshall; Mosser; Murphy; Wasserman.
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Staff Present: Grubb; Wolf.
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Commissioner Hobson appeared on the record at 6:14 p.m.
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III. Approval of the Minutes
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MSC: To approve the Minutes of March 14, 2000.
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(Becker/Marshall: 5-0)
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Approval of the Minutes from the meeting on March 21st was put
over to the next meeting as some of the Commissioners had not had
a chance to read them.
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IV. Remarks from the Public
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Attorney Steve Rosenthal, involved in the case at 544 Clayton St.
(AL2K0023), stated his opinion that the Board should take advantage
of the presence of the parties at the time of an appeal consideration,
as the courts do, for purposes of eliciting additional information
and/or argument.
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V. Consideration of Appeals
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A. 309 Steiner St., Apt. D AL2K0016
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The tenant’s petition alleging an unlawful increase in rent from
$1,584.42 to $1,700.00 was granted and the landlord was found liable
to the tenant in the amount of $1,155.80. The Administrative Law
Judge (ALJ) found that the exemption contained in the Costa-Hawkins
Rental Housing Act for separately alienable condominium units was
inapplicable to this tenancy because the landlord allowed the tenant
to enter into this revolving roommate tenancy which commenced prior
to January 1, 1996; the tenant was not a sublessee or assignee but,
rather, a co-tenant who had a written agreement directly with the
landlord as of March 1997; and the tenant resided in the unit commencing
in September 1995. Additionally, it was determined that the landlord
waived his right to a market rent increase pursuant to Rules Section
6.14 because, after the last original tenant had vacated the unit,
the landlord imposed two annual rent increases and entered into
two new leases with the petitioner. On appeal, the landlord maintains
that: the tenancy or sub-tenancy was not approved by the landlord
until after January 1, 1996, and there was no express contractual
relationship between the parties until the signing of the 1997 lease;
since failure to timely serve a 6.14 notice results in the landlord
consenting to the tenancy, the service of a 6.14 notice on the instant
tenant indicates that the landlord did not consent to the tenancy;
and the rent increase was served pursuant to the provisions of Costa-Hawkins,
and the Administrative Law Judge had no authority to make a ruling
on the applicability of Rules Section 6.14.
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MSF: To deny the appeal. (Becker/Marshall: 2-3; Gruber, Justman,
Lightner dissenting)
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MSC: To accept the appeal and remand the case for a hearing to
determine whether the tenant was an approved tenant or sub-tenant
prior to January 1, 1996. (Becker/Lightner: 5-0)
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B. 1800-1806 - 16th Ave. AL2K0017
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The landlord’s petition for rent increases to the tenants in two
units based on comparables was dismissed. The tenants are beneficial
owners of the trust that was created by the will to own the property.
The Special Title-Holding Trustee and co-executors of the estate
intend to sell the property, and wish to begin collecting rent from
one of the tenants and raise the rent of the other in order to obtain
a higher sales price. The Administrative Law Judge found, however,
that the issue is not ripe for adjudication until the Probate Court
determines whether the decedent’s intent was to permit the beneficiaries
to occupy the property rent-free and/or whether the Special Title-Holding
Trustee has the power or authority to charge or raise the tenants’
rents. On appeal, the Trustee claims that: the Rent Board should
determine whether it has jurisdiction over this property or not,
and deciding that the issue is not "ripe" merely begs the question;
since the tenants meet the definition of "tenant" under the Ordinance,
all of the provisions of the law should apply, including those pertaining
to rent increases based on comparables -- otherwise, petitioner
should be free to remove the "non-tenant occupants" without Just
Cause; the ALJ misunderstood the provisions of the decedent’s will;
the Probate Court has already issued a final order in this matter,
and the concerns raised by the ALJ were not addressed; if the decedent
intended to establish life estates for the tenants, he would have
done so; and the case should merely be postponed so that the petitioner
can obtain a statement from the Probate Court.
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MSC: To recuse Commissioners Lightner and Becker from consideration
of this appeal. (Murphy/Gruber: 5-0)
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MSC: To find that the Rent Board has jurisdiction over this property
and to hold a hearing on the landlord’s comparables petition. (Murphy/Gruber:
3-2; Hobson, Marshall dissenting)
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C. 2246 - 47th Ave. AL2K0018
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The tenant’s petition alleging an unlawful increase in rent from
$!,030.00 to $1,800.00 was granted. The Administrative Law Judge
found that the increase was not warranted pursuant to the provisions
of Costa-Hawkins because, although the unit is a single family dwelling,
the tenant moved into an existing tenancy that pre-dated 1996; and
the landlord had a direct landlord-tenant relationship with the
petitioner, who was therefore not a subtenant or assignee. On appeal,
the landlord maintains that: the ALJ erred in finding that the tenant
was neither a subtenant nor assignee, which are the only two recognized
mechanisms for the transfer of a tenancy; that, since the last original
tenant broke the lease and evidenced no intent to retain any rights
to the tenancy, the instant tenant is an assignee of the prior tenant’s
rights and did not become a party to the pre-1996 lease; and subsequent
to the last original tenant having vacated the unit, the instant
tenant was no longer a co-tenant but, rather, a new tenant or assignee
of the prior tenant.
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MSC: To accept the appeal and remand the case to the Administrative
Law Judge on the record to find that the rent increase is valid.
(Lightner/Gruber: 3-2; Becker, Marshall dissenting)
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D. 1461 Hyde St. AL2K0019
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The tenant’s petition alleging an unlawful increase in rent from
$468.90 to $1,050.00 was granted because the Administrative Law
Judge found that the increase was not warranted under the provisions
of Costa-Hawkins nor Rules Section 6.14. The tenant moved into the
unit in 1981, but always paid her share of the rent to a family
member, who forwarded it to the landlord. It was therefore determined
that she was a lawful subtenant who resided in the unit prior to
January 1, 1996; and it is undisputed that the prior landlord knew
of her presence in the unit, but failed to give a notice pursuant
to Rules Section 6.14. On appeal, the landlord argues that: the
tenant was never approved by the prior or current landlord, and
is an unapproved subtenant; an owner should be allowed to raise
the rent, rather than evict, once the last original tenant has vacated
a rental unit; and Rules and Regulations Section 6.14 is inapplicable
because it was adopted 8 years after the tenant purportedly moved
into the unit.
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MSC: To deny the appeal. (Becker/Marshall: 3-2;
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Gruber, Lightner dissenting)
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E. 730 Stockton St. #43 AL2K0020
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The tenant’s petition alleging that the landlord had failed to
discontinue a capital improvement passthrough and included it in
base rent when calculating annual increases was granted and the
landlord was found liable to the tenant in the amount of $3,134.92.
Upon appeal by the landlord, the case was remanded to the Administrative
Law Judge to find that a rent increase given in 1990 was not null
and void if the amount did not equal more than the annual allowable
rent increase, even if the notice was technically defective. Accordingly,
in the Decision on Remand, the overpayment amount was reduced to
$2,364.90. After the landlord filed a Writ of Administrative Mandamus
on the grounds that he had been denied the right to cross-examine
the tenant regarding documents submitted post-hearing, the case
was reopened in order for him to do so. The Decision remained substantively
unchanged although amounts owing from the landlord to the tenant
were adjusted to account for offsets taken by the tenant. The landlord
again appeals, claiming that: the Findings in the Decision differ
in important respects from testimony given at the hearing; since
the tenant had not challenged the rent increase, the landlord should
not have the burden of proving it not to be excessive; the .78%
overage was most likely attributable to a PG&E passthrough;
and contradictions in the tenant’s testimony should impinge on his
credibility.
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MSC: To deny the appeal. (Marshall/Becker: 3-2; Gruber, Lightner
dissenting)
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F. 544 Clayton St. AL2K0023
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The tenants’ petition alleging a substantial decrease in housing
services due to the landlord’s failure to allow a replacement roommate
pursuant to Rules Section 6.15 was granted and the landlord was
found liable to the tenants in the amount of $2,000.00. The landlord
appeals, asserting that: the Decision is based on the recently enacted
"Leno" amendment to the Ordinance, which was not yet in effect;
the "Leno" amendment was not intended to be given retroactive application,
which would impair contractual rights and violate substantive due
process; the ALJ misinterpreted Rules Section 6.15; the Decision
is inconsistent with a recent ruling of the Rent Board Commissioners
in a substantially similar case; the tenants never had a right to
sublet the premises; and the applicable Statute of Limitations is
3 years, when the change in terms occurred over 7 years ago.
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MSC: To deny the appeal. (Becker/Marshall: 3-2;
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Gruber, Lightner dissenting)
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G. 131 Peralta Ave. AT2K0021
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The landlord’s petition for certification of the costs of a new
roof was dismissed without hearing pursuant to Rules Section 11.16(a).
The landlord had financed the work through a Code Enforcement Rehabilitation
Fund (CERF) loan, which does not incur interest, and for which there
are no required payments until title to the property changes. On
appeal, the landlord asserts that the special nature of the loan
should be taken into account, as the work was adequately documented
and programs such as these serve to maintain the rental housing
stock.
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MSC: To accept the appeal and remand the case for a hearing on
the petition. If the passthrough is approved, it shall be held
in abeyance until the debt is repaid, either through sale of the
property or refinancing. The passthrough, if any, shall be imposed
on these tenants only. (Becker/Gruber: 5-0)
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H. 656 O’Farrell #304 AT2K0022
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The landlord’s petition for certification of capital improvement
costs to the tenants in fourteen units was granted. The tenants
in 3 units appealed on the grounds of financial hardship and the
cases were remanded for hearing. The instant tenant’s claim was
partially granted, and the passthrough was reduced from $57.19 to
$30.00 per month, and the effective date was delayed until August
1, 2000. The tenant appeals the remand decision, claiming that:
he is turning 65 years of age in July and will be receiving SSI
as of that date; the landlord has refused to allow the tenant to
get a roommate to share the rent; and the tenant will soon be undergoing
major surgery, which may make it impossible for him to continue
working.
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MSC: To accept the appeal and remand the case for a hearing to
explore the issues raised on appeal. (Becker/Lightner: 5-0)
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VI. Communications
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In addition to correspondence concerning cases on the calendar, the
Commissioners received the following communications:
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A. The office workload statistics for the month of February,
2000.
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B. A copy of an Initiative being circulated by the Housing Rights
Committee which would limit capital improvement passthroughs.
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C. A letter from a tenant at the North Point Apartments regarding
retention of a rental deposit.
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VII. Director's Report
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Executive Director Grubb informed the Commissioners that Room 408
in City Hall has been reserved from 6:00 to 9:00 p.m. for the April
25th Public Hearing on proposed amendments to Rules and Regulations
Section 6.14. President Wasserman also asked that interpreters be
provided.
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VIII. Calendar Items
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April 11 & 18, 2000 - NO MEETINGS
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April 25, 2000
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6:00 Public
Hearing: Rules & Regs. Section 6.14/Costa-Hawkins
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(Room 408, City Hall)
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May 2, 2000
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8 appeal considerations (1 cont. from 3/21/00; 1 cont. from 4/4/00)
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XI. Adjournment
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President Wasserman adjourned the meeting at 8:30 p.m.
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