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August 03, 1999

August 03, 1999
CORRECTED
MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,

Tuesday, August 3, 1999 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 6:05 p.m.

II. Roll Call

Commissioners Present: Bierly; Gruber; Justman; Lightner; Marshall; Mosser; Murphy; Wasserman.

Commissioners not Present: Becker.

Staff Present: Wolf.

III. Approval of the Minutes MSC: To approve the Minutes of July 20, 1999.

(Marshall/Gruber: 4-0)

IV. Remarks from the Public Members of the public addressed the Board as follows below:

A. A gentleman stated that it would be helpful to have printed instructional material regarding the appeals process.

B. A woman stated that she had sent faxes to the Rent Board office on two occasions and received no response.

C. A tenant appellant questioned the depiction of the issues in his appeal on the Agenda.

D. A gentleman asked if the Board’s scheduled meeting times could be updated on the "Information-to-Go" system.

E. A tenant appellant said that she was unable to obtain an answer to her question because she could not call in to the Rent Board office after the phone lines are closed at 4:00 p.m.

V. Consideration of Appeals

A. 2517 Cabrillo T002-08R

The landlord’s petition for certification of the costs of a new roof to the two units in the building was granted, resulting in a monthly passthrough in the amount of $23.32. One tenant appeals, claiming that: a cost breakdown and permit for commencement of the work were not furnished by the landlord; the DBI failed to inspect the work until two years after completion; the new roof was necessitated by the landlord’s deferred maintenance; and the landlord has failed to provide handrails in the bathroom nor allow installation of a washer/dryer, which are needed because one of the tenants in the unit is disabled.

MSC: To deny the appeal. (Lightner/Gruber: 4-0)

B. 1935 Franklin St. #503 T001-70A

(cont. from 7/6/99)

The tenants’ petition alleging an unlawful rent increase from $930 to $1,650.00 per month was granted. The tenants had switched apartments with the tenants in another unit in the building and created an assignment of the tenancies at the same rent with the consent of the prior resident manager of the building. Therefore, the hearing officer found the tenants to be "original tenants" within the meaning of Rules and Regulations Section 6.14. On appeal, the landlord asserts that: pursuant to the provisions of Civil Code Section 1954.53 (Costa-Hawkins), the landlord has the right to increase the rent because the tenants did not occupy the rental unit prior to January 1, 1996; a landlord’s knowledge or consent to an occupancy is not consent to a rent level as the issues are separate and distinct and the tenants cannot assign a statutory right held by the owner; the tenants in this case engaged in a concerted effort to obtain a larger apartment without having to pay market rent for the unit; and the hearing officer failed to make the tenants meet their burden of proving the rent increase to be unlawful but, rather, put the onus on the landlord to prove that the increase was lawful. On July 20th, the Board continued consideration of this case due to the lack of a voting majority.

MSC: To recuse Commissioner Lightner from consideration of this case. (Gruber/Murphy: 4-0)

MSC: To accept the appeal and schedule a Board hearing on the issues of the apparent authority of the agent and waiver pursuant to Costa-Hawkins (Civil Code Section 1954.53). (Murphy/Gruber: 3-1; Justman dissenting)

C. 3414 - 25th St. #1 T001-95R

(cont. from 7/20/99)

The tenant’s petition alleging decreased housing services was dismissed because the tenant, who does not speak English, appeared for two mediations unaccompanied by a translator after having been informed it would be necessary for her to procure one. On appeal, the tenant asserts that the first mediation session did not proceed because the landlord was unprepared; that the Rent Board was obligated to procure the services of a translator for the tenant; and that the grounds for dismissal contained in Rules and Regulations Section 11.16 are not present in this case.

The Commissioners continued consideration of the tenant’s appeal so that the Department could ascertain from staff exactly what the tenant was told concerning translation issues and her hearing. After discussion, consideration of this case was continued to the August 17th meeting, when a voting quorum will be present.

D. 730 Stockton St. T001-72A

(cont. from 7/20/99)

The tenant’s petition alleging unlawful rent increases was granted and the landlord was found liable in the amount of $3,134.92 because a capital improvement had been included in base rent and had not been discontinued upon having been amortized. The landlord’s appeal was accepted in order for a rent increase that was within the annual increase limitations but technically defective to be corrected, and not declared null and void. The resulting liability to the landlord was reduced to $2,364.90. The landlord appeals the remand decision, claiming that the hearing officer misapplied the banking provisions of the Rules and Regulations; that the landlord did not have a chance to cross-examine the tenant regarding evidence of the unlawful rent increase; and that the hearing officer is biased against him. At the July 20th meeting, the Commissioners agreed to continue the consideration to the next meeting when more voting members would be in attendance.

MSC: To deny the appeal.

(Marshall/Justman: 3-1; Gruber dissenting)

E. 52 Darrell Place #A T002-03R The landlords’ petition for certification of capital improvement costs to four units was granted, in part. The tenant in one unit appeals the equal allocation of the costs of painting and roof work, maintaining that allocation should be based on the square footage of the units, because his unit is approximately 1/3 the size of the other units in the building.

MSC: To deny the appeal. (Lightner/Gruber: 4-0)

F. 3149 California St. #2E T001-75A The tenant’s petition alleging intermittent and inadequate heat in the unit was granted, in part, and the landlord was found liable to the tenant in the amount of $275.00. On appeal, the landlord maintains that the Decision contains misstatements of fact and errors of law; that, if the tenant’s allegations were true, other tenants in the building would have complained; that a Notice of Violation from the DBI had to do with conditions that did not affect the supply of heat to the unit; and that the tenant should not be considered credible, in light of a history of harassment toward management and other tenants in the building.

MSC: To accept the appeal and remand the case to the hearing officer for a hearing in order for the tenant to meet her burden of proving the heat to have been deficient; and, if she fails to do so, to deny the petition.

(Lightner/Gruber: 3-1; Marshall dissenting)

G. 2360 Pacific Ave. #203 T002-04R The landlords’ petition for certification of capital improvement costs for eight of twenty units was granted, in part. Two tenants in one unit appeal the passthrough for the costs of new windows to their unit, claiming that the window work only benefited the units on the front (south) side of the building; that the work was in the nature of repair; and that the work does not meet the definition of a capital improvement.

MSC: To deny the appeal. (Gruber/Lightner: 4-0)

H. 2850 - 23rd St./2490 Bryant T001-81A The tenant’s petition alleging unlawful rent increases was granted and the landlords were found liable to the tenant in the amount of $3,200.00. On appeal, the landlords maintain that the subject unit was designed, constructed and used for commercial purposes, has no residential amenities, and is therefore exempt from Rent Board jurisdiction; that 50% of the rent for the space is paid by the tenant’s employer because it is used by the tenant as an office; that the subject unit is completely separate from the adjoining residential unit; that there was a separate agreement and separate rent paid for the subject unit; and that the hearing officer exceeded her authority by ordering the refund of rent overpayments, since the tenant specifically stated that he was not seeking such relief.

MSC: To accept the appeal and schedule a hearing before the Board. (Lightner/Gruber: 3-1; Marshall dissenting)

I. 835 Turk St. T002-07R The tenant’s petition alleging a substantial decrease in housing services was denied because the hearing officer found that the tenant had failed to meet his burden of proof. The tenant appeals, alleging that there are many discrepancies in the decision; that the landlord only repaired the leak in the bathroom ceiling after he contacted the DBI; and that the hearing officer should not have found the landlord and the landlord’s witness to be credible, in the face of contradictory evidence submitted by the tenant.

MSC: To deny the appeal. (Gruber/Lightner: 4-0)

J. 461 Elmira St. T001-76A The tenants’ petition alleging a substantial decrease in housing services because of the landlords’ revocation of the right to sublet was granted and the landlords were found liable to the tenants in the amount of $4,100.00. On appeal, the landlords claim that the hearing officer miscalculated the dates during which the housing service was reduced because the landlord orally reinstated the tenants’ right to sublet at the hearing in this case.

MSC: To deny the appeal. (Justman/Marshall: 3-1;

Gruber dissenting)

VI. Communications In addition to correspondence concerning cases on the calendar, the Commissioners received the following communications:

A. A copy of the Court of Appeal opinion in the case of Golden Gateway v. S.F. Rent Board (Superior Court Case No. 982216; Court of Appeal Case No. A083297).

B. A letter from a tenant who lives at the Marina Cove Apartments (1550 Bay Street) concerning the large capital improvement passthrough that has been petitioned for by the landlord.

C. A copy of an article in the July 30th Daily Journal reporting that Judge David Garcia upheld the constitutionality of Proposition G in the case of Cwyner v. City and County of San Francisco (Superior Court Case No. 302014).

D. Letters from Supervisor Mark Leno to Commissioners Lightner and Becker, congratulating them on their reappointment.

VII. Director’s Report In the absence of Executive Director Grubb, Deputy Director Wolf informed the Board as follows:

A. The Hearing Officer and Senior Hearing Officer positions have been reclassified. Their new job titles, Administrative Law Judge and Senior Administrative Law Judge, took effect as of July 1st. The Department is asking that the City Attorney draft an Ordinance for the Board of Supervisors, changing the language in the Rent Ordinance. At the request of the Deputy Director, the Commissioners passed the below motion:
 

MSC: At the time that the designation "Hearing Officer" is changed to "Administrative Law Judge" in the Rent Ordinance, staff shall conform the Rules and Regulations accordingly. (Marshall/Lightner: 4-0)   The Commissioners expressed their unanimous congratulations to the Administrative Law Judges, and Senior Administrative Law Judges, for this well-deserved and long overdue promotion.

B. Legislation sponsored by Supervisor Leno regarding changes of roommates in the presence of an absolute prohibition against subletting was passed out of the Housing and Land Use Committee of the Board of Supervisors today without recommendation. It will go before the full Board of Supervisors for First Reading on Monday, August 9th.

C. There will be a delay in the Commissioners’ per diem reimbursement for Board meetings in June; July payments come out of the budget for the new fiscal year and will be timely. The Commissioners requested that the issue of compensation for Board meetings be placed on the Agenda for the next meeting.

VIII. Old Business

A. "De Minimus Rule"

Commissioner Wasserman, with the assistance of Deputy Director Wolf and Senior Administrative Law Judge Tim Lee, proposed amending Rules and Regulations Sections 4.10(b) and 4.12 as follows below (new language underlined):
  Section 4.10 Notice   (b) "Any rent increase which does not conform with the provisions of this Section shall render the entire rent increase null and void, unless the amount requested equals no more than the allowable annual and banked rent increase(s), provided, however, that in the event such increases are given in a good faith effort to comply with the Ordinance and Regulations and do not exceed limitations by more than one-half of one percent of the prior base rent, Hearing Officers shall readjust the base rent to reflect the proper percentage increase."   Section 4.12 Banking
  (a) A landlord who refrains from imposing an annual rent increase, or any portion thereof, may accumulate said increase and impose that amount on or after the tenant’s subsequent rent increase anniversary date; however, the rent may be increased only one time every twelve (12) months. This banked amount may only be given at the time of an annual increase. Only those increases which could have been imposed on, or subsequent to, April 1, 1982, may be accumulated. A full 12 months must have elapsed from the date that an annual rent increase, or a portion thereof, could have been imposed before this banking section becomes applicable. Banked increases shall not be compounded and shall not be rounded up; provided, however, that in the event that a banked rent increase exceeds limitations by no more than one-half of one percent of the prior base rent and such increase was given in a good faith effort to comply with the Ordinance and Regulations, Hearing Officers shall readjust the base rent to reflect the proper banked amounts."  
MSC: To put the proposed amendments to Rules and Regulations Sections 4.10(b) and 4.12 out for Public Hearing. (Justman/Lightner: 4-0)
B. Interest Rate When Capital Improvement Work is Financed With a Variable Rate Mortgage The Board continued their discussion of a proposal by Commissioner Lightner to raise the rate of interest allowed landlords who finance capital improvement work with a variable rate loan, since the imputed interest rate is currently less than the "teaser" rate on such loans. In conjunction with a proposal to raise the "cap" on interest from the current 10% to 12%, Commissioner Wasserman had requested information as to where interest rate indexes have been historically. At the meeting, Commissioner Lightner distributed such information for the years 1982 to 1995. At the request of Commissioner Marshall, due to the fact that the information had not been received prior to the meeting, this issue was continued to the meeting on August 17th. C. Rules and Regulations Sections 6.14 and 6.15 Commissioner Lightner distributed a draft amendment purporting to conform Rules Section 6.14 to the requirements of the Costa-Hawkins Rental Housing Act (Civil Code Section 1954.53) Discussion of this issue was continued to the August 17th Board meeting. IV. Remarks from the Public (cont.) A member of the public inquired as to which of the Commissioners were voting and which were alternate members, and asked as to the qualifications for becoming a Commissioner. IX. Calendar Items August 10, 1999 - NO MEETING

August 17, 1999

10 appeal considerations (1 cont. from 7/20/99; 1 cont. from 8/3/99)

Executive Session: Golden Gateway

Old Business:

A. Interest Rate When Capital Improvement Work is Financed With a Variable Rate Mortgage

B. Rules and Regulations Sections 6.14 and 6.15

C. Commissioner Compensation

X. Adjournment President Wasserman adjourned the meeting at 9:00 p.m.

Last updated: 12/24/2013 1:57:28 PM