March 19, 2002p>
MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,
Tuesday, March 19, 2002 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 6:09 p.m.
II. Roll Call
Commissioners Present: Becker; Gruber; Lightner; Marshall; Wasserman.
Commissioners not Present: Hobson; Mosser; Murphy.
Staff Present: Grubb; Wolf.
Commissioner Justman appeared on the record at 6:14 p.m.; Commissioner Aung arrived at the meeting at 6:16 p.m.
III. Approval of the Minutes
IV. Remarks from the Public
A. Jose Morales, the tenant involved in the hardship appeal at 572 San Jose Ave. (AT020085), told the Board that he has been a tenant in San Francisco for over thirty years, and has seen continuous abuses by landlords. Mr. Morales believes that "greedy landlords listen to the devil and don’t care about their brothers and sisters." He warned the Board that legislation is being considered that would change the method by which Commissioners are appointed, and result in the current Board members losing their seats.
B. Robert Pender, Vice-President of the Parkmerced Residents’ Organization (PRO), told the Board that twelve members of the PRO Board of Directors were in attendance at the meeting. He said that PRO was appearing in support of the proposed amendments to Rules and Regulations Section 6.10(e).
C. Gil Dowd, representing the landlord in the appeal concerning 817 Clay St. #10 (AL020077), said that the landlord just wants to "sit down and get justification for application of the 6-Month Rule."
V. Public Hearing
Proposed Amendment to Rules and Regulations Section 6.10(e)
Goodwin v. Rent Board (Superior Court Case No. 317339)
A Public Hearing on a proposed amendment to Rules and Regulations Section 6.10(e) commenced at 6:15 p.m. and concluded at 6:25 p.m. The proposed language would make it clear that only an owner who incurred an increase in expenses can file a petition for rent increase based on those expenses. Language had been put out for consideration at a Public Hearing on October 16th. At the time of the Public Hearing, Commissioner Lightner expressed a concern that estates are not able to petition for increases based on the property tax reassessment triggered by the death of the owner because it takes so long for the supplemental tax bill to be issued by the City. In order to address this concern, staff proposed the following additional language:
6.10(e) If a building is refinanced or there is a change in ownership resulting in increased debt service and/or property taxes, only the landlord who incurred such expenses may file a petition under this Section, and only one rent increase per unit based upon increases in debt service and/or property taxes shall be allowed for each such refinance or transfer, except in extraordinary circumstances or in the interest of justice. In no event shall the petition be denied solely due to the subsequent transfer of the property, unless the successor in interest declines to substitute in as the petitioner.
(Original additions are in single underline. Additional additions are in double underline.)
The following persons addressed the Board regarding the proposed changes:
1. Carolyn Cahn, a PRO Board member, asked whether the proposed amendment applies to corporations who repeatedly buy and sell properties and keep petitioning for rent increases.
2. Genevieve Callejo, a PRO Board member, explained the situation that the tenants at Parkmerced are facing. The property was purchased in July of 1999, but the new owners have recently sold a portion of the property. The tenants are currently facing an O&M increase based on the 1999 purchase, and fear that there will be another petition filed by the new owner. Ms. Callejo believes that "corporations churn property for profit."
3. Robert Pender of PRO read a statement in support of the proposed amendment, which was signed by several of the members of PRO’s Board of Directors.
After listening to public comment, the Board voted as follows below:
VI. Consideration of Appeals
A. 2340 Filbert St. #11 AT020081
The landlord’s petition seeking a determination as to whether the tenant is a "Tenant in Occupancy" pursuant to Rules and Regulations Section 1.21 was granted and it was found that the subject unit does not constitute the tenant’s principal place of residence. However, since the unit does constitute a subtenant’s principal place of residence, no rent increase was found to be warranted. The tenant appeals, maintaining that: it was unnecessary for the Administrative Law Judge to issue a determination as to whether the unit is the tenant’s principal place of residence since there is a subtenant on the premises and the rent increase was denied on that basis; the finding that the unit is not the tenant’s principal place of residence could have collateral estoppel effect in a future proceeding; Rules and Regulations Section 1.21 is in excess of the authority of the Rent Board, and cannot be enforced; the tenant meets four of the five indicia to show that the unit is his principal place of residence; and absences for employment are permissible;
MSF: To deny the appeal and to make clear that the tenant was not a "Tenant in Occupancy" at the time the petition was filed. (Justman/Marshall: 2-3; Becker, Gruber, Lightner dissenting)
MSC: To deny the appeal. (Lightner/Gruber: 3-2; Becker, Marshall dissenting)
B. 17 Decatur St. #1-8 AL020084
The landlord’s Petition for Extension of Time to Do Capital Improvement Work was denied because the Administrative Law Judge found that the petition was not timely filed and not properly completed, and that the landlord’s time estimate to complete the work was unreasonable. On appeal, the landlord asks that the case be remanded with instructions that the finding that the landlord demonstrated a lack of good faith be stricken from the decision. The landlord contends that this conclusion is not supported by the evidence in the record, that the landlord was not aware that they needed to produce evidence on this point, and that the conclusion is unnecessary and prejudicial.
C. 572 San Jose AT020085
The landlord’s petition for a rent increase based on increased operating expenses was granted. The tenant filed an appeal based on financial hardship, which was accepted and remanded for hearing. In the Decision on Remand, the Administrative Law Judge found that the tenant had failed to prove sufficient financial hardship to warrant deferral of the operating expense increase. The tenant appeals, claiming that: working reduced hours is not elective on his part; the tenant should be allowed to file another hardship appeal at a later date should his health decline; and the tenant should not be forced to become a landlord by having to rent out the other bedroom in the unit.
MSC: To deny the appeal except to allow a reopening of the hardship appeal as to the operating and maintenance expense increase only if the tenant obtains a roommate who pays a proportional share of the rent but finds himself experiencing financial hardship due to health or other difficulties at a future time. (Lightner/Justman: 3-2; Gruber, Becker dissenting)
D. 2330 Larkin, Apt. 32 AL020083
The tenant’s petition alleging substantial decreases in housing services was granted and the landlord was found liable to the tenant in the amount of $2,250.00 due to a faulty window and leaking refrigerator. On appeal, the landlord asserts that: the tenant failed to meet her burden of proof; there is nothing wrong with the window or the refrigerator; and it is the tenant’s fault that she has not yet been provided with a replacement refrigerator.
E. 817 Clay St. #10 AL020077
The landlord’s appeal was filed six months late because information regarding the tenancy was not available to the landlord at the time of issuance of the decision.
The landlord’s petition for certification of the costs of seismic retrofit of the building to six units was granted. However, the costs were disallowed to the tenants in unit #10 because the Administrative Law Judge found that the tenancy in that unit commenced after completion of the work. On appeal, the landlord claims that there has been no change in the tenancy but, rather, the wife is now paying the rent subsequent to the death of her husband.
F. 335 & 337 Waller St. AL020087
The landlord filed a petition seeking a determination as to whether the tenant is a "Tenant in Occupancy" as contemplated by Rules and Regulations Section 1.21. The Administration Law Judge found that the tenant uses two separate units in the building jointly as his principal place of residence and that no rent increase was therefore warranted. The landlord appeals, asserting that the tenant lives in one unit and uses the other exclusively for work purposes; and that it is inequitable to allow the tenant to claim two separate flats as his principal place of residence, when owners are only allowed to have one principal place of residence pursuant to Ordinance Section 37.9(a)(8).
G. 3715 Scott St. AT020082
The tenant’s petition alleging an unlawful increase in rent from $1,625.00 to $2,500.00 was granted because the Administrative Law Judge found that a 6.14 notice issued by the landlord was not timely served. The landlord appealed the decision, maintaining that the tenant’s last name and bank are the same as the prior tenant’s, so her rent checks did not serve to provide actual notice of her occupancy; and that he had always treated the tenant as a subtenant. The landlord’s appeal was accepted and the case was remanded to the Administrative Law Judge with instructions to vacate the decision and find that the 6.14 notice was timely served. The tenant appeals the remand decision, contending that: the July 2, 1996 version of Rules Section 6.14 instead of the April, 2000 version should apply to this case; the landlord treated the tenant as a co-tenant, rather than a subtenant; the landlord’s testimony was based on hearsay and lacks credibility; Costa-Hawkins does not apply to the facts of this case; and the Commissioners did not have the power to overturn the decision upon their consideration of the landlord’s appeal.
H. 1345-47 - 25th Ave. AL020086
The landlord’s petition for certification of substantial rehabilitation was denied because the Administrative Law Judge found that the landlord had failed to prove that the premises were ineligible for a permit of occupancy, in addition to failing to provide substantiation of the work performed and the costs incurred. On appeal, the landlord argues that: the requirements contained in Rules and Regulations Section 8.12 are not mandatory, and the landlord made a good faith effort and substantially complied with the requirements of that Section; the list of "supporting documentation" set forth in Section 8.12 is not an exhaustive or exclusive list; and the policy goals of the Ordinance are satisfied in that units have been added to the housing stock. The landlord alternatively requests that the matter be remanded for a hearing to determine whether a newly created second unit in the building is exempt from the Ordinance.
VII. Communications
In addition to correspondence concerning cases on the calendar, the Commissioners received the following communications:
A. The office workload statistics for the month of February, 2001.
B. The Annual Report on Eviction Notices to the Clerk of the Board of Supervisors.
VIII. Director’s Report
Executive Director Grubb reminded the Commissioners that their Statement of Economic Interest forms are due by April 1, 2002. He also informed the Board that there are several pieces of legislation potentially affecting the agency pending before the Board of Supervisors: Supervisor Daly has introduced legislation addressing OMI and Ellis eviction "bluff-outs", or threats, which will be heard in Committee on Thursday, March 28th. The legislation provides that copies of OMI eviction notices will have to be recorded by the Rent Board and that any threats of eviction issued by landlords, except those regarding non-payment of rent, will have to be filed with the Rent Board. There is also proposed legislation pegging the interest payment on security deposits to the Constant Maturities T-Bill; the Rent Board will do the calculation annually, should the bill pass.
IX. Old Business
In response to an inquiry from a landlord attorney, the Board asked staff to draft language to make clear that a Master Tenant who was paying less than their proportional share of the rent could not be evicted for illegal use of the unit pursuant to Rules Section 6.15C(3). The proposed language was as follows below:
(3) Partial Sublets. In the event a master tenant does not sublease the entire rental unit, as anticipated in Section 37.3 (c), then the master tenant may charge the subtenant(s) no more than the subtenant(s) proportional share of the total current rent paid to the landlord by the master tenant for the housing and housing services to which the subtenant is entitled under the sub-lease. The exclusive remedy for a violation of this section is an adjustment of the rent and determination of overpayments pursuant to a petition filed with the Board. A master tenant’s violation of this section shall not constitute a basis for eviction under Section 37.9.
(Proposed new language underlined)
Commissioner Lightner expressed a concern that the language would limit a subtenant’s remedies, and preclude their going to court. Commissioners Marshall and Becker suggested putting a period after the word "overpayments", but leaving in the rest of the first sentence. After discussion, the Board voted as follows:
The Public Hearing will be held at 6:00 p.m. on April 16, 2002.
6:00 Public Hearing:
XI. Adjournment
President Wasserman adjourned the meeting at 9:09 p.m.