December 2, 2003

MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD

Tuesday, December 2, 2003 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 6:14 p.m.

II. Roll Call

III. Approval of the Minutes

IV. Remarks from the Public

A. Gary Near put forward several "constructive" suggestions regarding the Board's Notice of Appeal Consideration, including: the case number should be on the face of the notice; non-appealing parties should not be provided with a copy of the appeal by the Board because Mr. Near was under the impression that the appellant had to serve the respondent upon the filing of the appeal, which is only the case as to subsequent submissions; and it should be made clear that the appellant, as well as the respondent, can respond to the appeal. Mr. Near believes the Notice to be "defective." He also asked how the Board gets a copy of the proceedings below.

B. Landlord Nancy Robison of 2730 Sacramento #3 (AL030339) made the following points about her case: the residency factors applied by the Administrative Law Judge differ from those suggested to her by a Rent Board counselor, who said that the indices for determinations under Rules Sections 1.21 and 6.14 are the same; the ALJ failed to rule on the tenancy status of the other occupants of the unit; the ALJ misinterpreted and misapplied tax information and other evidence; and the tenant's son was a minor when Costa-Hawkins went into effect, and therefore was not a legal occupant of the unit until he turned eighteen.

C. Tenant Nancy Ellis of 1360 Lombard #204 told the Board that she has no means of support except for her IRA, and she would incur penalties and tax consequences for early withdrawal of her limited funds. Ms. Ellis believes long-term tenants such as her do not receive the benefits of rent control due to capital improvement passthroughs.

V. Consideration of Appeals

A. 434 Leavenworth #506, 508 & 410 AT030340 thru -43

The tenant in unit #506 appeals a decision certifying capital improvement costs almost seven months late because the tenant is not a native English speaker and was unaware of his right to appeal the decision on the grounds of financial hardship.

The landlord's petition for certification of capital improvement costs was granted. The tenants in three units appeal the decision on the grounds of financial hardship. The tenant in unit #506 also appeals a decision certifying capital improvement costs issued in April of this year on the same grounds.

B. 747 Ellis #7 AT030336

The tenant's appeal was filed almost ten months late because the tenant alleges he failed to receive both notice of the hearing and the remand decision on his hardship claim.

The landlord's petition for certification of capital improvement costs was granted. The tenant's appeal on the grounds of financial hardship was accepted and remanded for hearing. The tenant failed to appear at the properly noticed hearing and, accordingly, his appeal was denied. On further appeal, the tenant claims not to have received notice of the hearing nor the Decision on Remand, and reinstitutes his financial hardship claim.

C. 1360 Lombard, No. 204 AT030334

The tenant's appeal was filed two and one-half years late because the tenant had anticipated being able to obtain full-time employment, which she has been unable to do for health-related reasons.

The landlord's petition for certification of the costs of a large weatherproofing job was granted, resulting in large passthroughs to the tenants in three buildings. One tenant appeals the decision on the grounds of financial hardship.

D. 1615 Jones St. #3 AL030332

The tenant's petition alleging decreased housing services was granted and the landlord was found liable to the tenant in the amount of $337.50 due to a kitchen sink leak and faulty electrical service. Both the landlord and tenant appealed, and the case was remanded only on the issue of the commencement date and duration of the rent reduction granted for the electrical work. In the Decision on Remand, the Administrative Law Judge reduced the amount of the landlord's liability for the faulty electrical service based on when the tenant provided notice of the problem to the landlord and when the landlord remedied the problem. The landlord appeals on the grounds that the tenant perjured himself at the original hearing on this matter.

E. 1166 Haight #5 AL030333

The landlord's petition for certification of capital improvement costs was granted, resulting in a monthly passthrough in the amount of $14.94. The tenant's appeal on the grounds of financial hardship was also granted, and the Administrative Law Judge found sufficient financial hardship to warrant permanent deferral of the passthrough. The landlord appeals the remand decision, asserting that: the tenant failed to meet the burden of proof regarding his hardship claim; no consideration has been given to the tenant's assets; the landlord is being asked to subsidize the tenant's "lifestyle choice"; and due process has not been provided to the landlord.

F. 430 Duboce Ave. AL030331

The tenant's petition alleging an unlawful rent increase from $609.15 to $1,700.00 was granted because the Administrative Law Judge found that the tenant permanently resides at more than one residence, one of which is the subject unit, and therefore no Costa-Hawkins increase is warranted. On appeal, the landlord argues that: the original tenant has vacated the unit and currently lives with her husband in Antioch; the tenant's daughter is not an original occupant, having left the unit as a minor and returned as an adult; the facts of this case are distinguishable from Cobb v. S.F. Rent Board; and the tenant is pretending that she resides in the unit in order to provide her family members with a rent controlled unit.

G. 1097 Revere Ave. AL030335

The tenant's petition alleging unlawful rent increases was granted and the landlord was found liable to the tenant in the amount of $10,548.80. The landlord in this case is a Master Tenant who rented this industrial space from the owner under a commercial lease, and passed on the rent increases that he received from the landlord to the subtenants. On appeal, the landlord maintains that: without the ability to pass through the rent increases he receives from the owner of the property, he will be unable to pay the rent and the subtenants will be forced to move; the base rent includes the percentage increases imposed by the building owner; the rent increases should be apportioned to the commercial portion of the tenancy; Rules Section 6.15C(3) allows for a proportional share of rent increases to be passed through to subtenants; the rent increases were given in good faith; the tenant is not current in the payment of rent and utilities; and there were no other tenants on the premises who would be entitled to a share of the overpayments.

H. 1935 Franklin St. #102 AL030337

The tenant's petition challenging the calculation of PG&E and bond passthrough calculations was granted as to the PG&E passthrough. The Administrative Law Judge found that the landlord had failed to prove the calculations upon which the 2002 and 2003 passthroughs were based. On appeal, the landlord provides copies of some of the PG&E bills for the time periods in question.

I. 1310 Jones St., Apt. 104 AT030338

The tenant's appeal was filed one month late because, at the time the Decision was issued, there was no reason for the tenant to appeal.

The tenant's petition alleging that the PG&E passthrough had been improperly calculated was granted, and sums in excess of the proper amount were ordered refunded to the tenant. On appeal, the tenant claims that another tenant in the building had the same facts but the entire passthrough was disallowed for that tenant, resulting in a much larger refund of rent overpayments.

J. 2730 Sacramento #3 AL030339

The landlord filed a petition seeking a determination as to whether a rent increase is justified pursuant to Rules Section 6.14 and/or Costa-Hawkins. The Administrative Law Judge found that no rent increase is warranted because the original tenants have not vacated the subject unit, and still permanently reside on the premises on at least a part-time basis. The landlord appeals, claiming that: the Administrative Law Judge failed to apply the standards found in Rules Section 1.21, nor did she provide an alternate standard; the Administrative Law Judge failed to make a determination as to the tenancy status of the other occupants of the unit; the Administrative Law Judge erred as to the implications of the tenant's tax returns and home loan application; the Administrative Law Judge failed to include and apply several key pieces of the landlord's evidence; and the Administrative Law Judge failed to require proof from the tenant as to how much time she spends in the unit.

K. 520 S. Van Ness #379 AL030320

The tenant's petition alleging decreased housing services because the residential hotel was in violation of the provisions of the Uniform Visitor Policy was granted and the landlord was found liable to the tenant in the amount of $480.00. On appeal, the landlord maintains that: the value placed on the decreased housing services is unreasonable considering the amount of rent paid by the tenant; the hotel's Visitor Policy constitutes a reasonable interpretation of the Uniform Visitor Policy; there is no language in the Visitor Policy preventing a landlord from limiting visitors to one at a time; serious overcrowding and diminished quality of life would result from allowing each tenant to have two visitors at a time; the practice of limiting consecutive overnights takes into account the needs of the hotel to maintain health and safety and the rights of other tenants; and any relief granted should apply prospectively only.

In the absence of the Executive Director, who was going to do some research regarding sources of funding, consideration of this appeal was continued to the next meeting.

VI. Communications

In addition to correspondence concerning cases on the calendar, the Commissioners received a Memorandum from Senior Administrative Law Judge Sandy Gartzman regarding Rules and Regulations Section 4.11 (Utility Passthroughs) and an article from SFGate regarding the Board's new Alternative Dispute Resolution Program.

IV. Remarks from the Public (cont.)

D. Landlord Nancy Robison of 2730 Sacramento #3 (AL030339) said that a Rent Board counselor had advised her against getting an attorney, although certain of the Commissioners thought she ought to have done so. She stated her intention to file a petition pursuant to Rules Section 1.21 in order to obtain a determination as to the status of the original tenant, although she realizes that she will not be granted a rent increase as long as the tenant's son resides in the unit as his principal place of residence.

E. Landlord Representative Andy Braden spoke about the tenant hardship case at 1166 Haight St. #5 (AL030333). In that case, the landlord believed that the tenant was perpetrating a fraud because the only evidence he provided was selected checks. Mr. Braden said that the problem is that the Board's policies regarding hardship are not codified in the Rules and Regs., that there are no standards, and that the bigger issue is "how the Rent Board operates."

VII. New Business

Rules and Regulations Section 4.11 (Utility Passthroughs)

Senior Administrative Law Judge Sandy Gartzman reported to the Board that, at the request of Supervisor Peskin, the Land Use Committee of the Board of Supervisors convened a Public Hearing on November 24^th to take testimony on the issue of PG&E passthroughs. At the conclusion of the hearing, Supervisor Peskin asked Rent Board staff to bring the various issues raised to the attention of the Rent Board Commissioners to consider possible amendments to §4.11. Some of the issues raised include: calculation Method 1 and Method 2 do not always yield the same result; whether base year costs should be indexed for inflation; whether PG&E costs are included in a tenant's initial base rent; whether allocating utility costs based on room count is fair; how to calculate coin-operated laundry facility and other costs attributable to commercial spaces; whether PG&E costs should be petitioned for individually or as part of an Operating and Maintenance Expense Petition; and whether the landlord should be required to take reasonable energy conservation measures in order to be eligible for a passthrough.

The Commissioners will consult with their constituencies and report back when this issue is discussed further at the January 6^th meeting.

VIII. Calendar Items

December 9, 2003 - NO MEETING

December 16, 2003

7 appeal considerations (1 cont. from 12/2/03)

IX. Adjournment

President Wasserman adjourned the meeting at 8:12 p.m.