July 19, 2005
MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,
Tuesday, July 19, 2005 at 6:00 p.m. at
25 Van Ness Avenue, Suite 70, Lower Level
I. Call to Order
Commissioner Gruber called the meeting to order at 6:02 p.m.
II. Roll Call
| Commissioners Present: |
Becker; Gruber; Henderson; Hurley; Justman; Mosbrucker; Mosser. |
| Commissioners not Present: |
Marshall; Murphy; Wasserman. |
| Staff Present: |
Gartzman; Lee. |
III. Approval of the Minutes
MSC: To approve the Minutes of July 5, 2005 with the following correction to page 4 (in double underline), involving the result of the second motion on Appeal No. AT050145 regarding 1044 Pine Street #9:
“MSF: To deny the appeal. (Gruber/Murphy: 2-3; Henderson, Marshall, Justman dissenting)”
(Gruber/Mosbrucker: 5-0 )
IV. Consideration of Appeals
A. Parkmerced AL050158 thru AL050176 &
AL050178 thru AL050180
The landlord filed 24 petitions to pass through the costs of a repiping/irrigation project. A decision was issued certifying a monthly passthrough in the amount of $63.70 to tenants of Block 3, which was processed as a test case. Upon appeal from 6 tenants, the Board voted to remand the case to the Administrative Law Judge to vacate the decision and dismiss the petition because the work performed was found to be part of a complex-wide project that was not completed at the time the petition was filed, and therefore the case was not ripe for adjudication. The dismissal was without prejudice to the filing of a single petition for certification of the costs of the entire project when the work is completed. The ALJ then dismissed the 23 related petitions without a hearing because the petitions were indistinguishable from the Block 3 petition on the issue of premature filing before the capital improvement project was completed. The landlord appeals the dismissals of 22 of the 23 related petitions on the grounds that: the landlord is prejudiced by the dismissals because a new filing date will only entitle them to certification of 50% of the costs, pursuant to amendments to the Rent Ordinance that took effect as of November 14, 2002; the dismissals should not have been issued before there is a final determination by the Court on the Block 3 case because if there is a court decision in the landlord’s favor in that case, the dismissals in these 22 related cases should be reversed, but there is no procedure for changing the rulings in these 22 related cases; the irrigation project was not complex-wide and each block should have been separately considered; and the landlord was denied its due process right to a hearing prior to dismissals being entered.
MSC: To recuse Commissioner Becker from consideration of the appeal. (Mosbrucker/Justman: 5-0)
MSC: To deny the appeal. (Mosbrucker/Justman: 5-0)
B. 440 Davis Court #1921 AT050157
The landlord’s petition for a determination pursuant to Rules Section 1.21 was denied because the Administrative Law Judge found that the subject unit was the tenant’s principal place of residence. The landlord’s appeal was accepted and the case was remanded to consider Evidence Code Section 413 and what, if any, inferences should be drawn from the tenant’s failure to explain or deny the evidence presented by the landlord. The tenant failed to appear at the remand hearing, nor did she testify by phone or submit a Declaration Under Penalty of Perjury. The Administrative Law Judge granted the landlord’s petition and found that the tenant is not a “Tenant in Occupancy” of the subject unit. The tenant appeals the remand decision, arguing that: the case was remanded only to consider the applicability of Evidence Code Section 413, and not to gather new facts nor open the record to accept new evidence; and the “Pre-Hearing Order” issued by the Administrative Law Judge exceeded the authority granted by the Rent Board on remand.
MSC: To deny the appeal. (Hurley/Gruber: 4-1; Becker dissenting)
C. 543 Buena Vista West #1 AL050181
The tenant’s petition alleging decreased housing services was granted and the landlord was found liable to the tenant in the amount of $25.00 per month or $150.00 due to a leaking bedroom ceiling. The landlord appeals, claiming that: the petition is pre-empted by State law; the tenant did not suffer a substantial decrease in services because he had unrestricted use of the apartment during the relevant time period; the tenant failed to promptly notify the landlord regarding the alleged leak, and his negligence contributed to the problem; the leak was minor and inconsequential; there are factual errors in the decision; and the Administrative Law Judge was biased against the landlord.
MSC: To deny the appeal. (Becker/Mosbrucker: 5-0)
D. 208 – 12th Ave. AT050182
The landlord’s petition for a rent increase from $300 to $1,200 based on comparable rents was granted. The Administrative Law Judge found that the tenant’s rent was originally set low because he rented from family members and was an unemployed student unable to pay market rent at the time. The tenant appeals, arguing that: there was no agreement that his rent would be raised once he graduated from college and got a job; his sisters are retaliating against him because he will not let them sell the building; and only the rents of certain tenants are being increased, although the claim is that the building is losing money.
MSF: To deny the appeal. (Justman/Gruber: 2-3; Becker, Hurley and Mosbrucker dissenting)
MSC: To deny the appeal. (Justman/Gruber: 3-2; Becker, Mosbrucker dissenting)
E. 795 Burnett #5 AL050183
The landlord’s petition for a determination pursuant to Rules Section 1.21 was denied because the Administrative Law Judge found that the subject unit is the tenant’s principal place of residence. On appeal, the landlord asserts that: the subject unit is the tenant’s vacation home and her principal place of residence is in Missouri, with her sister; the tenant has spent more time in Missouri over the past six years than in San Francisco; the tenant has moved her possessions to Missouri, as well as her car; the tenant uses the Missouri address for tax purposes and delivery of mail; the tenant was registered to vote in Missouri until recently; and no evidence was presented that the tenant’s Social Security checks are deposited into the tenant’s San Francisco account, while the tenant acknowledges doing some banking in Missouri.
MSC: To deny the appeal. (Becker/Mosbrucker: 3-2; Gruber,
Hurley dissenting)
V. Public Hearing
Water Revenue Bond Passthroughs Resulting from Issuance of Water
System Improvement Revenue Bonds
(Ordinance Section 37.3(a)(5)(B))
The Commissioners held a Public Hearing on proposed changes to the Rules and Regulations concerning water revenue bond passthroughs. The intent of proposed Section 4.14 is to provide procedures to implement Ordinance Section 37.3(a)(5)(B), which allows landlords to pass through to tenants 50% of the water bill charges attributable to water rate increases resulting from issuance of water system improvement revenue bonds authorized at the November 5, 2002 election (Proposition A). The intent of proposed Section 10.14 is to provide procedures for a tenant to challenge an improper water revenue bond passthrough. The public hearing commenced at 6:45 p.m. One individual addressed the Board as follows:
Tenant Robert Pender of The Villas Parkmerced stated that the apartment complex where he lives has a lot of trees, bushes and landscaped grounds which the landlord waters “day and night”, resulting in a lot of runoff and wasted water. He believes it is a grave injustice to allow the landlord to pass through the cost of water and that the landlord should not be able to charge the tenants for wasting water.
After the conclusion of the Public Hearing at 6:47 p.m., the Commissioners reviewed sample copies of the new water bills mailed by the San Francisco Public Utilities Commission to its customers after July 1, 2005. The bill for multi-family residences includes the following language:
“Your current water charge includes $XX.XX for costs attributable to water rate increases resulting from the issuance of Water System Improvement Revenue Bonds authorized by voters at the November 5, 2002 election (Proposition A). An owner of residential rental units subject to the San Francisco Rent Ordinance may be able to pass through 50% of the increased cost to tenants. For more information, contact the San Francisco Rent Board at 25 Van Ness Avenue, Suite 320, San Francisco, CA 94102 or call (415) 252-4602 or visit the Rent Board website at www.sfgov.org/rentboard.”
The bill for single-family residences does not specify the charge attributable to water rate increases resulting from the issuance of Water System Improvement Revenue Bonds authorized by voters at the November 5, 2002 election (Proposition A), as required by Ordinance Section 37.3(a)(5)(B)(vii)(2). Staff informed the Commissioners that the SFPUC was willing to change the language on the bills for single-family residences to be the same as that on the multi-family residence bills, but preferred to use different language which would require the customer to contact the SFPUC to get the amount of the water charge subject to the passthrough printed on the bill. The Commissioners unanimously agreed that the language on the single family residence bills should be changed to the exact same language used on the multiple-family residence bills so that each bill has a separate line item showing the amount of the charges that could be passed through to tenants (at the rate of 50%). The Commissioners directed staff to notify the SFPUC of its request to change the water revenue bond passthrough language on the water bills for single-family residences. Staff also agreed to prepare a calculation worksheet for water revenue bond passthroughs by September 1, 2005.
MSC: To adopt the proposed new Rules and Regulations Sections 4.14 and 10.14 regarding water revenue bond passthroughs, and to renumber former Section 4.14 as Section 4.15, all effective July 20, 2005.
(Justman/Gruber: 5-0)
The amendments read as follows below:
Section 4.14 Water Revenue Bond Passthrough
(Effective July 20, 2005)
(a) A landlord may pass through fifty percent (50%) of the water bill charges attributable to water rate increases resulting from issuance of Water System Improvement Revenue Bonds authorized at the November 5, 2002 election (Proposition A), to any unit that is in compliance with any applicable laws requiring water conservation devices. The landlord is not required to file a petition with the Board for approval of a water revenue bond passthrough.
(b) The landlord shall give the tenant(s) legal notice of any water revenue bond passthrough.
(1) The notice shall specify the dollar amount of the monthly passthrough, the period of time covered by the water bill(s) that are used to calculate the passthrough and the number of months that the tenant is required to pay the passthrough.
(2) The notice shall explain that the passthrough is based on increased water bill charges attributable to water rate increases resulting from issuance of water revenue bonds authorized at the November 2002 election.
(3) The charges and the calculation of the passthrough shall be explained in writing on a form provided by the Board, which form shall be attached to the notice.
(4) The notice shall state that the tenant is entitled to receive a copy of the applicable water bill(s) from the landlord upon request.
(5) The notice shall state that the unit is in compliance with any applicable laws requiring water conservation devices.
(c) The landlord shall calculate the amount of the water revenue bond passthrough as follows:
(1) Step 1: Compile the water bill(s) to be included in the calculation of the water revenue bond passthrough. The landlord may base the calculation on a single water bill or, in the alternative, on all of the water bills for any calendar year. Where the landlord elects to calculate the passthrough based on calendar year, the passthrough shall be based on actual costs incurred by the landlord during the relevant calendar year(s), regardless of when the water bills were received or paid.
(2) Step 2: Add up the water bill charges attributable to water rate increases resulting from issuance of Water System Improvement Revenue Bonds authorized at the November 5, 2002 election. These charges are listed as a separate line item on the water bill. Divide that figure by two (since a 50% passthrough is permitted) in order to obtain the total amount permitted to be passed through to tenants in the building.
(3) Step 3: Divide the amount determined in Step 2 above by the total number of units covered by the water bill(s), including commercial units, to obtain the allowable passthrough per unit.
(4) Step 4: Divide the amount determined in Step 3 above by the number of months covered by the water bill(s) to determine the monthly passthrough amount for each unit covered by the water bill(s).
(d) The monthly passthrough amount determined in Step 4 can be imposed only for the same number of months covered by the water bills that are used in the passthrough calculation. For example, if the landlord imposes a water revenue bond passthrough based on a single water bill with a two-month bill cycle, the monthly passthrough remains in effect for two months only. If the landlord imposes a water revenue bond passthrough based on water bills for charges incurred during an entire calendar year, the monthly passthrough remains in effect for twelve months. If the landlord imposes a water revenue bond passthrough based on water bills for charges incurred during two calendar years, the monthly passthrough remains in effect for twenty-four months.
(e) Where the landlord elects to calculate the water revenue bond passthrough based on a single water bill, the passthrough may be imposed at any time, provided that the landlord serves notice of such passthrough within sixty (60) days of receipt of the water bill. Where the landlord elects to calculate the water revenue bond passthrough based on water bills for charges incurred during an entire calendar year, the passthrough may be imposed at any time, provided that the landlord serves notice of such passthrough to be effective on the tenant’s anniversary date.
(f) Only those tenants in residency during the billing period(s) in which the water bill charges were incurred may be assessed the passthrough.
(g) The amount due from the tenant for any water revenue bond passthrough shall be due on the same date as a rent payment normally would be due.
(h) The water revenue bond passthrough shall not be included in the tenant's base rent for purposes of calculation of the amount of rent increases allowable under the Ordinance and these Rules and Regulations.
(i) Nothing in this section or in these Rules and Regulations shall be interpreted as requiring any landlord to pass through any water rate increases resulting from issuance of Water System Improvement Revenue Bonds authorized at the November 5, 2002 election. However, the provisions of this Section shall be deemed a part of every rental agreement or lease, written or oral, for the possession of a rental unit subject to the Ordinance unless the landlord and tenant agree that the landlord will not pass through any charges based on water rate increases resulting from issuance of Water System Improvement Revenue Bonds authorized at the November 5, 2002 election, in which case such agreement will be binding on the landlord and on any successor owner of the building, unless such agreement is changed in accordance with applicable law.
(j) Where a water revenue bond passthrough has been lawfully demanded of a tenant, a change in the ownership of the building in which the tenant's unit is located will not affect the tenant's liability to pay the amount passed through.
(k) Where a tenant alleges that the landlord has imposed a water revenue bond passthrough that is not in compliance with Ordinance Section 37.3(a)(5)(B) and Rules and Regulations Section 4.14, the tenant may petition for a hearing under the procedures provided in Ordinance Section 37.8. In such a hearing, the landlord shall have the burden of proof. Any tenant petition challenging such a passthrough must be filed within one year of the effective date of the challenged water revenue bond passthrough. The filing of a petition by a tenant does not relieve the tenant of his or her obligation to pay the passthrough pending a final determination. Grounds for challenging a water revenue bond passthrough are set forth in Section 10.14 of these Rules and Regulations.
(l) A tenant may file a hardship application with the Board requesting relief from all or part of a water revenue bond passthrough. Any hardship application must be filed within one year of the effective date of the water revenue bond passthrough(s). Payment of the water revenue bond passthrough(s) set forth in the hardship application shall be stayed until a decision is made by the Administrative Law Judge after a hearing on the tenant’s hardship application. Appeals of decisions on a tenant’s hardship application shall be governed by Ordinance Section 37.8(f).
Section 4.15 Effect of Vacancy
(Added April 25, 1995, effective February 1, 1995; renumbered effective July 20, 2005)
{TEXT REMAINS UNCHANGED}
Section 10.14 Improper Water Revenue Bond Passthrough
(Effective July 20, 2005)
(a) Within one year of the effective date of a water revenue bond passthrough, a tenant may petition for an arbitration hearing on the following grounds;
(1) The landlord has not properly calculated the passthrough;
(2) The passthrough is calculated using an incorrect unit count;
(3) The landlord failed to provide a clear written explanation of the charges and the calculation of the passthrough;
(4) The unit is not in compliance with applicable laws requiring water conservation devices;
(5) The tenant requested a copy of the applicable water bill(s) and the landlord has not provided them;
(6) The tenancy began during or after the billing period(s) included in the passthrough calculation;
(7) The landlord failed to discontinue the passthrough after it was fully paid.
(b) The landlord shall have the burden of proving the accuracy of the calculation that is the basis of the water revenue bond passthrough, and that the unit is in compliance with applicable laws requiring water conservation devices.
(c) A petition based on this section shall be accompanied by the notice of the water revenue bond passthrough.
VI. Communications
In addition to correspondence concerning cases on the calendar, the Commissioners received the following communications:
A. A copy of the Notice of Public Hearing for the July 19th hearing on proposed new regulations to implement Ordinance Section 37.3(a)(5)(B).
B. Copies of sample water bills mailed by the San Francisco Public Utilities Commission to its customers after July 1, 2005.
VII. Remarks from the Public
Tenant Robert Pender advised the Board that there are many people “out there” who are unhappy with the real estate interests and the Rent Board and the Board should be prepared for some “big changes.”
VIII. Calendar Items
July 26, 2005 - NO MEETING
August 2, 2005
5 appeal considerations
The Board Hearing for the property at 2201 Pacific Avenue #601 (AT050139) has been taken off calendar because the parties have agreed to a settlement. The settlement agreement will be presented to the Board for approval.
IX. Adjournment
Commissioner Gruber adjourned the meeting at 7:22 p.m.