October 17, 2006

Commissioners Present: Becker; Gruber; Henderson; Hurley; Justman; Mosbrucker; Mosser; Murphy.

Commissioners not Present: Marshall.

Staff Present: Gartzman; Lee; Wolf.

MSC: To approve the Minutes of October 3, 2006.

(Becker/Justman: 5-0)

A. Daniel Stern, attorney for Parkmerced, remarked on the "Bonus Bucks" cases (AL060095 & 096), telling the Board that the constitutional right to contract is at issue, since there was no fraud, duress or undue influence on the tenants. Mr. Stern asserted that the temporarily discounted rent scheme is not in contravention of the Ordinance, and that the current cases are distinguishable from prior cases decided by the Board because the "bonus bucks" are equivalent to cash. Mr. Stern went on to say that the landlord never intended to charge any amount of rent other than that stated in the lease, and that the "bonus bucks" were just an incentive, similar to airline tickets or a plasma TV.

B. Aaron Goodman, a tenant at Parkmerced, told the Board that no one is looking at the "big picture" of what's going on at Parkmerced, and that people have moved out because their "bonus bucks" rent discount had expired. Mr. Goodman believes that this issue should be forwarded to the Board of Supervisors so that the public can review and comment on the scope of the Parkmerced landlord's development efforts.

C. Tenant Suzanne Morgan of 1277 – 14^{th Ave. (AT060092) commented on the denial of her petition alleging decreased housing services due to the landlord's failure to provide a replacement stove and refrigerator because she had failed to prove that the landlord would not have replaced the appliances within a reasonable amount of time. Ms. Morgan said that she brought evidence to the hearing of material that came out of the vent and on to her stove. She maintained that her landlord did not feel liable for a stove that she had not purchased.}

^{The tenant's appeal was filed over one month late because the elderly tenant was experiencing health problems.}

^{The landlord's petition for approval of a utility passthrough for 74 of 153 units was granted. One tenant appeals the Decision on the grounds that it is unfair to make half of the tenants in the complex pay 100% of the bill, since there are many students who come and go in the complex, as well as outsiders.}

^{The landlord's petition for approval of a utility passthrough for 17 of 794 units was granted. One tenant appeals the Decision, asserting that: the base year for the calculation is 1994, but his tenancy did not commence until 1995; and the calculation should not be based on four rooms when he resides in a one-bedroom unit.}

^{The tenant's petition alleging unlawful increases in rent was granted and the landlords were found liable to the tenant in the amount of $2,315.00. The tenant's claims of decreased housing services were denied. The tenant appeals, maintaining that the ALJ erred in finding that the tenant did not provide enough time for the landlords to replace a defective stove and refrigerator, because the landlord had indicated that she would not do so.}

^{The tenant's petition requesting a determination of his lawful rent pursuant to Rules Section 6.15C(3) was granted and the Master Tenant was found liable in the amount of $580.00 due to the tenant's having paid more than his proportional share of the rent. The tenant appeals, claiming that: the ALJ erred in setting his share of the rent at $180.00, rather than the $150.00 that he now pays; there are factual errors in the Decision; the storage space in the basement is provided by the property owner free of charge; household tasks are shared by all the roommates; and the Master Tenant should have had to file a landlord petition in order to have been granted a rent increase.}

^{The landlord's petition seeking a determination pursuant to Rules Section 1.21 was denied because the Administrative Law Judge (ALJ) found that the subject unit is the tenant's principal place of residence. On appeal, the landlord maintains that: the facts adduced at the hearing do not support the conclusions reached by the ALJ; the tenant's story is not credible; and the subtenant at the premises moved in after January 1, 1996 and a Costa-Hawkins rent increase is therefore warranted.}

^{The tenants' petition alleging decreased housing services was denied because the ALJ found that the tenants failed to prove that use of a parking space was included in the tenants' rent. The tenants appeal, alleging that: the landlord lied at the hearing and fabricated documents; another tenant in the building also does not have parking provided for in their lease; there are factual errors in the Decision; the ALJ failed to consider post-hearing evidence; and one of the tenants will bring an interpreter to the remand hearing, should one be granted.}

^{Two tenants filed petitions alleging unlawful rent increases and asking for a determination as to whether their base rents were the proper amount. The ALJ found that the tenants' lawful base rents were the amounts they were paying under the "Bonus Bucks" program offered by management at the inception of their tenancies, rather than the higher "market" amounts that the landlords specified on their leases and were now demanding. The landlords appeal, asserting that: a prior Rent Board decision finding the Bonus Bucks Program a wrongful contravention of the Rent Ordinance was wrongly decided; it is improper for the Rent Board to re-work a material term of a contract that was freely entered into and supported by adequate consideration; there is no requirement that initial base rent mirror fair market value; the effect of these decisions is to re-impose vacancy control, which is precluded by Costa-Hawkins; the petitions should have been administratively dismissed; "initial term" is not the same as "initial occupancy"; and the Bonus Bucks amounts should not have been amortized over a 12-month period.}

^{The landlord's petition seeking a determination pursuant to Rules Section 1.21 was denied because the ALJ found that the subject unit is the tenant's principal place of residence. On appeal, the landlord asserts: that the ALJ erred in finding that the tenant and her husband file separate tax returns; and the fact that the tenant obtains tax benefits on the Santa Cruz home owned by she and her husband should preclude her from receiving the benefit of a rent controlled apartment.}

^{In addition to correspondence concerning cases on the calendar, the Commissioners received the following communications:}

^{Senior Administrative Law Judge Tim Lee informed the Board that, in a recent Small Claims Court case, a tenant's claim for attorney's fees under the lease was granted based on the tenant successfully defending a landlord petition at the Rent Board. On de novo appeal to the Superior Court, the judge followed a prior trial court decision in reversing the award, and found that there was no right to attorney's fees in a Rent Board proceeding. Executive Director Wolf told the Commissioners they could contribute to the City's Combined Charities Campaign by using the forms provided in their folders.}

^{The Board continued their discussion of possible amendments to the Rules and Regulations to implement the Mirkarimi legislation, which took effect August 8th. Several issues were raised, including: what constitutes a reasonable amount of time for the temporary removal of a housing service; whether necessary repair should be treated differently from elective work; how these types of petitions should be processed; what are the available remedies for wrongful severance of a housing service; and how many of the requirements of Ordinance Section 37.9(a)(8), regarding owner-occupancy eviction, should apply. It was decided that Commissioner Justman will work with Senior Administrative Law Judge Lee on drafting proposed regulations for discussion at the November 14th Board meeting.}

^{D. H. N. Dao asked several questions regarding an owner's right to take away housing services if they don't live in the building, and if they move in.}

^{E. Tenant Aaron reiterated his contention that the situation at Parkmerced should be studied; he asked whether affected tenants should file petitions at the Rent Board, or join the pending class action lawsuit.}

^{F. Rex Reesa, a student at S. F. State University, asked how each Commissioner voted on the Parkmerced "bonus bucks" appeal.}

^{October 24th, 31st (Halloween) & November 7th (Election Day) - NO MEETINGS}

^{6:30 November 14, 2006}

^{8 appeal considerations}

^{Old Business:}

^{A. Commissioner Attendance Policy}

^{B. Mirkarimi Legislation (Ordinance ß37.2{r})}

^{President Gruber adjourned the meeting at 8:40 p.m.}