June 19, 2007

Commissioners Present: Becker; Gruber; Hurley; Mosbrucker; Mosser.

Commissioners not Present: Henderson; Murphy.

Staff Present: Lee; Wolf.

Commissioners Justman and Marshall appeared on the record at 6:13 p.m.

MSC: To approve the Minutes of June 5, 2007.

(Mosbrucker/Hurley: 4-0)

A. Dave Crow, Attorney for the tenant in the case at 555 Florida #316 (AT070068), told the Board that the landlord did create live-work housing, but not legally and the Board must decide the case "in law and not equity." Mr. Crow said that exemptions to the Ordinance must be narrowly construed and the building was issued a temporary Certificate of Occupancy only. Mr. Crow also reminded the Board that the Fire Department does not issue Certificates of Final Completion and Occupancy, as these must be issued by the Department of Building Inspection, and there is no evidence that the landlord ever applied.

B. Richard Grabstein, Attorney for the landlord in the Florida Street case, told the Board that tenant's counsel's argument was rejected by the Administrative Law Judge (ALJ), who based the decision solely on Costa-Hawkins. Mr. Grabstein said that Rules ß1.17 is inapplicable to this case, since Costa-Hawkins only requires a certificate of occupancy, without saying what that means. Mr. Grabstein also told the Board that the building has been repeatedly inspected by the Department of Building Inspection for eight years with no violations being issued, which is tantamount to approval.

C. Andrew Zacks, Attorney for the landlord in the case at 759 – 14^th Ave. (AL070149), told the Board that the ALJ's decision constitutes a "counter-productive application of Rules ß1.21." Mr. Zacks contends that the tenant is an attorney who took a homeowner's exemption on his residence in Marin County and represents to the State Bar that the subject unit is his office. Mr. Zacks conceded that a Homeowner's Exemption is not always totally definitive but said that this case is unusual, and must be reversed. Mr. Zacks also asserted that the decision would drive the landlord out of the rental business as the rent is below market and the family took on significant debt for the care of the elderly owner.

D. Harvey Freed, the tenant in the case at 14rh Avenue, told the Board that the ALJ made a careful factual analysis of all factors and the Findings were all in his favor, including that his testimony was credible. Mr. Freed told the Commissioners that he has lived with his family in the subject unit for many years and that the "rustic cottage" in Inverness is only used on weekends. Mr. Freed also told the Board that the Marin County Homeowner's Exemption form did not state that the unit must be one's principal place of residence, and it has been revoked.

E. Tenant David Lunn of 1657 Market #28 (AT070117) told the Board that the Decision specified that any sums paid on his behalf by Walden House should be returned to the agency. However, Mr. Lunn clarified that Walden House was merely his representative payee, and the amounts overpaid should actually be refunded to him.

F. David Fisher, the son of the 14th Avenue landlord, told the Board that he inherited the property. Mr. Fisher expressed his opinion that the intent of rent control was not to protect real estate attorneys with "million dollar homes" who have sworn that another unit is their principal place of residence.

The landlord's petition for approval of utility passthroughs for 22 of 73 units was granted. One tenant appeals the decision on the grounds of financial hardship.

Twenty-eight tenant appeals were filed several months late because the tenants are monolingual Chinese speakers who did not realize the passthroughs were approved until they recently received notices of rent increase.

The landlord filed several petitions seeking approval of utility passthroughs, which were granted. The tenants in twenty-eight units appeal the decisions on the grounds of financial hardship.

The landlord's hardship appeal was filed almost one month late because the landlord did not know she could appeal on this basis until after her substantive appeal was denied and because she experienced vertigo for close to a two-week period.

The tenant's petition alleging an unlawful rent increase was granted and the landlord was found liable to the tenant in the amount of $9,226.60. On further appeal, the landlord claims that the decision presents her with a financial hardship and alleges that there are errors in the overpayment calculation.

The tenant's appeal was filed four and one-half months late because the lease agreement showed that the increase was pending, and the tenant did not realize that it had been approved.

The landlord's petition for approval of utility passthroughs for 58 of 153 units was approved. One tenant appeals the decision on the grounds of financial hardship.

The tenant's petition alleging an unlawful rent increase was granted and the landlord was found liable to the tenant for any sums paid by the tenant in excess of $550.00 per month. Additionally, the landlord was ordered to make restitution to a social services program for any sums in excess of the lawful amount that they paid on behalf of the tenant. On appeal, the tenant explains that the social services program only serves as his Representative Payee, and that all overpayments should be refunded to him.

The landlord's petition for a determination pursuant to Rules ß1.21 and Costa-Hawkins was granted and the ALJ found that the landlord is entitled to increase the rent from $818.00 to $2,400.00 because the original occupant no longer permanently resides in the subject unit and the subtenant commenced occupancy after January 1, 1996. Upon the second Writ of Administrative Mandamus filed by the tenant in Superior Court, the case was remanded to the Rent Board to make further findings as to whether the landlord waived her right to the increase based on whether the written notice of the subtenant's occupancy provided the landlord with the information necessary to be aware that she was entitled to a market increase because the original tenant no longer permanently resided in the unit. In the second Decision on Remand from Superior Court, the ALJ determines that the tenant did not provide such written notice to the landlord and the landlord had therefore not waived her right to an unlimited rent increase. On further appeal, the tenant argues that: the landlord was informed in writing on several occasions of all the facts necessary for her to know that she was entitled to a Costa-Hawkins rent increase; the ALJ appears to incorrectly equate the "permanently reside" standard with principal place of residence; and knowledge the landlord acquired prior to the passage of Costa-Hawkins could have been applied by her after the passage of the legislation.

The landlord's petition seeking a determination pursuant to Rules ß1.21 was denied because the ALJ found that the subject unit is the tenant's principal place of residence. On appeal, the landlord claims that: the tenant spends the majority of his time at a second home in Inverness, where his vehicle is registered; the tenant took a Homeowner's Exemption on the Inverness property until after the petition was filed; there is an error in the decision as to the date the tenant acquired the Inverness property; and the ALJ gave inappropriate weight to the tenant's testimony and omitted relevant facts that weigh in favor of the landlord.

The tenant's petition alleging unlawful rent increases was denied because the Administrative Law Judge (ALJ) found that the tenant's unit is exempt from Rent Board jurisdiction as a newly constructed unit pursuant to Costa-Hawkins. On appeal, the tenant argues that: the building was constructed before 1995 and therefore the units are not newly constructed; a certificate of occupancy was not issued after February 1, 1995; there has been existing residential use and any certificate of occupancy issued in the future should not have retroactive effect; the building is also not exempt as substantial rehabilitation; the ALJ's determination should have been made pursuant to the provisions of Rules ß1.17(g) and statutory procedural requirements, which should have been strictly construed; the Fire Department cannot issue temporary certificates of occupancy; the permits proffered by the landlord did not qualify for temporary certificates of occupancy; the ALJ failed to consider the effect of the expiration of the relevant permits; and no lawful conversion of the subject unit has occurred and the unit is therefore subject to the jurisdiction of the Rent Ordinance, which renders the rent increases null and void. Due to the absence of a Neutral Commissioner, consideration of this appeal was continued from the May 22nd meeting.

G. Simone Brixel, a tenant at 555 Florida Street, told the Board that she is German and "in Germany, we follow the laws." Ms. Brixel said that the Ordinance says the building has to have a Certificate of Occupancy, and the Florida Street building doesn't have one. Ms. Brixel told the Commissioners that they are there to protect tenants. She believes that "money buys everything in this City," which is unfair.

H. Val Steele, one of the landlords at 14th Avenue, said that the "spirit of rent control" and the provision of affordable housing are not being protected. She said that the Commissioners were acting as "social advocates" as opposed to protecting landlords' rights. Ms. Steele alleged that the tenant's children never lived in the subject unit and that he had defrauded Marin County and his insurance company. Ms. Steele believes that "anyone who can afford a second home shouldn't be protected by rent control."

The Commissioners received the following communications:

A. An article from BeyondChron regarding the status of SB 464.

B. An article from the New York Post regarding a successful lawsuit filed by a tenant due to noise from a neighboring unit.

June 26th & July 3rd, 2007 - NO MEETINGS

July 10, 2007

Parkmerced and 2 other appeals

President Gruber adjourned the meeting at 7:25 p.m.