October 7, 2008

Commissioner Beard appeared on the record at 6:05 p.m.; Commissioner Marshall arrived at the meeting at 6:07 p.m.; and Commissioner Murphy appeared at 6:20 p.m.

MSC: To approve the Minutes of September 16, 2008.

(Henderson/Hurley: 5-0)

A. Attorney James Coy Driscoll, representing the tenant at 400 Dolores Street ((AL080095), told the Board that the tenant requested additional keys to the unit, but that the landlord refused due to "safety and security." Mr. Driscoll maintained that the landlord is trying to replace the Board of Supervisor's judgment, and asked that the Board deny the appeal.

The landlord's petition for certification of capital improvement costs was dismissed due to his failure to appear at the properly noticed hearing. The landlord appeals, attaching the requisite Declaration of Non-Receipt of Notice of Hearing.

The tenant's hardship appeal of a decision granting utility passthroughs was dismissed because of the tenant's failure to appear at the properly noticed hearing. The tenant appeals, claiming that she is 81 years old, her memory is poor and she wasn't feeling well on the day of the hearing.

The tenants' petition alleging substantially decreased housing services due to the landlord's unannounced entries into the unit was granted and the landlord was found liable to the tenants in the amount of $200.00. The landlord failed to appear at the hearing and provides a Declaration of Non-Receipt of Notice of Hearing with the explanation that he was out of the country at the time and his mail was on hold.

The tenant's petition alleging decreased housing services was denied because the ALJ found that the tenant failed to prove that the landlord's agent sprayed toxic chemicals in his refrigerator. The tenant appeals, claiming that he witnessed the pest exterminator spray the refrigerator and the food and meat that were inside.

The tenant's petition alleging decreased housing services due to the landlord's failure to provide her with additional keys to the unit was granted and the ALJ found the landlord liable to the tenant in the amount of $50.00 per month. On appeal, the landlord maintains that: the Ordinance requires that extra keys be provided for specific delivery persons or guests, and not just to be generally available in the event of deliveries or guests; housing services have not been decreased as security has been enhanced; the tenant failed to meet her burden of proving she has suffered a reduction in services; and it is contrary to the policy goals of the Ordinance to require that landlords allow every tenant to have additional keys to hand out to unspecified visitors.

The landlord's Petition for Extension of Time to do Capital Improvement Work was denied because the ALJ found that the landlord had not obtained all the necessary permits; did not timely file the Petition; and that the landlord's estimate of time to complete the work was unreasonable. On appeal, the landlord claims that: the ALJ paid greater attention to evidence supplied by the tenant than that supplied by the landlord; the tenant was the cause of the delays; and the landlord's inexperience in these matters caused unintentional procedural mistakes.

The tenant's petition alleging decreased housing services and an unlawful rent increase was granted, in part, and the Master Tenant was found liable to the tenant in the amount of $40.00 for rent overpayments and $956.00 due to habitability problems in the subject unit, an artists' community. The Master Tenant appeals, maintaining that: he is suffering financial hardship as a result of the tenant's claims; the wiring in the unit was not unsafe until the tenant intentionally altered it; the Master Tenant promptly repaired the wiring after receiving notice of the problem; the area with the leaks was not part of the tenant's unit; the tenant did not request space heaters, which would have been provided to adequately heat the unit; and the Master Tenant was unaware of the provisions for lawfully passing on increased utility costs.

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

A. A Pending Litigation Status Report from Senior Administrative Law Judge Tim Lee.

B. Several articles from BeyondChron, the S.F. Chronicle, the S.F. Examiner and the Central City Express.

C. A Memorandum from City Attorney Dennis Herrera regarding political activity by City officers and employees.

D. A Memorandum from Senior Administrative Law Judges Sandy Gartzman and Tim Lee regarding Utility Passthrough Regulation 6.16.

E. A letter from the Golden Gateway Tenants Association requesting amendments to Rules ß6.16.

The Board continued their discussion of issues that have come up in conjunction with the Petition for Extension of Time process. Currently, in order for the landlord's petition to be granted, the regulations require that the landlord have all necessary permits prior to filing the petition. The Board's ALJs often deny petitions for lack of all of the necessary permits, even when the landlord's estimate of additional time is reasonable and the ALJ does not believe the landlord is acting in bad faith. Commissioner Murphy pointed out the amount of necessary work often cannot be foreseen prior to starting the project, which may take longer than anticipated. He suggested that landlords ought to get their petitions granted if they are acting in good faith, but with the requirement that they pay tenants the differential between their old and new rent if they are out of possession for more than ninety days. Senior ALJ Tim Lee told the Board that they could consider the permit requirement, similar to the requirement for a breakdown of the work to be performed, as evidentiary in nature, going to the reasonableness of the landlord's time estimate. Senior ALJ Gartzman pointed out the need for tenants to have some certainty as to when they will be able to move back in to their unit. Commissioner Mosbrucker also pointed out that clarification is needed as to how much time should be allowed for the tenant to reoccupy the unit, perhaps looking to Rules ß12.15 for guidance. The Commissioners asked staff to draft a Memo setting out the various proposals discussed above, for continued discussion at the next meeting.

B. Phil Page of the Golden Gateway Tenants Association put forth a proposal to amend Rules ß6.16, which the Association believes to an "unfair transfer of funds from tenants to landlords." The proposal would increase the base year utility costs by the annual allowable increases before comparing that figure to the comparison year costs to determine the amount of the passthrough. Mr. Page said that the Board's adoption of this methodology wouldn't cure past injustices, but would stop the bleeding going forward.

The Board discussed a Memorandum from Senior ALJs Sandy Gartzman and Tim Lee on Rules ß6.16, reminding the Board that a new base year must be established every five years for landlords whose initial base year is 2002; and pre-2002 base year costs must be adjusted every five years to reflect the increase or decrease in utility costs during the five-year period. These requirements will be taking effect as of January 1, 2009, and staff expects there to be some confusion among landlords and tenants concerning the necessary calculations. Additionally, the number of utility passthrough petitions has increased each year due to new base years for new tenants, although few tenant objections are filed and most petitions are generally granted without a hearing. Staff provided the Board with a number of policy options, including: leaving the current regulation in effect as is; simplifying the process by eliminating the different base years for different tenants and using the immediately preceding two calendar years for all tenants; examining whether a petition-filing requirement is still necessary; including utility costs as part of a petition for increased operating and maintenance expenses; adopting the proposal put forward by the Golden Gateway Tenants Association; and/or any other possible approaches to dealing with increases in utility costs. Commissioner Mosbrucker expressed her opinion that it would be best to simplify the process. The Board asked that staff run some numbers, and present the Board with illustrations of the numerical consequences of adopting any of the above alternatives for further discussion at the next meeting.

President Gruber adjourned the meeting at 7:35 p.m.