MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,
Tuesday, May 3, 2005 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 6:10 p.m.
II . Roll Call
Becker; Gruber; Henderson; Hurley; Marshall, Mosbrucker, Mosser; Wasserman.
Commissioners not Present:
Commissioner Justman appeared on the record at 6:20 p.m.
III. Approval of the Minutes
MSC: To approve the Minutes of April 12, 2005.
IV. Remarks from the Public
A. Robert Pender, Vice-President of the Parkmerced Residents’ Organization (PRO), read a letter he wrote to Bert Polacci, General Manager of Parkmerced.
V. Consideration of Appeals
A. 1221 Folsom St. AT050115
Two subtenants filed petitions alleging that the Master Tenant charged them more than a proportional share of the rent. The petitions were granted and the Master Tenant was found liable to the subtenants in the amounts of $1,699.06 and $1,431.22. The Master Tenant appeals the decision on the grounds of financial hardship.
MSC: To accept the appeal and remand the case to the Administrative Law Judge for a hearing on the Master Tenant’s claim of financial hardship and to establish a repayment plan, if appropriate. (Gruber/Hurley: 5-0)
B. 2124 Hyde St. #3 AL050110
The landlord’s petition for certification of the costs of the installation of electric heaters in six units was granted. The tenants in one unit appealed, asserting that they should not have to pay for the cost of a 2000 watt third heater in their unit, since it was unnecessary. The Board accepted the tenants’ appeal and remanded the case to the Administrative Law Judge on the record to omit the cost of the third heater in the tenants’ unit from the certified passthrough. The landlord appeals the remand decision, maintaining that: the landlord pulled a permit for a supplemental rather than replacement heating system because he wanted to safeguard the tenants’ need for heat during the conversion process; the third heater was installed at a higher cost to the owner and at the tenants’ request; and the addition of the third heater exceeded the City’s wattage requirements for the unit.
MSC: To deny the appeal. (Marshall/Becker: 5-0)
C. 909 Wisconsin, Unit #1 AT050114
The tenants’ petition alleging decreased housing services was granted, in part, and the landlords were found liable to the tenants in the amount of $1,750.00. The tenants appeal, claiming that: the rent reductions granted were inadequate; the Decision was inconsistent; evidence was provided which proved the tenants’ claims regarding water damage and termite infestation; and the landlord admitted at the hearing that there are no smoke alarms in the unit.
MSC: To recuse Commissioner Mosbrucker from consideration of this appeal. (Becker/Marshall: 5-0)
MSC: To accept the appeal and remand the case to the Administrative Law Judge on the issue of the smoke detectors; a hearing will be held only if necessary. To deny the appeal as to all other issues. (Gruber/Hurley: 5-0)
D. 1445 Waller #1 AT050113
The tenant’s petition alleging decreased housing services due to unreasonable noise from the neighboring units was denied. On appeal, the tenant claims that he proved that: the landlord made verifiable promises that the unit was quiet prior to the tenant’s moving in; and the tenants in the unit to his left and above make levels of noise beyond that normally associated with apartment living.
MSC: To deny the appeal. (Gruber/Hurley: 5-0)
E. 917 Folsom #203 AL050111
The tenants’ petition alleging an unlawful increase in rent was granted and the landlords were found liable to the tenants in the amount of $5,200.00. The landlord appeals, asserting that: the Administrative Law Judge erred in finding that the base rent for the premises was $400 rather than $866.66 per month; there was no increase in the base rent but, rather, a reduction from $866.66 to $800.00 per month; the lease did not commence on November 1, 2003 because the tenants failed to pay the required security deposit; the rent receipts show that the $400 rent payment was for a one-half month period, and 3-day notices were issued for payment of the remainder; and the landlords’ liability should be limited to the time period after they became owners of the property.
MSC: To recuse Commissioner Mosser from consideration of this appeal. (Hurley/Marshall: 5-0)
MSC: To deny the appeal. (Becker/Marshall: 3-2; Gruber, Hurley dissenting)
F. 1301 – 31 st Ave. AT050112
The landlord’s petition seeking a determination pursuant to Rules Section 1.21 was denied because the Administrative Law Judge found that the tenant is a “Tenant in Occupancy” at the subject unit. The landlord appealed and the Board remanded the case to vacate the decision and find that the tenant is not a “Tenant in Occupancy” within the meaning of Rules Section 1.21. The tenant appeals the remand decision, arguing that: her actions from July 1997 to June 2001 should not be taken into account since Section 1.21 of the Regulations was not yet in effect; her absence from June 2001 to June 2005 is a reasonable temporary absence because she has been attending school; the other indicia of her residing in Florida are the result of her living there while attending school; and the landlord should have been required to act in good faith to notify the tenant and resolve the issue before seeking a 1.21 determination.
MSC: To deny the appeal. (Gruber/Hurley: 3-2; Becker, Marshall dissenting)
G. 1167 Bush #506 AT050117
The tenant’s petition requesting a determination as to the proper base rent and whether the utility passthrough was correctly calculated was granted in part and denied in part. The lawful base rent was determined to be $420.55 and a utility passthrough originally imposed on December 1, 2001 was discontinued. The tenant appeals, claiming that: the Decision is in error because the rent increases were based on a defective notice which mis-stated the base rent and a notice that was “non-existent.”
MSC: To deny the appeal. (Gruber/Hurley: 3-2; Becker, Marshall dissenting)
The Board received the following communications:
A. A copy of an article in the April 27 th Examiner regarding a Superior Court ruling by Judge James Warren finding that recently passed increased relocation payments violated the spirit of the Ellis Act.
B. A letter from Mayor Gavin Newsom to members of the Building Inspection Commission informing them that harassing or discriminatory comments are not to be tolerated at future public meetings.
C. A Memorandum from Senior Administrative Law Judge Sandy Gartzman regarding implementation of Ordinance Section 37.3(a)(5)(B), regarding the passthrough of water bill rate increases attributable to the issuance of 2002 Proposition A bonds.
VII. Director’s Report
Acting Executive Director Wolf discussed communication from staff to the Commissioners, and it was agreed that e-mail is preferable to fax, whenever possible. Ms. Wolf agreed to look into the possibility of acquiring a scanner for the transmission of documents not generated by the agency. Ms. Wolf also informed the Board that on April 25, 2005, Judge Warren ruled that the recent amendment to the Rent Ordinance regarding relocation payments to all tenants evicted under the Ellis Act violated the Ellis Act since the cost of relocation could potentially prevent an owner from going out of the rental business. The City has sixty days to appeal the court’s ruling. If the court’s ruling that the amended relocation ordinance is illegal is upheld, then the prior relocation ordinance limiting relocation payments to low-income households and elderly and disabled tenants would be back in effect.
VIII. Old Business
Water Bill Increase Passthroughs Resulting from Issuance of Water System Improvement Revenue Bonds (Ordinance Section 37.3(a)(5)(B))
Water bonds related to the passage of Proposition A in November 2002 are currently being issued and resulting increases in water bills will occur as of July 1 st . Landlords are allowed to pass through to tenants 50% of the increase in their water bills that is attributable to the issuance of these water system improvement bonds, and can do so every month. Senior Administrative Law Judge Sandy Gartzman went over a Memorandum she prepared raising questions and implementation issues for the Board’s consideration. Commissioner Justman was concerned that requiring that the passthrough be imposed monthly would place too great an administrative burden on landlords; while allowing it to be “banked” for a considerable period of time could result in large increases to tenants. After discussion, the Board preliminarily decided as follows: landlords may impose the passthrough monthly; alternatively, landlords may impose the passthrough on an annual basis, on the tenant’s anniversary date, except for a 6-month passthrough which may include bills for the 6-month period commencing on July 1, 2005, with the passthrough to be imposed annually thereafter; if a tenant moves in during a calendar year, the landlord may collect a pro-rata share of the passthrough based on the number of months in the year the tenant resides in the unit; tenants can file a hardship application for relief from the passthrough and the Administrative Law Judge shall determine whether the passthrough has been correctly calculated before deciding whether the passthrough creates a financial hardship for the tenant; upon noticing the passthrough the landlord does not have to provide copies of all the water bills, but the notice shall state that the bills are available upon request; and a water bond passthrough cannot be imposed during the term of a fixed term lease, but may be imposed on the anniversary date upon expiration of the lease.
Staff was asked to draft proposed regulations reflecting the above decisions, which will be discussed at a future meeting and put out for Public Hearing.
IV. Remarks from the Public (cont.)
B. Landlord David Patel of the property at 917 Folsom #203 (AL050111) said that the tenants had paid $200 per week for three months, and were notified that if they wanted to become permanent tenants, the rent would be $800 per month. Mr. Patel said that the tenants kept moving out because they couldn’t come up with the security deposit, and at no point did they pay less than $800 per month.
C. Robert Pender of PRO said that there are currently two landlords at Parkmerced, and there will possibly be a third. With all the trees, grass and lawn at Parkmerced, Mr. Pender believes that water passthroughs will be a “horrible mess” and he “feels sorry for anyone who is around to see it.”
IX. Calendar Items
May 10, 2005 - NO MEETING
May 17, 2005
6 appeal considerations
Old Business: Water Bond Passthroughs
President Wasserman adjourned the meeting at 8:00 p.m.