New Interest Rate and Calculation Methodology Ordinance Effective as of August 4, 2002

New Interest Rate and Calculation Methodology Ordinance Effective as of August 4, 2002

The law governing interest payments, Chapter 49 of the Administrative Code, was amended in August 2002 and changed the method for calculating the interest rate. The Ordinance, 107-02, now authorizes the Rent Board to calculate this amount each year (Rent Ord. Section 37.6).Herein, the interest rate to be paid will the be the average of the 12 monthly "Discount Window" rates as posted by the Federal Reserve Bank. The rate will be calculated and announced by the Rent Board the first week of each January using the preceding 12 monthly rates ending December 31st. The rate will be in effect from March through February of each year.

 

The rate for this year (2002-03), 3.4%, will be in effect as of August 4, 2002 through February 28, 2003. For those doing calculations that will span both rate periods, the amount paid will have to include a calculation for those months while the rate was 5% (any date prior to August 4, 2002 and a calculation at 3.4% from the effective date of this ordinance, August 4, 2002,through February 28th, 2003. The new rate is NOT retroactive to this past March nor any time prior to the effective date of this ordinance.


Each new rate will be available on our automated information system, Menu No. 11 as soon as it is known, usually the first week of January. That 24-hour number is 415.252.4600. It is also available on our fax back service at 415.252.4660, Menu No. 111. Fact Sheet No. 3 will also provide this information each year.

 

Since September 1, 1983 through August 3, 2002, owners of San Francisco rental property have been required to pay 5% simple interest EACH year on any deposit held for at least one year. This includes any monies that the owner holds, regardless of what it is called. At the landlord"s option, the payment may either be made directly to the tenant or by allowing the tenant to deduct the amount of interest due from their rental payment. The Rent Board fee, which defrays the operation of the Rent Board, must be deducted from the interest payment, with some exceptions.