Topic No. 312: Tenant Objections to a Capital Improvement Petition

There are several grounds upon which tenants may object to a Capital Improvement Petition. If a tenant cannot attend the hearing, he or she can submit a written objection before the hearing or send a person to the hearing with written authority to represent the tenant at the hearing.

Permissible objections to a capital improvement petition include the following:

  • The work claimed was not performed;
  • The work performed was necessary due to the deferred maintenance of the current owner;
  • The costs are excessive or unreasonable;
  • The work performed inside the tenant’s unit was not necessary for health or safety reasons or to reduce excessive maintenance costs; and/or
  • The work is more luxurious and costly than necessary, considering the socioeconomic status of the building’s existing tenants, and it was not necessary for reasons of health, safety or excessive maintenance costs.

Even in the absence of a tenant objection, the cost of a capital improvement will not be certified if the work was performed in order to correct a code violation for which a notice of violation remained unabated for 90 days, unless the landlord made timely good faith efforts to complete the work within the 90-day period, but was unsuccessful due to circumstances beyond the landlord’s control.

Habitability problems that either preceded the work or were caused by the work are not necessarily defenses to the passthrough of the costs, but may be grounds for a separate tenant petition for a reduction in rent based on a decrease in housing services.

If payment of the capital improvement passthrough would present a financial hardship for a tenant, he or she may seek relief from payment of the passthrough by filing a Tenant Financial Hardship Application with the Rent Board. A tenant may file a Hardship Application at any time after receipt of a capital improvement rent increase notice or after the Rent Board issues a written decision on the Capital Improvement Petition. Once the tenant has filed the Hardship Application, the tenant does not have to pay the capital improvement passthrough unless the Rent Board issues a final decision denying the Hardship Application. If the Hardship Application is denied, the tenant will have to pay the capital improvement passthrough retroactive to the effective date indicated on the rent increase notice. If the Hardship Application is granted, relief from payment of the capital improvement passthrough may be for an indefinite period or for a limited period of time, depending on the nature of the tenant’s financial hardship.

To obtain a copy of the Hardship Application form, you can visit the Forms Center on our website at www.sfrb.org. The Hardship Application form is also available at the Rent Board’s office.

 

November 2016