Topic No. 355: Tenant Petitions for Improper Utility Passthrough & Deferral of a Utility Passthrough Based on Financial Hardship

A tenant may file a petition at the Rent Board to challenge the imposition of a utility passthrough if the landlord has increased the tenant’s rent based on an increase in gas and electric costs but has either failed to file a petition with the Rent Board for approval of the utility passthrough or failed to file a utility passthrough calculation worksheet with the Rent Board. The landlord must first file a petition or a worksheet with the Board before giving the tenant notice of a rent increase for the utility passthrough. A tenant’s petition challenging an improper utility passthrough must be filed within one year of the effective date of the passthrough.

If the landlord has filed a petition for approval of the utility passthrough, the Rent Board will mail a copy of the petition to the tenant shortly after it is filed. The tenant will be given the opportunity to file written objections to the petition. The petition will be reviewed by an Administrative Law Judge and decided without a hearing unless the Administrative Law Judge determines that a hearing is required. If the petition is approved without a hearing, the landlord and tenant will receive a written decision in the mail approving the utility passthrough. If a hearing is required, the parties will receive written notice of the hearing date and time. The tenant may also raise objections to the utility passthrough at the hearing, and a decision will be issued after the hearing.

Where the landlord has filed a Utility Passthrough Calculation Worksheet instead of a petition, which is permissible in some circumstances, the landlord must serve the tenant with a copy of the worksheet, date-stamped by the Rent Board, with the notice of increase for the utility passthrough. The Rent Board will review 10% of all worksheets filed with the Board to determine if the passthrough is correctly calculated. If the Board determines that a hearing is required, the parties will receive written notice of the hearing date and time. If the landlord fails to serve the tenant with a copy of the worksheet or if the tenant believes that the landlord did not properly calculate the utility passthrough or used an incorrect room count, the tenant may file a petition at the Rent Board to challenge the imposition of the utility passthrough within one year of the effective date of the passthrough. A hearing will be scheduled and the landlord will have the burden of proving that the utility passthrough was imposed in accordance with the Rent Board rules.

A utility passthrough shall remain in effect for no more than 12 months. If the utility passthrough is not discontinued after 12 months, the tenant can file a petition at the Rent Board alleging an improper utility passthrough and seeking a refund of overpayments. There is no time limit for filing such a petition.

If payment of a utility 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 Financial Hardship Application must be filed within one year of the effective date of the utility passthrough. The tenant must wait to file the Hardship Application until the tenant has received a rent increase notice, a Utility Passthrough Calculation Worksheet or a Rent Board decision.  Once the tenant has filed the Hardship Application, the tenant does not have to pay the utility 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 utility passthrough retroactive to the date indicated in the rent increase notice. If the Hardship Application is granted, relief from payment of the utility 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 Tenant Petition form and/or the Tenant Financial Hardship Application form, you can visit the Forms Center on our website at www.sfrb.org. These forms are also available at the Rent Board’s office.

 

November 2016