Topic No. 358: Petitions for Failure to Discontinue Capital Improvement Passthrough

In order to pass through capital improvement costs to tenants, the landlord must first file a petition and obtain Rent Board approval of the passthrough. The passthrough is not permanent, and may only be imposed for a limited period of time, which is referred to as "the amortization period." Depending on the type of capital improvement and the size of the building, the amortization period may be 7, 10, 15 or 20 years. The amount of the monthly passthrough and the amortization period will be specified in the Administrative Law Judge's decision in the capital improvement case.

The passthrough does not become part of the tenant's base rent, and it must be discontinued at the end of the applicable amortization period. If a landlord fails to discontinue a capital improvement passthrough at the appropriate time, the landlord will be liable to the tenant for any overpayments of the passthrough. The tenant may file a petition at the Rent Board to request a refund of the overpayments. There is no time limit for filing such a petition.

The petition will be scheduled for hearing. If the tenant proves that he or she overpaid a capital improvement passthrough, the Administrative Law Judge will issue a written decision ordering the landlord to refund all the overpayments.

To receive a copy of the Tenant Petition form, you can fax it to yourself through our Fax Back system by calling (415)252-4660, or visit our website at www.sfrb.org. The form is also available at our office.

June 2006

 

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