August 21, 2001

July 16, 2001

NOTICE OF PUBLIC HEARING

DATE: AUGUST 21, 2001

TIME: 6:00 P.M.

PLACE: CITY HALL
               ROOM 406
               SAN FRANCISCO, CALIFORNIA

THE RENT BOARD COMMISSIONERS INVITE THE PUBLIC TO COMMENT ON PROPOSED CHANGES TO THE RULES AND REGULATIONS GOVERNING THE RESIDENTIAL RENT STABILIZATION AND ARBITRATION ORDINANCE, CHAPTER 37 OF THE SAN FRANCISCO ADMINISTRATIVE CODE.

THE COMMISSION IS TAKING PUBLIC COMMENT ON PROPOSED NEW SECTION 6.15C(3), BELOW. THE INTENT OF THE NEW SECTION IS TO REQUIRE THAT MASTER TENANTS PAY AN EQUITABLE, PROPORTIONAL SHARE OF THE RENT FOR THE UNIT.

6.15C(3) Partial Sublets. In the event a master tenant does not sublease the entire rental unit, as anticipated in Section 37.3 (c), then the master tenant may charge the subtenant(s) no more than the subtenant(s) proportional share of the total current rent paid to the landlord by the master tenant for the housing and housing services to which the subtenant is entitled under the sub-lease.

(a) The allowable proportional share of total rent may be calculated based upon the square footage shared with and occupied exclusively by the subtenant; or an amount substantially proportional to the space occupied by and shared with the subtenant (e.g. three persons splitting the entire rent in thirds) or any other method that allocates the rent such that the subtenant pays no more to the master tenant than the master tenant pays to the landlord for the housing and housing services to which the subtenant is entitled under the sublease. In establishing the proper initial base rent, additional housing services (such as utilities) provided by, or any special obligations of, the master tenant, or evidence of the relative amenities or value of rooms, may be considered by the parties or the Rent Board when deemed appropriate. Any methodology that shifts the rental burden such that the subtenant(s) pays substantially more than their square footage portion, or substantially more than the proportional share of the total rent paid to the landlord, shall be presumed to be in excess of the lawful limitation.

(b) The master tenant or subtenant(s) may petition the Board for an adjustment of the initial rent of the subtenant.

(c) If a portion of a capital improvement passthrough or a utility increase is allocated to a subtenant, it must be separately identified and not included in the subtenant’s base rent. Such amounts are subject to the rules herein and must be discontinued or recalculated pursuant to the applicable rules. Any amount that is improperly calculated or not properly discontinued shall be disallowed.

(d) In the event of any dispute regarding any allowable increase, or allocation, or any rental amount paid that is not rent, the subtenant may file a claim of unlawful rent increase to have the matter resolved between the subtenant and master tenant, as if the master tenant were the owner of the building. Disallowed or improper increases, shall be null and void.

(e) For any sublease entered into on or before _____________ [effective date of new rule] where the sublease rent was not calculated as provided for herein, the master tenant shall have six months from the effective date of this regulation to notice an adjusted proper rent and refund any overpayments paid after the effective date of this section. No petitions alleging overpayments may be filed during this time.

(f) For any sublease entered into after ____________ [effective date of new rule] where the sublease rent was not calculated as provided for herein, the portion of the subtenant’s rent that is in excess of the amount allowed pursuant to this Section 6.15C(3) shall be null and void.

You may either comment at the Public Hearing and/or submit written comments. If you would like to submit written comments, it is requested that they be received at the Department no later than 5 p.m. on Monday, August 13th, 2001, so that the Commissioners can be mailed your comments and review them prior to the hearing. Written comments may also be submitted at the hearing. Please submit 12 copies of your comments in order to facilitate their distribution. You will be able to address the Commissioners during the public comment period at the hearing.

dsw/Bd.Mtgs./Pub.Not./1.21/6/01