July 20, 1999

President Wasserman called the meeting to order at 6:05 p.m.

II. Roll Call

Commissioners Present: Bierly; Gruber; Marshall; Wasserman.
Commissioners not Present: Becker; Lightner; Mosser.
Staff Present: Grubb.

Commissioner Murphy appeared on the record at 6:10 p.m.; 
Commissioner Justman appeared on the record at 6:25 p.m.

III. Approval of the Minutes

MSC: To approve the Minutes of July 6, 1999.
(Gruber/Marshall: 3-0)

IV. Consideration of Appeals

A. 71 Sharon St. T001-69A & T002-06R
(Cont. from 7/6/99)

The tenants’ petition alleging decreased housing services was granted, in part, and the landlords were found liable in the amount of $2,490.00 due to code violations on the premises. Additionally, the tenants’ failure to repair claim was granted and an annual rent increase was deferred for two months. On appeal, the landlords maintain that certain of the repairs having to do with the physical appearance of the unit have been effectuated; the rent reductions granted for the wall damage should terminate at an earlier time; and that the damage to the walls in the unit was not substantial. 

MSC: To accept the landlord’s appeal and remand to the hearing officer on the record, if possible, to determine the date the holes were repaired and determine the amounts owed.
(Gruber/Murphy: 3-0)

MSC: To deny the tenants’ appeal. 
(Gruber/Murphy: 3-0) 

B. 761 Treat Ave. T001-60A
(Cont. from 6/1/99)

The tenant’s petition was denied as to claims of unlawful rent increase and the landlord’s failure to repair. A claim of decreased housing services was granted, however, and the landlord was found liable to the tenant in the amount of $1,885.00. The landlord failed to appear at the second hearing held in this case and, on appeal, claims not to have received the Notice of Hearing or copies of the "complaint." After having been sent copies of the petition and Declaration of Non-Receipt of Notice of Hearing, nothing further was received from the landlord. At the meeting on June 1, 1999, it was the consensus of the Board to continue this matter in order for staff to attempt to contact the landlord through certified mail. 

MSC: To deny the appeal.
(Wasserman/Marshall 3-0) 

C. 3751 Cesar Chavez (Army) St. T001-71A

The tenant’s petition alleging unlawful increases in rent was granted, and the landlords were found liable to the tenant in the amount of $16,560.00. The subject two-unit building had been exempt from Rent Board jurisdiction until the death of one of the owners in 1987. Since the owner died intestate, the Court set aside a Homestead to his wife, the surviving spouse, and distributed a one-third interest in the property to her, and a 1/3 interest to each of the couple’s two daughters. Therefore, the property was no longer exempt at the time that rent increases were given in 1987, 1989, and 1992. The current owners took title to the property in 1998. On appeal, they assert that the hearing officer misinterpreted and misapplied applicable law; that there was insufficient evidence presented; and that there were irregularities in the conduct of the hearing.

The landlord appellant requested that the matter be continued so that the parties might be able to settle this matter themselves. The Board agreed to continue the matter until August 17th so that the parties can try to achieve resolution.

D. 211 Cornwall St. T001-96R

The tenant’s appeal was filed ten months late because the tenant asserts that he came in to the Rent Board office and was not advised by the counselor with whom he spoke that he could appeal the decision on the grounds of financial hardship. The landlord’s petition for certification of capital improvement costs for twelve units was granted in July of 1998. One tenant now appeals the decision, claiming that imposition of the $80.56 passthrough presents him with a financial hardship, and that he did not realize that he could appeal on that basis, since the decision does not so indicate.

 MSC: To find good cause for the late filing of the appeal.
(Marshall/Wasserman: 4-0)

MSC: To accept the tenant’s appeal and remand the case for a hearing on the claim of financial hardship.
(Marshall/Wasserman: 4-0) 

E. 3414 - 25th St. #1 T001-95R
The tenant’s appeal was filed two days late because the Dismissal of the tenant’s petition was not mailed to counsel for the tenant, who does not speak English. 

MSC: To find good cause for the late filing of the appeal.
(Gruber/Wasserman: 3-1; Murphy dissenting) 

The tenant’s petition alleging decreased housing services was dismissed because the tenant, who does not speak English, appeared for two mediations unaccompanied by a translator after having been informed it would be necessary for her to procure one. On appeal, the tenant asserts that the first mediation session did not proceed because the landlord was unprepared; that the Rent Board was obligated to procure the services of a translator for the tenant; and that the grounds for dismissal contained in Rules and Regulations Section 11.16 are not present in this case.

The Commissioners continued consideration of the tenant’s appeal so that the Department could ascertain from staff exactly what the tenant was told concerning translation issues and her hearing.

F. 447-1/2 - 4th Ave. T001-98R

The landlord’s petition for certification of capital improvement costs to three units was granted. The tenants in one unit appeal, claiming that the $20.49 passthrough presents them with a financial hardship. 

MSC: To accept the tenants’ appeal and remand the case for a hearing on the claim of financial hardship.
(Marshall/Murphy: 4-0) 

G. 730 Stockton St. T001-72A
The tenant’s petition alleging unlawful rent increases was granted and the landlord was found liable in the amount of $3,134.92 because a capital improvement had been included in base rent and had not been discontinued upon having been amortized. The landlord’s appeal was accepted in order for a rent increase that was within the annual increase limitations but technically defective to be corrected, and not declared null and void. The resulting liability to the landlord was reduced to $2,364.90. The landlord appeals the remand decision, claiming that the hearing officer misapplied the banking provisions of the Rules and Regulations; that the landlord did not have a chance to cross-examine the tenant regarding the unlawful rent increase; and that the hearing officer is biased against him. 

MS: To deny the landlord’s appeal. 
(Marshall/Justman: 2-2; Gruber, Murphy dissenting)

The Commission agreed to continue the consideration to the next meeting when there would be a full complement of voting members.

H. 1582 - 22nd Ave. T001-73A

The landlords’ petition for a rent increase based on comparable rents was denied. The landlord was, however, found liable to the tenant in the amount of $3,138.00 due to overpayments in rent. The landlord appealed the decision and the case was remanded to the hearing officer to properly apply Rules and Regulations Section 1.12(b) and to consider the landlord’s allegation that the unit was furnished in the comparables analysis. In the Decision of Hearing Officer on remand, the hearing officer found that the furniture did not increase the value of the house and therefore did not warrant reversal of denial of the comparables petition, but adjusted the amount of overpayment to $1,974.00. The landlord appeals the remand decision, asserting that: there is an error as to the calculation of rent overpayments; the hearing officer failed to make a determination as to comparable rents for furnished houses; the landlords have not been provided an opportunity to augment their comparables evidence as to furnished units; there is an error in the decision as to the month that a rent increase was given in 1994; and that the hearing officer is biased in favor of the tenants. 

MSC: To deny the landlord’s appeal.
(Justman/Marshall: 4-0)

I. 640 Eddy St. T001-99R

The tenant’s petition alleging decreased housing services was dismissed due to his failure to appear at the properly noticed hearing. On appeal, the tenant claims to have missed the hearing because he was ill, and submits a statement from a doctor to that effect. 

MSC: To accept the appeal and remand the case for a new hearing. (Marshall/Justman: 3-1; Gruber dissenting) 

J. 733 Waller St. T001-74A

The landlord’s appeal was filed five and one-half weeks late because he was out of the country at the time that the decision was mailed. 
 
MSC: To find good cause for the late filing of the appeal. 
(Marshall/Gruber: 4-0) 
 
The landlords’ petition for certification of capital improvement costs for three of six units was granted, in part. On appeal, the landlords claim that the cost of the back stairs should have been allocated to four, rather than two, units; and that the cost of painting the rear of the building should only be allocated to four, and not all six, units. 

MSC: To accept landlord’s appeal and remand the case to the hearing officer on the record for a technical correction as to the allocation issue with respect to the stairs; the appeal is denied as to the issue of cost allocation for the exterior painting.

(Marshall/Wasserman: 4-0) 

V. Communications
  
In addition to correspondence concerning cases on the calendar, the Commissioners received the following communications:

A. A copy of the Department’s June statistics.

B. A copy of the 5th District Court of Appeal’s decision in the matter of Galland v. City of Clovis concerning a rent-controlled mobile home park.

VI. Director’s Report
   
Director Grubb reported that the Commission’s proposed amendments to conform the Rent Ordinance with the requirements of Costa-Hawkins will be heard on August 3rd at Housing and Social Policy. The Ellis amendments are tentatively scheduled to be heard on August 17th before the same Committee of the Board of Supervisors.

Commissioner Murphy indicated that the landlord community was concerned about a conflict between Section 6.14 of the Rules and Regulations and Costa-Hawkins and could be expected to make an issue of it at the Rent Board or at the Board of Supervisors in the near future. Commissioner Wasserman wanted it noted for the record that it was incumbent upon the landlord community or the City Attorney’s office to motivate any changes that they may desire. She stated that it was not the duty or responsibility of the neutral commissioners to do this. 

VII. Remarks from the Public
  
Al Browning complemented the Commissioners on their diligence and hard work on the issues before them. He also suggested that better signage at the guard station be provided as the guard on duty was unaware of the Commission meeting location site.
 
VIII. Calendar Items
 
July 27, 1999 - NO MEETING
  
August 3, 1999 
 
11 appeal considerations (1 continued from 7/6/99 and 2 from 7/20/99)
 
Old Business:

A. "De Minimus Rule"
B. Interest Rate When Capital Improvement Work is Financed With a Variable Rate Mortgage
C. Rules and Regulations Sections 6.14 and 6.15

IX. Adjournment
  
President Wasserman adjourned the meeting at 7:20 p.m.