March 24, 1998

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

Commissioners Present: Becker; Bierly; Gruber; Lightner; Marshall; Moore; Wasserman.
Commissioners not Present: Justman.
Staff Present: Grubb; Wolf.

Commissioner Murphy appeared on the record at 6:07 p.m.; Commissioner Mosser arrived at 6:10 p.m.

MSC: To approve the Minutes of March 3, 1998.
(Becker/Gruber: 5-0)

A Public Hearing on amendments to Rules and Regulations Section 6.13, to clarify the meaning of that Section; and proposed new Rules and Regulations Section 6.15 pertaining to replacement roommates, prohibitions against subletting and Master Tenants commenced at 6:19 p.m. and concluded at 7:03 p.m. The following individuals testified:

1. Robert Pender of the Tenants Network spoke in support of both proposals, because he is in favor of children and, the more written notice, the better.

2. Landlord Allen Chase felt that Section 6.13 should apply only to replacement tenants, and not additional occupants; that 6.14 occupants are not tenants; and that landlords should be allowed to charge additional rent or they will not grant permission for additional occupants. In his opinion, the rest of the proposed changes were reasonable.

3. Tenant Amy Swanson informed the Board that her landlord is currently refusing consent for a replacement roommate, and that she didnt realize that replacing a roommate constituted subletting.

4. Brad Hune, a counselor for the Housing Rights Committee, told the Board that they have seen a huge increase in subletting issues among the tenants who avail themselves of their services and expressed his support for the proposed Rules changes.

5. Landlord Jim Patiris said that landlords should be able to control who lives in their buildings; that there are increased costs associated with additional occupants; and that an operating and maintenance expense increase goes to all the tenants in the building, which is unfair.

6. D. Michael asked what happened to keeping agreements and stated his opinion that any favor now becomes a housing service. He is not a property owner.

7. Landlord Andrew Long told the Board that most Master Tenants dont realize that they are, indeed, Master Tenants; that the proposals entrench the right to musical roommates; and that this will lead to landlords putting absolute prohibitions against subletting in their rental agreements. He reminded the Commissioners that they are not the Contract Board.

8. Landlord George A. Schiessl said that kids are expensive! and asked if a landlord could throw someone else out when there is the maximum number of tenants in a unit and a baby is born; he also felt that, if tenants dont read the rental contract, its their problem.

9. Rob Huddleston from the Professional Property Management Association spoke in favor of Section 6.15 because it is fair.

10. Landlord J. B. Alegiani opined that all future leases will prohibit subletting, which will not serve tenants well, nor will the proposal help people with existing leases.

11. Landlord Peter Lewis stated that the proposed changes just make it so that landlords wont rent to roommates, and that the Board is impeding landlords ability to control their tenant profile.

12. Tenant Lee Heller stated her belief that housing is a public, and not private, concern; said that there is no rent control without vacancy control; and maintained that the City has no commitment to building low-income housing.

13. Tenant Fergal Moloney testified that without being allowed a replacement roommate, she will be paying extra rent for wasted space.

14. Tenant Michelle Cheiken told the Board that she recently settled an eviction lawsuit with her landlord based on the fact that there had been no written consent to her having moved into the unit; she believes that the landlords are currently refusing to effectuate repairs so that she will vacate the unit.

15. Anna Stern said that it is unfair that tenants rents are reduced when housing services are decreased, but rent increases are disallowed although costs go up when there are additional tenants in a unit. Additionally, since landlords are help responsible for the security of the premises, they should have control over who lives in their building(s).

16. Landlord Donna Robson explained a problem she is having renovating a unit with a revolving tenancy

17. Landlord John OCarroll spoke to what he sees as fairness issues, including the fact that additional occupants mean more noise, which affects other tenants in the building.

18. Landlord Al Goodwin stated his beliefs that the vast majority of landlords are unsophisticated, and use standard form leases which are inapplicable to rent control; that 99% of parties dont understand 95% of whats in their lease; and that, if the proposed Rules changes are passed, tenants will just be evicted for subletting.

19. Janan New, Director of the S. F. Apartment Association, asked questions regarding a Master Tenants ability to evict a subtenant without the involvement of the owner of the property.

20. A landlord remarked that the ratcheting up of the Regulations will drive out owner-occupants, which is not good for the City.

    After discussion, the Commissioners made and passed the following motions:

    MSC: To adopt revised Rules and Regulations Section 6.13. (Becker/Wasserman: 5-0)

    Rules and Regulations Section 6.13 has been amended for clarification purposes only, and now reads as follows:

    Section 6.13 Prohibition Against Agreements to Pay Additional Rent for Additional Occupants

    (Adopted April 8, 1986; Amended for Clarification March 24, 1998)

    No extra rent may be charged solely for an additional occupant to an existing tenancy (including a newborn child), regardless of the presence of a rental agreement or lease which specifically allows for a rent increase for additional tenants. Such provisions in written or oral rental agreements or leases are deemed to be contrary to public policy.

    MSC: To adopt proposed new Rules and Regulations Section 6.15. (Wasserman/Gruber: 4-1; Lightner dissenting)

    New Rules and Regulations Section 6.15 reads as follows below:

    Section 6.15 Subletting and Assignment

    (Effective March 24, 1998, except paragraphs (a) and (f) which are effective May 25, 1998)

    1. For agreements entered into on or after May 25, 1998, for purposes of this subsection (a), where a lease or rental agreement contains an enforceable absolute prohibition against sublet or assignment, breach of such covenant may constitute a ground for termination of tenancy pursuant to Section 37.9(a)(2) only if such prohibition was adequately disclosed to and agreed to by the tenant at the commencement of the tenancy. For purposes of this subsection, adequate disclosure shall include satisfaction of one of the following requirements:
       1. the prohibition against sublet or assignment is set forth in enlarged or boldface type in the lease or rental agreement and is separately initialed by the tenant; or

       2. the landlord has provided the tenant with a written explanation of the meaning of the absolute prohibition, either as part of the written lease or rental agreement, or in a separate writing.

    2. If the lease or rental agreement specifies a number of tenants to reside in a unit, or where the open and established behavior of the landlord and tenants has established that the tenancy includes more than one tenant, and, where a lease or rental agreement, whether oral or written, permits sublet or assignment or requires a landlords consent to sublet or assignment, or where an absolute prohibition against sublet or assignment has been waived, then the replacement of one or more of the tenants by an equal number of tenants, subject to subsection (c) below, shall not constitute a breach of the lease or rental agreement for purposes of termination of tenancy under Section 37.9(a)(2) of the Ordinance.

    3. 1. If a lease or rental agreement requires a landlord’s consent to sublet or assignment, the tenants inability to obtain such consent shall not constitute a breach of the lease or rental agreement for purposes of eviction under Section 37.9(a)(2), where the landlord has unreasonably withheld consent to such change. Withholding of consent by the landlord shall be deemed to be unreasonable if the tenant has met the following requirements:
          1. The tenant has requested in writing the permission of the landlord to the sublease or assignment prior to the commencement of the proposed new tenant’s or new subtenant’s occupancy of the unit;

          2. The proposed new tenant or new subtenant, if requested by the landlord, has completed the landlord’s standard form application, or, in the event the landlord fails to provide an application or has no standard form application, the proposed new tenant or new subtenant has, upon request, provided sufficient information to allow the landlord to conduct a typical background check, including credit information, income information, references, and background information;

          3. The tenant has provided the landlord five (5) business days to process the proposed new tenant’s or new subtenant’s application;

          4. The proposed new tenant or new subtenant meets the regular reasonable application standards of the landlord;

          5. The proposed new tenant or new subtenant has agreed to sign and be bound by the current rental agreement between the landlord and the tenant;

          6. The tenant has not, without good cause, requested landlord consent to a new tenant or new subtenant more than one time per existing tenant residing in the unit during the previous 12 months;

          7. The tenant is requesting replacement of a departing tenant or tenants with an equal number of new tenants.

       2. This subsection (C)(1) shall not apply to assignment of the entire tenancy or subletting of the entire unit.

    4. Where a lease or rental agreement, whether oral or written, permits subletting or assignment with landlord consent, or where an absolute prohibition against sublet or assignment is waived, and the lease or rental agreement specifies the number of tenants to reside in a unit, or where the open and established behavior of the landlord and tenants has established that the tenancy includes more than one tenant, failure of the landlord to consent to the replacement of one or more of the tenants by an equal number of tenants, subject to subsection (c)(1) above, may constitute a decrease in housing services pursuant to Section 10.10 of these Regulations.

    5. Nothing in this Section shall prevent the landlord from providing a replacement new tenant or new subtenant with written notice as provided under Section 6.14 that the tenant is not an original tenant as defined in Section 6.14(a) and that when the last of the tenant(s) who meet the latter definition vacates the premises, a new tenancy is created for purposes of determining the rent under the Rent Ordinance.

    6. 1. For any tenancy commencing on or after May 25, 1998, a landlord who is not an owner of record of the property and who resides in the same rental unit with his or her tenant (a "Master Tenant") may evict said tenant without just cause as required under Section 37.9(a) only if, prior to commencement of the tenancy, the Master Tenant informs the tenant in writing that the tenancy is not subject to the just cause provisions of Section 37.9. A landlord who is an owner of record of the property and who resides in the same rental unit with his or her tenant is not subject to this additional disclosure requirement.

       2. In addition, for any tenancy commencing on or after May 25, 1998, a Master Tenant shall disclose in writing to a tenant prior to commencement of the tenancy the amount of rent the Master Tenant is obligated to pay to the owner of the property.

The Board received correspondence regarding the proposed Rules and Regulations changes which were the subject of the Public Hearing and a letter from Allen Garfield, Esq., suggesting that the OMI Moratorium be amended so that elderly, disabled or catastrophically ill landlords be allowed to evict tenants in the above-mentioned protected categories.

Executive Director Grubb reported as follows:

1. The Commissioners Form 700 Economic Interest Statements must be filed with the Ethics Commission by April 1, 1998 in order to avoid penalties.

2. The Commissioners were all invited to attend a party at the Rent Board office on Wednesday, March 25th to celebrate the end of renovation and view the newly refurbished space.

3. It has been more than one year since the Board elected officers; nominations will be taken at the meeting on April 7th.

1. Landlord Allen Chase asked what happens if a landlord doesnt know the number of tenants on the premises, and expressed concerns regarding bad short-term tenants.

2. Landlord Katherine Nash also maintained that, if a landlord doesnt live on the premises, s/he wont know whos living there.

3. A landlord expressed his frustration that tenants dont follow application procedures, and just move in without asking.

March 31, 1998 - NO MEETING

April 7, 1998
6 appeal considerations (1 cont. from 3/3/98)
Old Business:

1. OMI Moratorium
2. Calculation of Imputed Interest on Capital Improvement Costs
3. Variable Rate Interest Loans for Capital Improvement Work

1. Request for Amicus: (S003-17E; 122 Baker St. #2)
2. Election of Officers

President Lightner adjourned the meeting at 10:00 p.m. Page of the Minutes of March 24, 1998