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September 02, 1997

September 02, 1997B>

 

 

 

MINUTES OF THE REGULAR MEETING OF
THE SAN FRANCISCO RESIDENTIAL RENT
STABILIZATION & ARBITRATION BOARD,

Tuesday, September 2, 1997 at 6:00 p.m. at
25 Van Ness Avenue, Suite 70, Lower Level

  1. Call to Order

    President Lightner called the meeting to order at 6:10 p.m.

  2. Roll Call

    Commissioners Present: Becker; Bierly; Gruber; Lightner; Moore; Mosser; Murphy; Wasserman.

    Staff Present: Grubb; Wolf.

    Commissioner Marshall appeared on the record at 6:15 p.m. and went off the record at 7:40 p.m.

  3. Approval of the Minutes

    MSC: To approve the Minutes of August 19, 1997.

    (Becker/Gruber: 5-0)

  4. Remarks from the Public

    President Lightner reminded the public in attendance that they were welcome to comment on any matter of interest to them, including matters scheduled on the Agenda. However, any evidence that was discussed would not be considered by the Commission in their consideration of any appeal. The following individuals then addressed the Board:

    1. Gerda Fiske pointed out that the case of Jose Morales at 572 San Jose Ave. (S001-02A & S001-03R) was remanded on the issue of tenant hardship. She was therefore surprised that hearing officer Dave Wharton acted as a mediator, rather than as an arbitrator, for much of the proceedings.

    2. Constance Kuck gave an overview of the history of Proposition I and stated her belief that housing is a human right.

    3. Jose Morales spoke in support of his appeal and expressed his gratitude for the enactment of the Sunshine Ordinance.

    4. Robert Pender stated his opinion that Jose Morales is a victim of injustice.

    5. Ara Tehralian, the landlord involved in the case at 572 San Jose Ave., cautioned the Board that, by not requiring Mr. Morales to obtain a roommate when there had previously been another occupant in the unit, the wrong message was being sent to other tenants.

  5. Consideration of Appeals

    1. 572 San Jose Ave. S001-02A & S001-03R
      (cont. from 8/19/97)

      This case involves a Proposition I Affected Unit. The tenant’s petition alleging unlawful increases in rent due to capital improvement passthroughs not having been discontinued and having been improperly included in base rent was denied due to the equitable defense of laches. The landlord’s petition for a rent increase based on comparable rents was granted, resulting in a rent increase for the unit in the amount of $312.60 (from $339.00 to $651.60). The tenant’s appeal was accepted and remanded only on his claim of financial hardship. In the Decision on Remand, the hearing officer found sufficient evidence of financial hardship to waive the retroactive amount owed from the tenant to the landlord ($7,189.80), but ordered that the tenant commence payment of the approved rent increase as of July 1, 1997. Both the landlord and the tenant appeal the remand decision. The tenant maintains that factual and legal errors in the original Decision of Hearing Officer regarding the comparables rent increase should be reexamined; and asserts that the hearing officer erred in finding insufficient hardship to disallow all or part of the noticed increase. The landlord appeals the waiver of the retroactive amount owed in its entirety, maintaining that the tenant has the ability to repay the sum in installments.

      Because of the absence of a voting neutral Commissioner at the August 19, 1997 meeting, consideration of this matter was continued.

      MSC: To recuse Commissioner Becker from consideration of this appeal. (Marshall/Gruber: 5-0)

      MSC: To deny both the landlord’s and tenant’s appeals. (Wasserman/Gruber: 3-2; Marshall, Moore dissenting)

    2. 1406 Pacific Ave. #4 S001-03A
      (cont. from 8/19/97)

      The landlord’s petition for a rent increase based on comparable rents was denied. The hearing officer found that the landlord had established the requisite extraordinary circumstances to justify a rent increase based on comparables, and that the rent for the subject unit was set low and kept low due to a special relationship and fraud. However, the landlord failed to meet his burden of proving what a comparable rent for the unit should be, instead providing somewhat unreliable evidence as to "market" rent for the unit. On appeal, the landlord claimed that the decision is unsupported by the evidence. Because of the Board’s failure to pass a final motion at the meeting on August 19th, this case was continued. After further discussion at the September 2nd meeting, it was the consensus of the Board to again continue this matter in order to obtain clarification from the hearing officer as to exactly what instructions the landlord received pertaining to the inadequacy of his comparables evidence.

    3. 634 - 18th Ave. S001-04A
      (cont. from 8/19/97)

      The tenant’s petition alleging unlawful increases in rent was granted, and the landlord was found liable to the tenant in the amount of $18,311.46. On appeal, the landlord asserts that the tenant is barred from recovery of the rent overpayments due to the equitable doctrines of laches, waiver and estoppel. She asserts, specifically, that: there is no evidence of retaliation against the tenant for her filing of the petition but, rather, a good faith owner-occupancy of the subject premises pursuant to the provisions of Ordinance Section 37.9(a)(8); the hearing officer’s conclusion that the landlord’s deceased husband had "unclean hands" is based upon hearsay and is unreliable; the death of the owner who managed the property constitutes real prejudice to the landlord; the tenant’s conduct over the years would lead any reasonable landlord to believe that the rent charges were proper and permissible; and fairness dictates that the amount of overpayment be reduced by one-half, on the theory that both parties are equally at fault, conditioned on the landlord’s prompt payment to the tenant. Due to the absence of a voting neutral Commissioner at the meeting on August 19th, consideration of this appeal was continued.

      MSC: To deny the appeal. (Wasserman/Becker: 3-2; Gruber, Lightner dissenting)

    4. 3239 - 17th St. #3 S001-07A
      (cont. from 8/19/97)

      The tenants’ petition alleging substantial decreases in housing services was granted, and the landlord was found liable to the tenants in the amount of $14,950.00 due to egregious conditions on the premises. No appearance was made by the landlord at the hearing. The property had been sold prior to the date of the hearing, and Notice of Hearing was sent to the prior owner and the mortgage company (California Mortgage and Realty Company) that had collected rent subsequent to the sale. On appeal, California Mortgage and Realty claims that the company is not an owner but, rather, a second lender that does not hold title to the property.

      After discussion, this matter was continued from the meeting on August 19th in order for the Deputy Director to investigate ownership of the property and confer with the Senior Hearing Officer on policy in the event of an ownership change after a hearing has been held. After receiving a report from Deputy Director Wolf, and further discussion, the Board voted as follows:

      MSC: To deny the appeal. (Marshall/Wasserman: 5-0)

    5. 170 Highland Ave. S001-08A

      The tenants’ petition alleging substantial decreases in housing services was granted and the landlord was found liable to the tenants in the amount of $4,080.00 due to serious habitability defects on the premises. The landlord failed to appear at the original hearing and appealed the decision on the grounds of non-receipt of notice of hearing. The appeal was accepted and the case was remanded for a new hearing. On remand, the hearing officer granted rent reductions in the amount of $3,567.00. The landlord appeals the Decision on Remand, providing copies of receipts and proposals that he claims prove that many of the conditions cited in the decision have been remedied.

      MSC: To deny the appeal. (Becker/Wasserman: 5-0)

    6. 86 & 88 Frederick St. S001-12A; S001-11R & -12R

      The landlord’s petition for certification of capital improvement costs was granted, in part, and the landlord was found liable to two tenants for slight overcharges in rent. The landlord appeals the decision on the grounds that the move-in date used by the hearing officer for one of the tenancies was incorrect, in that the tenancy consisted of revolving roommates. Therefore, the landlord asserts that he was entitled to several years of banked increases prior to the instant tenant’s having resided on the premises. Two tenants appeal the decision on the grounds that certain items constituted repairs rather than capital improvements; were the result of deferred maintenance; and/or were unfairly allocated. One tenant also contends that the rent history in the decision is incorrect as to her unit.

      MSC: To recuse Commissioner Moore from consideration of this appeal. (Becker/Marshall: 5-0)

      MSC: To accept the landlord’s and tenant’s appeals and remand the case for a hearing only on the issue of the rent history for the tenant in unit #88, and to correct the allocation of the costs of the new front window. (Becker/Wasserman: 5-0)

    7. 1950 Gough St. #502

      The landlord’s petition for a rent increase based on increased operating expenses was granted. The tenant appeals the decision on the grounds that the landlord’s debt service costs should be disallowed, because the landlord’s loan had an initial, low "teaser" rate, which the landlord knew would go up; that the hearing officer should have looked only at the costs associated with her unit, as opposed to the operating expenses for the entire 35-unit condominium complex; and, since the landlord’s homeowners’ association fees did not go up, the actual costs to the landlord did not increase.

      MSC: To deny the appeal. (Lightner/Gruber: 5-0)

    8. 1353 Filbert St. S001-09R

      This case concerns a Newly Covered Unit under Proposition I. The landlord’s petition for certification of capital improvement costs was granted, in part. On appeal from the landlord and two tenants, the case was remanded by the Commissioners with instructions to determine whether the landlord had previously been compensated for costs of capital improvement work, among other issues. The hearing officer found that this was not the case. One tenant appeals the Decision on Remand, asserting that, since there were regular, sizable rent increases every year of the tenancy, the landlord has clearly been adequately compensated; and that by the use of the word "repair" on at least one notice of rent increase, the landlord also meant to include what would more properly be called "capital improvement" work.

      MSC: To recuse Commissioner Lightner from consideration of this appeal. (Becker/Gruber: 5-0)

      MSC: To deny the appeal. (Gruber/Murphy: 5-0)

    9. 4110 Anza St. S001-10R

      The landlords’ petition for certification of capital improvement costs to the tenants in one unit was granted, in part. The tenants appeal on the grounds that: they should not be liable for work done in the back yard area, as they are denied access to the back yard by the landlord; and that an outdoor light fixture did not need replacement and the cost of the replacement fixture was excessive.

      MSC: To deny the appeal. (Lightner/Gruber: 3-2; Becker, Bierly dissenting)

    10. 100 Broderick St. #104 & 306 R001-09A

      The landlord’s appeal was filed five days late because the landlord claimed that he was unable to check his mailbox due to having had knee surgery.

      MSC: To find good cause for the late filing of the appeal. (Gruber/Lightner: 4-1; Bierly dissenting)

      The landlord’s petition for certification of capital improvement costs was granted, in part. In addition, the hearing officer determined rent overcharges due to annual increases having been calculated on base rent amounts that included parking charges that were not yet in effect. On appeal, the landlord submits estoppel certificates obtained at the time of purchase that indicate that the tenants were already paying extra for garage space. He therefore asks that the otherwise allowable banked increases be recalculated on the proper base rent amounts, exclusive of parking charges.

      MSC: To accept the appeal and remand the case for a new hearing to determine when parking was obtained by the tenants. (Wasserman/Gruber: 5-0)

    11. 1246 Sacramento St. #2 S001-10A

      The landlord’s petition for a rent increase based on increased operating expenses but granted, in part. The categories of debt service and property taxes were disallowed, however, because the landlord had obtained an increase on those grounds subsequent to his purchase of the property. On appeal, the landlord asserts that Section 6.10(e) of the Rules and Regulations should not apply in the instant case because there was no change in ownership or refinancing, just an increase in an adjustable rate mortgage. Additionally, the increase in property taxes was a normal, annual adjustment, and was not due to reassessment upon transfer of the property.

      MSC: To accept the appeal and remand the case to the hearing officer on the record to grant the landlord’s increase in property taxes and make any necessary corrections to the decision. (Becker/Bierly: 5-0)

    12. 4027 - 27-1/2 Folsom St. S001-11A

      The landlords’ petition for rent increases based on increased operating expenses was denied. The hearing officer found that the majority of the increased costs were in the category of repairs, and that most of these items constituted capital improvements. On appeal, the landlords claim that the hearing officer completely disregarded documented repairs in the amount of $2,670.35.

      MSC: To deny the appeal. The landlord is, however, encouraged to file a petition for capital improvement certification. (Lightner/Gruber: 5-0)

  6. Communications

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

    1. The monthly office workload statistics for July, 1997.

    2. The recent California Supreme Court Decision in the case of Kavanau v. Santa Monica Rent Control Board, 97 Daily Journal D.A.R. 11069.

  7. Calendar Items

    September 9, 1997 - NO MEETING

    September 16, 1997

    9 appeal considerations (1 post. & 1 cont. from 8/19/97)

    September 23, 1997

    Discussion of "Remarks from the Public" portion of the Agenda with the City Attorney

    Discussion of Proposed Amendments and Additions to the Rules and Regulations Pertaining to Material Changes in the Terms of a Tenancy; Rent Paid by "Master Tenants"; and Changes in Roommates

  8. Adjournment

    President Lightner adjourned the meeting at 9:00 p.m.

Last updated: 10/9/2009 11:26:14 AM