January 22, 2002p>
MINUTES OF THE REGULAR MEETING
OF
THE SAN FRANCISCO RESIDENTIAL
RENT
STABILIZATION & ARBITRATION
BOARD,
Tuesday, January 22, 2002 at 6:00 p.m.
at
25 Van Ness Avenue, Suite 70, Lower Level
I. Call to Order
President Wasserman called the meeting to order at
6:14 p.m.
II. Roll Call
Commissioners Present: Becker; Lightner;
Marshall; Wasserman.
Commissioners not Present: Aung; Gruber;
Hobson; Justman; Mosser.
Staff Present: Grubb; Wolf.
Commissioner Murphy appeared on the
record at 6:16 p.m.
III. Approval of the Minutes
IV. Remarks from the Public
A. Tenant Jacquelyn Loia of 4042 California St.
(AT010199) told the Board that the work wasn’t done until it constituted
an emergency, so the costs were greater. Ms. Loia believes that necessary
work should not be considered a capital improvement.
B. Tenant Christian Lackner of 2526 Van Ness Ave.
#11 (AT010198) expressed his belief that the process by which the landlord’s
operating and maintenance expense petition was approved was "fraudulent."
Mr. Lackner said that the landlord failed to meet his burden of proof, and
that higher expenses for repairs incurred by the previous owner were wiped
out.
C. Tenant Jeffrey Chase of 4042 California said
that the work that was passed through was the result of deferred maintenance,
and was less than adequate.
D. Kathleen Loia, a tenant at 4042 California from
1992 - 1997, said that she spoke to the landlord several times about the
need for a paint job, but only a partial paint job was done 2-3 years later.
E. Mike Roper, who used to live at 4042 California,
said that only the façade of the building was painted; the windows
don’t open and close; and the back stairs had to be replaced due to dry
rot.
F. Dennis Fry, attorney for the landlord at 4042
California, said that several of the speakers were not tenants at the time
the work was done, and that there was no evidence that costs increased due
to deferred maintenance.
V. Consideration of Appeals
A. 2195 Sacramento St. AL010196
The landlords’ petition for rent increases to 11 of
16 units based on increased operating expenses was granted. However, it was
determined that notices of rent increase were null and void due to having
been issued one month after a prior operating and maintenance expense increase
had taken effect. On appeal, the landlords maintain that the effective date
of the rent increases is mistakenly stated in the prior decision, and the
notices of rent increase were not given prior to one year having elapsed;
and that the base rent for unit #102 did not include additional amounts for
storage and parking spaces. The landlords request that the case be remanded
for technical corrections.
MSC: To recuse Commissioner Becker from consideration
of this appeal. (Marshall/Lightner: 4-0)
MSC: To accept the appeal and remand the case
to the Administrative Law Judge to allow the landlord to amend the petition
in order to reflect the proper base rent for unit #102 and to determine
the validity of the notices of rent increase; a hearing will be held
only if necessary. (Lightner/Wasserman: 3-0)
B. 1950 Clay St., Apt. 102 AL010197
The landlord filed a petition requesting a determination
as to whether the unit constituted the tenant’s principal place of residence
pursuant to Rules Section 1.21. The Administrative Law Judge found that the
tenant was not a "tenant in occupancy" as defined in that Section,
but that subtenants resided on the premises whose principal place of residence
is the subject unit. Since the original tenant no longer permanently resides
on the premises, the subtenants took up occupancy after January 1, 1996 and
the subtenants are not there pursuant to an agreement with the landlord, a
rent increase was found to be warranted pursuant to Costa-Hawkins. However,
two notices of rent increase were determined to be defective because one was
predicated on Section 1.21 although there are "tenants in occupancy"
residing on the premises; and the Costa-Hawkins increase was served only on
the subtenants, and not the original tenant. The landlord appeals the determination
that the rent increase notices are defective, claiming that: the decision
elevates form over substance, cites no legal authority; and is in disregard
of State and local law, which does not require that there be a stated reason
for a rent increase. The landlord also maintains that the landlord relied
on defective information intentionally provided by the tenant and subtenants.
MSC: To accept the appeal and, based on the
facts of this case, to remand to the Administrative Law Judge to find
the rent increase valid as of the effective date of the second notice
of rent increase, which was issued pursuant to Costa-Hawkins. (Marshall/Wasserman:
3-1; Becker dissenting)
C. 2526 Van Ness Ave. #11 AT010198
The landlord’s petition for rent increases based on
increased operating expenses to 8 of 12 units was granted. One tenant appeals
the decision, claiming that: the landlord failed to meet the burden of proof
regarding operating expenses in the base year; substantial repair costs incurred
by the prior owner would serve to reduce or nullify the rent increases; and
the Administrative Law Judge exhibited bias in favor of the landlord by deciding
that repair costs were not established, which worked in favor of the landlord.
D. 4042 California St. AT010199
The landlords’ petition for certification of capital
improvement costs to the three units in the building was granted. On appeal,
one tenant asserts that: the deteriorated condition of the building should
have been taken into account in that the capital improvements actually constituted
necessary repair; the partial patching of the roof was not a capital improvement;
the exterior painting was done to prevent further damage to the building,
and did not improve it; and the landlord was required to replace the rear
stairs and windows, which had worsened due to deferred maintenance.
E. 1958 Golden Gate Ave. #3 AT010200
The landlord filed a petition seeking a determination
of the proper base rent for the subject unit. The landlord had issued a notice
of banked and annual rent increase, which the tenant argued was invalid due
to a clause in the purchase agreement for the property which precludes the
landlord from imposing any rent increases without a mutual agreement in writing
between the parties. The Administrative Law Judge found that the purchase
agreement established the initial base rent for the tenancy, but did not preclude
future allowable annual increases. On appeal, the tenant asserts that: the
decision violates a final judgment of the Superior Court; the contract makes
no distinction between changes that are consistent with the purchase agreement
and those that are inconsistent; the decision takes away part of the consideration
he received for the sale of the building without compensation; the landlord
waived the rent increase by continuing to accept the prior rent amount for
3 months prior to filing the petition; the hearing was unfair and violated
due process; and the Rent Board does not have jurisdiction to decide whether
the contract prohibited the landlord from raising the rent, which is a matter
of State contract law.
F. 444 - 12th Ave. AL010202
The tenant’s petition alleging unlawful rent increases,
decreased housing services and the landlord’s failure to repair was granted
as to the rent increase and several decreased housing services claims. The
landlord was found liable to the tenant in the amount of $6,682.23 due to
unlawful rent increases and $2,301.25 due to habitability defects on the premises.
On appeal, the landlord asserts that: the entire amount of the rent increases
should not be null and void but, rather, he should be credited for the lawful
amount in effect at the time; the amount requested by the tenant was unfair;
the cracked exterior front step was minor; he never received notice as to
several of the conditions; there are factual errors in the decision; and he
effectuated repairs when he was informed of the problems by having received
the tenant’s petition.
VI. Communications
In addition to correspondence concerning cases on
the calendar, the Board received the following communications:
A. The office workload statistics for the month
of December, 2001.
B. The Board Appeal Decision in the case concerning
1320, 1340 & 1360 Lombard St. (AT010052 et seq.), which was approved
by the Board and signed by President Wasserman.
C. A copy of the Order Denying Plaintiffs’ and Petitioners’
Motion for Peremptory Writ of Mandamus in the case of Bullard v. Rent
Board (Superior Court Case No. 319025), in which the Judge found that
Costa-Hawkins does not preempt the Rent Board’s ability to determine the
initial rent for non-comparable replacement units offered to tenants displaced
by owner move-in evictions pursuant to Ordinance Section 37.9(a)(8)(iv).
VII. Director’s Report
Executive Director Grubb informed the Board that he
will be seeking an increase in the rental unit fee in order to fund the Department’s
proposed budget for next year. The proposed $6.50 increase will bring the
fee to $22.50 for apartments and $11.25 for residential hotel rooms. The factors
necessitating the increase include: the need to fill two positions kept vacant
last year because of workload demands; litigation costs; language access mandates
requiring that the Department translate its forms and brochures into at least
two additional languages; wage increases; a backlog of petitions due to the
Temporary Moratorium on processing of capital improvement petitions having
been lifted; and the Department’s taking on resolution of residential hotel
visitor fee disputes. Should the increase be approved, the Department will
fill the vacant counselor position; hire one additional permanent Administrative
Law Judge; and hire one temporary Administrative Law Judge to eliminate the
backlog of capital improvement petitions in one year. To mitigate the budgetary
impacts, the Department will give up its Information Tech position and contract
out those services.
VIII. Old Business
A. Proposed Amendment to Rules and Regulations Section
6.10(e)
The Board continued their discussion of a proposed
amendment to Rules Section 6.10(e), pursuant to the Public Hearing held on
October 16th. The proposed language would make it clear that only
an owner who incurred an increase in expenses can file a petition for rent
increase based on those expenses. Commissioner Lightner had previously voiced
her concern that estates can’t petition for increases based on the property
tax reassessment triggered by the death of the owner because it takes so long
for the supplemental tax bill to be issued by the City. If the estate does
not own the property long enough to qualify for the operating and maintenance
expense increase, an alternative would be for the estate to file the petition,
obtain the increased sales price and assign the petition to the new owner.
Commissioner Lightner proposed language to accomplish this purpose, which
will be discussed further at the next meeting.
B. Petition for Rules and Regulations Section 1.21
Determinations
The Board continued their discussion of certain desirable
changes to the form developed by staff for landlords’ use in requesting determinations
pursuant to Rules Sections 1.21 and/or 6.14 and Costa-Hawkins. The Board agreed
that it should be clear on the petition form itself, as it is on the instruction
sheet, that landlords do not have to file for 6.14 and/or Costa-Hawkins rent
increases. There should also be a space for the listing of any persons who
may claim a right to possession of the premises, including subtenants. Staff
will incorporate these and certain other changes suggested by Commissioner
Lightner.
IX. New Business
Deputy Director Wolf informed the Commissioners that
there had been an inquiry from a landlord attorney as to the Board’s position
on whether a Master Tenant who was paying less than their proportional share
of the rent could be evicted for illegal use of the unit pursuant to Rules
Section 6.15C(3). The Board asked that staff draft some proposed language
to make clear that a tenant’s failure to comply with the requirements of that
section would not be a basis for eviction from the premises, for discussion
at the next meeting.
X. Calendar Items
January 29, 2002 - NO MEETING
February 5, 2002
10 appeal considerations
Old Business:
A. Proposed Amendment to Rules and Regulations Section
6.10(e)
B. Rules and Regulations Section 6.15C(3)
XI. Adjournment
President Wasserman adjourned the meeting at 8:09
p.m.