I. Call to Order
President Wasserman called the meeting to order at 6:10 p.m.
II. Roll Call
Commissioners Present: Aung; Becker; Gruber; Justman; Mosser; Murphy; Wasserman.
Commissioners not Present: Lightner; Marshall.
Staff Present: Grubb; Wolf.
III. Approval of the Minutes
MSC: To approve the Minutes of November 19th and December 3rd, 2002. (Gruber/Becker: 5-0)
IV. Remarks from the Public
A. Commissioner Frederick Hobson informed the Board and the public that he has resigned after having served on the Board for three years because his health is compromised. Mr. Hobson said that it had been "bittersweet," and a "learning experience." He expressed his thanks to the Executive and Deputy Directors, and told the Commissioners that they are a "great" Board, and not to let anyone tell them otherwise.
B. Robert Pender of the Parkmerced Residents" Organization (PRO) said that he would miss Commissioner Hobson personally. He told the Commissioners that he had his hardship appeal hearing that morning regarding the operating expense increase recently approved for Parkmerced, and that he felt "optimistic." He also said that PRO is in touch with the Office of the District Attorney and Board of Supervisors, and that they will "keep up the fight."
C. Ada Cook, the landlord at 1402 Ortega St. (AL020519), told the Commissioners that she is not appealing the amount of the overcharges. Rather, she believes that amounts paid by prior subtenants should go to them, rather than the entire amount going to the Master Tenant. Ms. Cook is afraid she will be liable in the event of a future action by the subtenants.
V. Consideration of Appeals
A. The Villas Parkmerced AT020508 thru -12
The tenant at 750 Gonzalez Dr. #11D filed his appeal one day late because he experienced difficulty in retrieving photos from a remote computer file.
MSC: To find good cause for the late filing of the appeal. (Becker/Gruber: 5-0)
The tenant at 750 Gonzalez #9C filed her appeal 23 days late because she could not understand the papers that she received from the Rent Board.
MSC: To find good cause for the late filing of the appeal. (Becker/Gruber: 5-0)
The landlord"s petition for certification of the costs of painting six high-rise buildings to the tenants in 646 units was granted. Five tenants appeal the decision. The tenants at 350 Arballo #5L, 750 Gonzalez #9C and 750 Gonzalez #3G appeal the decision on the grounds of financial hardship. The tenant at 405 Serrano #11D claims that the landlord provided false information, that no primer coat was applied, and that the tenants are being charged for two coats of paint when only one was applied. The tenant at unit 750 Gonzalez #11D maintains that exterior painting and caulking cannot be considered a capital improvement since it did not solve waterproofing problems in his unit.
MSC: To accept the appeal of the tenant at 350 Arballo #5L and remand the case for a hearing on the tenant"s claim of financial hardship. (Becker/Aung: 3-2; Gruber, Murphy dissenting)
MSC: To accept the appeal of the tenant at 750 Gonzalez #9C and remand the case for a hearing on the tenant"s claim of financial hardship. (Becker/Aung: 3-2; Gruber, Murphy dissenting)
MSC: To accept the appeal of the tenant at 750 Gonzalez #3G and remand the case for a hearing on the tenant"s claim of financial hardship. (Becker/Aung: 5-0)
MSC: To deny the appeal of the tenant at 405 Serrano #11D. (Murphy/Gruber: 3-2; Aung, Becker dissenting)
MSC: To deny the appeal of the tenant at 750 Gonzalez #11D without prejudice to the tenant"s filing a petition alleging decreased housing services, if warranted. (Gruber/Murphy: 5-0)
The tenant"s petition alleging decreased housing services was dismissed due to her failure to appear at the properly noticed hearing. On appeal, the tenant alleged that she failed to receive the notice of hearing, but failed to provide the requested Declaration of Non-Receipt of Notice of Hearing. Since the tenant is not a native English speaker, it was the consensus of the Commissioners to continue this appeal in order for staff to attempt to contact the tenant again.
C. 427 Stockton St., Apt. 709 AT020506
The tenant"s petition alleging that a PG&E passthrough had been improperly calculated was denied. On appeal, the tenant argues that he should not have to pay the PG&E passthrough because his lease provides that the landlord shall pay for all utilities.
MSC: To deny the appeal. (Gruber/Murphy: 3-2; Aung, Becker dissenting)
D. 1402 Ortega St. AL020519
The tenant"s petition alleging an unlawful rent increase was granted and the landlord was found liable to the tenant in the amount of $23,461.85. On appeal, the landlord maintains that: the Master Tenant was familiar with the provisions of the Rent Ordinance, contrary to his assertions, because a prior subtenant had filed a claim against him for rent overpayments; the new lease was executed at the request of the tenant for consideration and constituted a novation of the prior oral tenancy; and, if the decision is upheld, a constructive trust should be established in order that sums overpaid by prior subtenants be distributed to them, and not constitute a windfall to the Master Tenant.
MSC: To accept the appeal and remand the case to the Administrative Law Judge for a hearing to determine the portion of the overpayments that were paid by the Master Tenant and which amounts were paid by subtenants, and for how long, and order refunds accordingly; the landlord and Master Tenant shall provide the names and current addresses of any known subtenants prior to the hearing. (Murphy/Gruber: 5-0)
E. 1935 Franklin St. AL020495
The landlord"s petition for certification of capital improvement costs to 35 of 42 units was granted, in part. On appeal, the landlord asserts that: the base rent and move-in date for unit #503 is contingent on the outcome of a pending comparables petition, which could make the tenants in that unit liable for certain of the capital improvement costs certified in the instant case; and a calculation error in the original decision led to the unfair disallowance of a large portion of the costs of plumbing improvements performed in 1998.
MSC: To recuse Commissioner Becker from consideration of this appeal. (Aung/Gruber: 5-0)
MSC: To accept the appeal and remand the case in order to allow the landlord to amend the petition. A hearing will be held, and the tenants will be given the right to raise objections, if any. No documentary evidence relating to additional costs since those brought forward in the Second Amended Petition will be allowed. The case is also remanded to make any necessary corrections to the rent of unit #503, dependent on the outcome of the pending comparables case. (Murphy/Gruber: 4-0)
F. 1770 Broadway #605 AT020516
The tenant"s petition alleging decreased housing services was granted, in part, and the landlord was found liable to the tenant in the amount of $371.00 due to water-damaged floorboards around the radiator. The tenant appeals the decision, claiming that: the amount of the rent reduction is woefully inadequate; the word "purported" should be stricken from the decision; and the Administrative Law Judge erred in finding that he failed to meet his burden of proving that a support beam was damaged by radiator leaks.
MSC: To deny the appeal except to remand the case to the Administrative Law Judge to change the word "purported" on page 8, paragraph 33 of the Decision to "proffered." (Gruber/Murphy: 5-0)
G. 1308 Larkin St. AL020517 & AT020518
The landlords" petition for certification of capital improvement costs to one of three units was granted, in part, resulting in a $270.66 monthly passthrough. The notice of rent increase issued to the tenant was found to be null and void, because it stated that the increase was effective as of January 1, 2001, instead of 2002. On appeal, the landlord claims that the mistake on the notice was a typographical error; it is not required that the effective date be on the notice; and everyone makes mistakes. The tenants also appeal the passthrough of the new heating system, on the grounds that: heat is a basic right; the work was necessitated by the former owner"s and current management company"s deferred maintenance; and the claimed work was not performed.
MSC: To recuse Commissioner Gruber from consideration of this appeal. (Murphy/Justman: 5-0)
MSC: To accept the appeal and remand the case to the Administrative Law Judge to find that the notice of rent increase is not null and void, but is effective 30 days from the date of service on the tenants; if the tenants can show that payment of the retroactive amount owing would constitute a financial hardship, an installment plan shall be implemented. (Mosser/Murphy: 3-2; Aung, Becker dissenting)
MSC: To deny the tenants" appeal. (Murphy/Mosser: 4-1; Becker dissenting)
H. 1935 Franklin St. AL020489
(rescheduled from 12/3/02)
The landlord"s petition for rent increases based on increased operating expenses was granted, resulting in 7% base rent increases to the tenants in 33 units. The landlord appeals the decision, arguing that: the operating expense increase should be calculated on the base rent in effect at the time the rent increase is imposed, and not the base rent in effect at the time the petition was filed; annual increases should be included in the base rent when the allowable operating expense increase is calculated, or there is a disparate result between tenants who have already received their annual increase and those who have not; and the rent increase to the tenants in unit #503 should be based on the adjusted base rent that will be authorized in a pending comparables case that is on remand.
Because the Administrative Law Judge"s Memorandum in response to this appeal did not get mailed to the parties with sufficient time for them to respond, it was the consensus of the Board to continue consideration of this appeal to the meeting on February 4th.
I. 328 Garces Dr. AT020253
The landlord"s petition for certification of the costs of a new roof over two units was granted, resulting in a monthly passthrough in the amount of $21.85. The tenant in one unit argues that the work does not meet the definition of "capital improvement." The tenant additionally points out that the Administrative Law Judge inadvertently omitted the paragraph certifying the cost of the new roof from the decision. This case was continued from the meeting on November 19th in order for staff to find out whether the tenant wished to augment her substantive appeal with a hardship claim.
MSC: To deny the appeal on substantive grounds; however, to remand the case to the Administrative Law Judge on the record for a Technical Correction. (Gruber/Murphy: 3-2; Aung, Becker dissenting)
MSC: To accept the appeal and remand the case for a hearing on the tenant"s claim of financial hardship. (Becker/Aung: 5-0)
J. 3649 Market St. #201 AL020246
The tenant"s petition alleging decreased housing services due to the landlord"s failure to allow two replacement roommates was granted and the landlord was found liable to the tenant in the amount of $3,038.03. On appeal, the landlord asserts that: the tenant has not suffered a reduction in housing services because he has always been entitled to replace one roommate, and the open behavior of the parties has not established that the tenancy includes more than two people; the tenant failed to prove that the prior property manager approved any occupant other than the two signatories on the lease agreement; and certain findings in the decision are based on hearsay evidence.
MSF: To deny the appeal. (Becker/Aung: 3-2; Gruber, Murphy, Justman dissenting)
MSC: To accept the appeal and remand the case to the Administrative Law Judge to set aside the rent reduction granted for the period of time when the tenant believed he had been denied permission to obtain one replacement roommate; however, to allow the rent reduction granted for the tenant only being allowed to have two occupants in the unit, rather than three. (Murphy/Gruber: 3-2; Aung, Becker dissenting)
VI. Communications
The Commissioners received the monthly workload statistics for August, September and October, 2002.
VII. Director"s Report
Executive Director Grubb informed the Board that the increase in the CPI was 1.4%; therefore, the annual allowable rent increase from March 1, 2003 through February 28, 2004 will be .8%. He told them that legislation sponsored by Supervisor Ammiano changing the way that capital improvement passthroughs are assessed would settle the Proposition H lawsuit when finally approved. The legislation will affect any petitions for capital improvement certification filed on or after November 14, 2002. The provisions of the legislation allow for tenants in buildings of six units or more to elect between paying 50% of the total passthrough, or 100% of the costs with a cap of 15%, phased in over three years. In buildings of five units or less, tenants would pay for 100% of the costs, but at a rate of no more than 5% per year and with longer amortization periods for the work.