San Francisco Rent Board : February 10, 2003 (Public Hearing)

February 10, 2003 (Public Hearing)

February 10, 2003

NOTICE OF PUBLIC HEARING

DATE: March 4, 2003

TIME: 6:30 P.M.

PLACE: 25 VAN NESS AVENUE (AT MARKET ST.)
SUITE 70, LOWER LEVEL
SAN FRANCISCO, CALIFORNIA

THE RENT BOARD COMMISSIONERS INVITE THE PUBLIC TO COMMENT ON PROPOSED CHANGES TO THE RULES AND REGULATIONS GOVERNING THE RESIDENTIAL RENT STABILIZATION AND ARBITRATION ORDINANCE, CHAPTER 37 OF THE SAN FRANCISCO ADMINISTRATIVE CODE.

THE COMMISSION IS TAKING PUBLIC COMMENT ON THE LANGUAGE BELOW AMENDING SECTIONS 7.10, 7.11, 7.12, AND 7.14. The proposed amendments are intended to conform the Rules and Regulations with Ordinance 02-03, effective February 21, 2003, which made changes to the Rent Ordinance concerning the passthrough of capital improvement costs. The changes to the amortization periods and the amount of allowable passthroughs apply to petitions filed on or after November 14, 2002, while the remaining changes apply to petitions filed after February 21, 2003. The following is a summary of the major changes:

NEW RULES APPLICABLE TO PROPERTIES WITH 1 TO 5 RESIDENTIAL UNITS:

1. Like now, one hundred percent (100%) of the certified costs of capital improvements may be passed through to the tenants.

2. The amortization schedules are changed from the current 7 and 10 years to 10, 15 and 20 years for specified capital improvements.

3. Capital improvement rent increases are limited to 5% of the tenant's base rent at the time the petition was filed or $30.00, whichever is greater, in any 12 month period.

NEW RULES APPLICABLE TO PROPERTIES WITH 6 OR MORE RESIDENTIAL UNITS:

1. Only fifty percent (50%) of the certified costs of capital improvements may be passed through to the tenants.

2. Like now, the amortization schedules remain 7 and 10 years for specified capital improvements, and capital improvement rent increases are limited to 10% of the tenant's base rent at the time the petition was filed or $30.00, whichever is greater, in any 12 month period.

3. In the alternative, a tenant may elect to have one hundred percent (100%) of the certified costs passed through to the tenant, with an annual limitation of 5% and a total limitation of 15% of the tenant's base rent applicable to the capital improvement rent increases. (Note: The tenant may elect this alternative within 15 days after a decision based on a 50% passthrough is mailed to the tenant.)

NEW RULES APPLICABLE TO ALL PROPERTIES REGARDLESS OF SIZE:

1. Like now, one hundred percent (100%) of the certified costs of seismic work required by law (and other work required by new laws enacted after November 14, 2002) may be passed through to the tenants subject to the 10%/$30.00 annual limitation. However, the amortization schedule is changed from the current 10 years to 20 years. (Note: Seismic work not required by law is subject to the new rules for properties with 1-5 residential units and properties with 6 or more residential units set forth above.)

2. One hundred percent (100%) of the certified costs of energy conservation work approved by the Commission on the Environment may be passed through to the tenants and there is no annual limitation on the amount of the passthrough. (At present, a new EPA Energy-Star-compliant refrigerator is the only item approved for certification under this section.)

3. Beginning with petitions filed on or after February 21, 2003, all capital improvement petitions which request certification of more than $25,000.00 in costs must include copies of either competitive bids for the work or copies of time and materials billing for work performed by all contractors and subcontractors. Otherwise, the landlord must pay for an estimator hired by the Rent Board.

4. For petitions filed on or after February 21, 2003, the Board may not certify costs of work required to correct code violations for which a notice of violation remained unabated for 90 days, unless the landlord made timely good faith efforts to complete the work within the 90-day period.

The complete proposed amendments read as follows on the next page (deletions indicated with strikeouts; new language underlined):

PROPOSED AMENDMENTS TO PART VII OF THE RULES AND REGULATIONS
TO CONFORM TO RECENT ORDINANCE AMENDMENTS PERTAINING TO THE
PASSTHROUGH OF CAPITAL IMPROVEMENTS

PART VII LANDLORD APPLICATIONS FOR CERTIFICATION OF CAPITAL IMPROVEMENTS, REHABILITATION, AND/OR ENERGY CONSERVATION WORK.

Section 7.10 Filing

(Amended August 29, 1989 by correction May 1, 1990; June 18, 1991; subsection (d) added on January 31, 1995; amended March 7, 1995; repealed and adopted April 25, 1995; effective February 1, 1995)

(a) Those landlords who seek to pass through the cost of capital improvements, rehabilitation and/or energy conservation work must file an application for certification on a form prescribed by the Board ~~and accompanied by the appropriate filing fee as set forth in Section 3.10(b) above~~. If at any time prior to filing an application the landlord determines that the total cost of a project for a parcel or a building containing six or more residential units is reasonably expected to exceed $25,000 multiplied by the number of units on the parcel or in the building, the landlord shall immediately inform each tenant and the Rent Board in writing of the anticipated costs of the work. The landlord's notice must occur within 30 days after such determination by the landlord.

(b) Information to Accompany Landlord's Application

The application shall be accompanied by: (1) copies of the application in sufficient number to distribute to each of the tenants named in the application, plus one additional copy for the estimator; (2) two copies of all claimed invoices, signed contracts, and cancelled checks substantiating the costs for which the landlord has not been compensated by insurance proceeds; (3) if claim is made for uncompensated labor, the application shall include a copy of a log of dates on which the work was performed; and (4) copies of proof of compliance with the Bureau of Building Inspection for any work claimed for energy conservation measures or other work for which proof of compliance is required by State or local law. For each petition totaling more than $25,000, in addition to the supporting material prescribed by the Board for all petitions, the applicant must either: (1) Provide copies of competitive bids received for work and materials; or, (2) Provide copies of time and materials billing for work performed by all contractors and subcontractors; or (3) The applicant must pay the cost of an estimator hired by the Board.

The landlord must file an application before giving legal notice of a rent increase. The notice shall be in conformance with the requirements set forth in Section 4.10 above and shall further include the dollar amount requested based on the amortization of the work performed. This increase shall be inoperative unless and until the application is approved by the Administrative Law Judge. Any amounts approved by the Administrative Law Judge shall relate back to the effective date of the legal notice, if given.

If the landlord sends a notice of rent increase based on capital improvements without first filing an application for certification, the increase shall be null and void. In order to be able to pass through these amounts, an application must first be filed and then a new notice sent.

(d) Special Provision for Owners of Proposition I Affected Units

Landlords of Proposition I Affected Units may petition the Board to certify the cost of capital improvements, rehabilitation and/or energy conservation work in accordance with, and subject to, the rules and procedures set forth in Part 7 of these Rules and Regulations and Section 37.7 of the Rent Ordinance. Events before the unit was subject to the Rent Ordinance may be considered. Petitions for Proposition I Affected Units based upon capital improvements that are pending as of, or filed within six months of, April 25, 1995 may, at the request of the landlord, be treated as if filed on May 1, 1994; provided, however, that the actual date of filing shall be used to determine the effective date of any rent increase pursuant to Section 7.10(c) above.

(e) Requirements for Certification

The Board and designated Administrative Law Judges may only certify the costs of capital improvements, rehabilitation, energy conservation improvements, and renewable energy improvements, where the following criteria are met:

(1) The landlord completed capital improvements or rehabilitation on or after April 15, 1979, or the landlord completed installation of energy conservation measures on or after July 24, 1982, and has filed a proof of compliance with the Bureau of Building Inspection in accordance with the requirements of Section 1207(d) of the Housing Code;

(2) The landlord has not yet increased the rent or rents to reflect the cost of said work;

(3) The landlord has not been compensated for the work by insurance proceeds;

(4) The building is not subject to a RAP loan in a RAP area designated prior to July 1, 1977;

(5) The landlord files the certification petition no later than five years after the work has been completed;

(6) The cost is not for work required to correct a code violation for which a notice of violation has been issued and remained unabated for 90 days unless the landlord made timely good faith efforts within that 90-day period to commence and complete the work but was not successful in doing so because of the nature of the work or circumstances beyond the control of the landlord. The landlord's failure to abate within the original 90-day period raises a rebuttable presumption that the landlord did not exercise timely good faith efforts.

Section 7.11 Inspection of the Building

If the Board or its Executive Director determines that inspection by a qualified estimator of the building is necessary to determine whether the application shall be approved, the landlord and tenants shall provide entry to the Rent Board's representative at a convenient time during normal business hours.

(a) The necessity for use of an estimator in a particular case may be determined after consideration of the following factors, among others:

(1) the cost of the work;

(2) the number of units;

(3) complexity of the work performed;

(4) objections made pursuant to Section 7.15 below;

(5) whether the landlord provided copies of competitive bids or time and materials billings for work performed by all contractors and subcontractors for a petition totaling more than $25,000.

(b) A qualified estimator is a person:

(1) who is not a San Francisco city employee; but

(2) who is selected by the Rent Board or the Executive Director because he or she is qualified and experienced in the area of residential rehabilitation, such as a member of the American Society of Estimators, subscribing to its Code of Professional Ethics and Standards of Professional Conduct. The estimator shall operate under the direction of the Board or its Executive Director.

Section 7.12 Allocation of Cost of Improvements or Work to Individual Units

(Amended March 14, 1989; August 29, 1989; June 18, 1991; Subsection (b) amended October 20, 1998)

(a) The cost of capital improvements, rehabilitation, and/or energy conservation work for which the landlord has not been compensated by insurance proceeds shall be allocated to each unit in the building. The method used for cost allocation shall be that which most reasonably takes into account the extent to which each unit benefits from the improvements or work. Methods which may be appropriate, depending on the circumstances, include allocation based on the square footage in each unit, allocation based on the rent paid for each unit, and equal division among all units. Where the improvements do not benefit all units, only those benefited may be charged the additional rent. For example, if a new roof were installed, the rents of all units in the building may be raised to cover the cost. But if, in addition, a new floor had been installed in one unit, that unit would be charged its proportionate share of the roof cost plus the cost of the new floor. Costs attributable to units where the rent cannot be raised (because of a lease restriction, owner occupancy, or other reason) may not be allocated to the other units. Costs attributable to routine repair and maintenance shall not be certified but shall be considered part of the costs of operating and maintenance.

(b) Effect of Vacancy on Rent Increases Requested for Capital Improvements

If a unit becomes vacant and is rerented after completion of capital improvements, rehabilitation, and/or energy conservation work listed in an application for certification, no additional rent will be allowed on the unit based on the improvements or work since the landlord has the opportunity to bring the unit up to market rent at the time the unit is rerented. This section also applies to those units rented during the construction period for the project of which the work is a part, as stated in the permit(s), contract document(s), and/or as shown by other relevant evidence, or rented within six months of the commencement of work for which an application for certification is filed, provided that ownership has not changed in that period.

~~Costs shall be amortized on a straight line basis~~ ~~over a seven or ten-year period depending upon which category described below most closely relates to type of improvement or work and its estimated useful life~~. The Board shall apply the amortization periods and cost allocation formulas as set forth below.

~~SCHEDULE I - SEVEN YEAR AMORTIZATION~~

The following shall be amortized over a 7 year period: Appliances, such as new stoves, disposals, refrigerators, washers, dryers and dishwashers; fixtures, such as garage door openers, locks, light fixtures, water heaters and blankets, shower heads, time clocks and hot water pumps; and other improvements, such as carpeting, linoleum, and exterior and interior painting of common areas. If the appliance is a replacement for which the tenant has already had the benefit, the cost will not be amortized as a capital improvement, but will be considered part of operating and maintenance expenses.

Appliances may be amortized as capital improvements when (1) part of a remodeled kitchen; (2) based upon an agreement between the tenant and landlord; and/or (3) it is a new service or appliance the tenant did not previously have.

~~SCHEDULE II - TEN YEAR AMORTIZATION~~

Major improvements to the structure of the building such as: new foundation, new floor structure, new ceiling or walls - new sheetrock, new plumbing (new fixtures, or piping,) weatherstripping, ceiling insulation, seals and caulking, new furnaces and heaters, new wiring, new stairs, new roof structure, new roof cover, new window, fire escapes, central smoke detection system, new wood or tile floor cover, new partitioning sprinkler, boiler replacement, air conditioning-central system, exterior siding or stucco, elevators, and/or additions such as patios or decks, central security system, new doors, new mail boxes, new kitchen cabinets, or sinks, shall be amortized over ten years.

(d) Except in extraordinary circumstances, to be determined by the Board on appeal, no increase under this subsection shall exceed, in a twelve-month period, ten (10%) of the tenant's base rent or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years subject to the limitation herein.

(1) Applications Filed Before November 14, 2002. The following provisions shall apply to all applications filed before November 14, 2002:

(A) Amortization Periods. Costs shall be amortized on a straight-line basis over a seven or ten-year period, depending upon which category described below most closely relates to the type of work or improvement and its estimated useful life.

(i) Schedule I - Seven-Year Amortization. The following shall be amortized over a seven-year period: Appliances, such as new stoves, disposals, washers, dryers and dishwashers; fixtures, such as garage door openers, locks, light fixtures, water heaters and blankets, shower heads, time clocks and hot water pumps; and other improvements, such as carpeting, linoleum, and exterior and interior painting of common areas. If the appliance is a replacement for which the tenant has already had the benefit, the cost will not be amortized as a capital improvement, but will be considered part of operating and maintenance expenses. Appliances may be amortized as capital improvements when: (1) part of a remodeled kitchen; (2) based upon an agreement between the tenant and landlord; and/or (3) it is a new service or appliance the tenant did not previously have.

(ii) Schedule II - Ten-Year Amortization. The following shall be amortized over a ten-year period: New foundation, new floor structure, new ceiling or walls - new sheetrock, new plumbing (new fixtures, or piping,) weather stripping, ceiling insulation, seals and caulking, new furnaces and heaters, refrigerators, new electrical wiring, new stairs, new roof structure, new roof cover, new window, fire escapes, central smoke detection system, new wood or tile floor cover, new sprinkler system, boiler replacement, air conditioning-central system, exterior siding or stucco, elevator rebuild, elevator cables, additions such as patios or decks, central security system, new doors, new mail boxes, new kitchen or bathroom cabinets, and sinks.

(B) Allowable Increase. One hundred percent (100%) of the certified costs of capital improvements, rehabilitation, and energy conservation improvements may be passed through to the tenants who benefit from such work and improvements. However no increase under this Subsection 7.12(c)(1) shall exceed, in a twelve-month period, ten percent (10%) of the tenant's base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to this 10% or $30.00 limitation.

(2) Applications Filed On or After November 14, 2002 For Qualified Energy Conservation Improvements and Renewable Energy Improvements. For Applications filed on or after November 14, 2002, the following provisions shall apply to certification of costs for qualified energy conservation improvements and renewable energy improvements:

(A) Amortization Periods and Allowable Costs. For purposes of this Subsection, qualified energy conservation improvements and renewable energy improvements are:

(i) 100% of new EPA Energy-Star-compliant refrigerators where the refrigerator replaced is more than five years old and where the unit has separate metering, which costs shall be amortized on straight-line basis over a ten-year period; and,

(ii) Other improvements as may be approved by the Board of Supervisors upon recommendation of the Rent Board, following hearings and development of an Energy Conservation Improvements and Renewable Energy Improvements List of energy conservation improvements and renewable energy improvements that demonstrably benefit tenants in units that have separate electrical and/or natural gas metering by the Commission on the Environment.

(3) Applications Filed On or After November 14, 2002 For Seismic Work and Improvements Required by Law, and for Work and Improvements Required by Laws Enacted After November 14, 2002. For applications filed on or after November 14, 2002, the following provisions shall apply to certification of costs for seismic work and improvements required by law and to costs for capital improvement, rehabilitation, energy conservation, and renewable energy work and improvements required by federal, state, or local laws enacted on or after November 14, 2002:

(C) Amortization Periods. Costs shall be amortized on a straight-line basis over a twenty-year period.

(D) Allowable Increase. One hundred percent (100%) of the certified costs of capital improvement, rehabilitation, energy conservation, and renewable energy work and improvements required by law may be passed through to the tenants who benefit from such work and improvements. Any rent increases under this Subsection 7.12(c)(3) shall not exceed, in a twelve-month period, a total of ten percent (10%) of the tenant's base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to this 10% or $30.00 limitation.

(4) Applications Filed On or After November 14, 2002 for Other Work and Improvements On Properties With Five Residential Units or Less. For applications filed on or after November 14, 2002, the following provisions shall apply to certification of all work and improvements for properties containing five residential units or less, with the exception of work and improvements costs certified for passthrough under Subsections 7.12(c)(2) or 7.12(c)(3):

(A) Amortization Periods. Costs shall be amortized on a straight-line basis over a ten, fifteen or twenty-year period, depending upon which category described below most closely relates to the type of work or improvement and its estimated useful life.

(i) Schedule I - Ten-Year Amortization. The following shall be amortized over a ten-year period: New roof structure, new roof cover, electrical heaters, central security system, telephone entry systems, new wood frame windows, new mailboxes, weather-stripping, ceiling insulation, seals and caulking, central smoke detection system, new doors and skylights; appliances, such as new stoves, disposals, refrigerators, washers, dryers and dishwashers; fixtures, such as garage door openers, locks, light fixtures, water heaters and blankets, shower heads, time clocks and hot water pumps; and other improvements, such as carpeting, linoleum, and exterior and interior painting of common areas. If the appliance is a replacement for which the tenant has already had the benefit, the cost will not be amortized as a capital improvement but will be considered part of operating and maintenance expenses. Appliances may be amortized as capital improvements when: (1) part of a remodeled kitchen; (2) based upon an agreement between the tenant and landlord; and/or (3) it is a new service or appliance the tenant did not previously have.

(ii) Schedule II - Fifteen-Year Amortization. The following shall be amortized over a fifteen-year period: New floor structure, new ceiling or walls - new sheetrock, wood decks, new stairs, new furnaces and gas heaters, new thermal pane windows, new wood or tile floor cover, new sprinkler systems, air conditioning-central system, exterior siding or stucco, elevator rebuild, elevator cables, new kitchen or bathroom cabinets, and sinks.

(iii) Schedule III - Twenty-Year Amortization. The following shall be amortized over a twenty-year period: New foundation, new plumbing (new fixtures or piping), boiler replacement, new electrical wiring, fire escapes, concrete patios, iron gates, sidewalk replacement and chimneys.

(B) Allowable Increase. One hundred percent (100%) of the certified costs of capital improvement, rehabilitation, and energy conservation work and improvements may be passed through to the tenants who benefit from such work and improvements. However, no increase under this Subsection 7.12(c)(4) shall exceed, in a twelve-month period, five percent (5%) of the tenant's base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years subject to this 5% or $30.00 limitation.

(5) For Applications Filed On or After November 14, 2002 for Other Work and Improvements for Properties with Six or more Residential Units. For applications filed on or after November 14, 2002, the following provisions shall apply to certification of all work and improvements for properties containing six residential units or more, with the exception of work and improvements certified under Subsections 7.12(c)(2) or 7.12(c)(3):

(A) Amortization Periods. Costs shall be amortized on a straight-line basis over a seven or ten-year period, depending upon which category described below most closely relates to the type of work or improvement and its estimated useful life.

(i) Schedule I - Seven-Year Amortization. The following shall be amortized over a seven-year period: Appliances, such as new stoves, disposals, washers, dryers and dishwashers; fixtures, such as garage door openers, locks, light fixtures, water heaters and blankets, shower heads, time clocks and hot water pumps; and other improvements, such as carpeting, linoleum, and exterior and interior painting of common areas. If the appliance is a replacement for which the tenant has already had the benefit, the cost will not be amortized as a capital improvement, but will be considered part of operating and maintenance expenses. Appliances may be amortized as capital improvements when: (1) part of a remodeled kitchen; (2) based upon an agreement between the tenant and landlord; and/or (3) it is a new service or appliance the tenant did not previously have.

(ii) Schedule II - Ten-Year Amortization. The following shall be amortized over a ten year period: New foundation, new floor structure, new ceiling or walls - new sheetrock, new plumbing (new fixtures, or piping) weather stripping, ceiling insulation, seals and caulking, new furnaces and heaters, refrigerators, new electrical wiring, new stairs, new roof structure, new roof cover, new window, fire escapes, central smoke detection system, new wood or tile floor cover, new sprinkler system, boiler replacement, air conditioning-central system, exterior siding or stucco, elevator rebuild, elevator cables, additions such as patios or decks, central security system, new doors, new mail boxes, new kitchen or bathroom cabinets, sinks, telephone entry system, skylights, iron gates, sidewalk replacement and chimneys.

(B) Allowable Increase.

(i) Only fifty percent (50%) of the costs certified under this Subsection 7.12(c)(5) may be passed through to the tenants who benefit from such work and improvements. However, no increase under this Subsection 7.12(c)(5) shall exceed, in a twelve-month period, ten percent (10%) of the tenant's base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to this 10% or $30.00 limitation.

(ii) In the alternative, a tenant may elect to have one hundred percent (100%) of the costs certified under this Subsection 7.12(c)(5) passed through to the tenant. In that event no increase under this Subsection shall exceed, in a twelve-month period, five percent (5%) of the tenant's base rent at the time the application was filed, and over the life of the tenancy the total increase shall never exceed fifteen percent (15%) of the tenant's base rent at the time the application was filed. A tenant must elect this alternative by filing such an election with the Board on a form prescribed by the Board. An election may be filed at any time after the application is filed but no later than fifteen (15) calendar days after the Administrative Law Judge's decision on the application is mailed to the tenant. In a unit with multiple tenants, the election form must be signed by a majority (more than 50%) in order for the election to be accepted. If a timely election is made after a decision has been issued, an addendum to the decision will be issued reflecting the tenant's election.

Section 7.14 Allowance of Interest

(Amended October 4, 1994; amended Subsection (b)(2) and adding subsection (b)(3), January 19, 1999)

A landlord who expends funds for capital improvements or rehabilitation work shall be entitled to a reasonable rate of interest. Any allowance of interest, whether imputed or real, in favor of a landlord pursuant to this section shall be limited to no more than ten (10) percent and shall be amortized over a period equal to the amortization period of the improvement~~, subject to the limitations contained in Section 7.12(d)~~. The following rules shall apply to any request for the allowance of interest.

(a) Allowance of Actual Interest Incurred. The landlord has the burden of proof to establish the actual rate of interest. To meet this burden, the landlord must submit, at a minimum, either the applicable loan agreement, promissory note or other admissible documentary evidence substantiating the rate of interest. In addition, the landlord has the burden to show that the actual rate of interest for which an allowance is sought is reasonable under the circumstances.

(b) Allowance of Imputed Interest. In cases where the landlord does not incur or prove in accordance with subsection (a) any actual interest expense on funds used for capital improvements or rehabilitation work, the landlord shall be entitled to an allowance of imputed interest. The rate of imputed interest shall be determined in accordance with the following rules:

(1) On March 1 of each year, in accordance with subparagraph (b)(2), the Board shall publish ~~two~~ four rates of imputed interest. Subject to the ten (10) percent limitation contained in the first paragraph of this rule, the published rates shall constitute the rates of imputed interest to be allowed on petitions filed on or after March 1 through February 28 (or February 29, as the case may be) of the following year.

(2) The first rate shall be the average of the twelve most recent monthly rates (rounded to the nearest tenth) as posted by the Federal Reserve on their Federal Reserve Statistical Release Internet site for seven-year Treasury Securities and shall apply to certified capital improvement costs amortized over a seven-year period in accordance with Section 7.12(c).

The second rate shall be the average of the twelve most recent monthly rates (rounded to the nearest tenth) as posted by the Federal Reserve on their Federal Reserve Statistical Release Internet site for ten-year Treasury Securities and shall apply to certified capital improvement costs amortized over a ten-year period in accordance with Section 7.12(c).

The third rate shall be the average of the twelve most recent monthly rates (rounded to the nearest tenth) as posted by the Federal Reserve on their Federal Reserve Statistical Release Internet site for twenty-year Treasury Securities and shall apply to certified capital improvement costs amortized over a twenty-year period in accordance with Section 7.12(c).

The fourth rate shall be the average of the ten-year and twenty-year rates (rounded to the nearest tenth) and shall apply to certified capital improvement costs amortized over a fifteen-year period in accordance with Section 7.12(c).

(3) These rates shall be calculated by December 15th of each year using the average of the twelve most recent monthly rates posted by the Federal Reserve for seven, ~~and~~ ten and twenty-year maturity Treasury Securities as of this date.

(c) Government Subsidies or Guarantees. Notwithstanding subparagraphs (a) and (b) of this Section, if the interest is less than 10 percent due to governmental or any other subsidy or guarantee, the landlord shall only be entitled to the actual rate of interest incurred.

(d) ~~This Section was amended on October 4, 1994 and is effective for petitions filed on or after October 18, 1994~~. The Board shall publish the applicable rate of interest for petitions filed between ~~October 18, 1994~~ February 21, 2003 and February 28, ~~1995~~ 2003 before ~~October 18, 1994~~ February 21, 2003.

Last updated: 10/9/2009 11:26:15 AM