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June 21, 2005

June 21, 2005

 

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

Tuesday, June 21, 2005 at 6:00 p.m. at
25 Van Ness Avenue, Suite 70, Lower Level

 

    I.     Call to Order

     Commissioner Becker called the meeting to order at 6:05 p.m.

    II .     Roll Call

    Commissioners Present:    Becker; Hurley; Mosbrucker; Mosser.

    Commissioners not Present:    Gruber; Henderson; Marshall; Murphy; Wasserman.

    Staff Present:    Gartzman; Wolf.

    Commissioner Justman appeared on the record at 6:25 p.m.

    III.     Approval of the Minutes

    MSC:    To approve the Minutes of June 7, 2005.

        Mosbrucker/Hurley:  (4-0)

 

    IV.     Remarks from the Public

    Tenant Wayne Cameron of the case at 1044 Pine #9 (AT050145) told the Commissioners that: the subject unit has been his home for 25 years; he is not wealthy and does not have another home; he operates a full-time tax practice out of the apartment; and, since the public schools in San Francisco are deficient, his son lives with his girlfriend in Pacifica and attends school there.

 

    V.     Consideration of Appeals

    A.  830 Sutter #12            AT050150

    The landlord filed two petitions for certification of capital improvement costs, which were granted.  One tenant appeals the decisions on the grounds of financial hardship.

    MSC: To accept the appeal and remand the case for a hearing on the tenant’s claim of financial hardship.  (Mosbrucker/Mosser:  4-0)

 

    B.    1550 Bay St. #D464            AT050147

    The tenant’s appeal was filed almost four months late because the tenant was inadvertently omitted from the joint appeal submitted by the tenants in 45 units.

    MSC: To find good cause for the late filing of the appeal.  (Mosbrucker/Becker:  4-0)

The landlord’s petition for certification of capital improvement costs in the amount of $3,093,759.80 was granted, in part, and costs of a major remodeling project in the amount of $1,152,106.27 were certified for passthrough to the tenants in eighty-six units.  The tenant appeals the decision on the grounds that the approved passthrough should only be retroactive to the date the first facially adequate petition was filed by the landlord; and a payment schedule should be established for the arrearages owed.

     MSC: To accept the appeal and remand the case to the Administrative Law Judge to make the capital improvement passthrough effective as of June 6, 2003, when the Second Amended Petition was filed; and to establish a repayment schedule for arrearages owed at the following rate:  on or before August 1, 2005, the tenant shall pay a lump sum in the amount of fourteen months’ worth of the certified monthly passthrough for her unit, with the balance owing to be paid in equal installments over a 10-month period, along with the current certified monthly passthrough, commencing August 1, 2005.  

 

    C.  248 Golden Gate #E            AT050151

    The landlord’s petition for certification of capital improvement costs was granted, resulting in a monthly passthrough in the amount of $22.96.  One tenant appeals the decision on the grounds of financial hardship.

    MSC: To accept the appeal and remand the case for a hearing on the tenant’s claim of financial hardship.  (Mosbrucker/Mosser:  4-0)

    D.    2367 – 20 th Ave. #3            AL050144

    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 $591.25 for broken hallway and bathroom windows.  The landlord appeals, claiming that:  the hallway window was painted shut at the inception of the tenancy and does not constitute a reduction in a housing service; the bathroom window is not rotted or in poor condition and the $25 rent reduction granted is arbitrary; and the tenant cannot afford the rent and was financially motivated in bringing the petition.

    MSC: To deny the appeal.  (Mosbrucker/Becker:  4-0)

    E.    134 – 3 rd Ave.            AT050148

    The tenant’s petition alleging decreased housing services was granted, in part, and the landlords were found liable to the tenant in the amount of $4,600.00.  The tenant appeals, asserting that:  the rent reduction for lack of heat is inadequate as it only covers 23 of 129 months of the tenancy; contrary to the finding in the decision, the tenant has been assessed late fees after the landlords changed the date that rent payments are due; the tenant can prove the amounts he has wrongfully paid for garbage service; and the landlords should be assessed punitive damages.

    MSC: To accept the appeal and remand the case to the Administrative Law Judge for a hearing on the following issues:  the length of time the rent reduction for lack of heat should be granted; the amount owing to the tenant from the landlord for garbage pickup; and the change in the rent payment due date and late fees, if any.  (Mosbrucker/Becker:  3-2; Hurley, Mosser dissenting)

 

    F.    1044 Pine St. #9            AT050145

    The landlord’s petition for a determination pursuant to Rules Section 1.21 was granted as the Administrative Law Judge determined that the subject unit is not the tenant’s principal place of residence.  On appeal, the tenant maintains that: he was prejudiced because his requests for postponement of the hearing were denied so he was forced to testify by telephone, and the landlord failed to appear and be subject to cross-examination; there is nothing in the regulation that specifies the relevant time period for determining a tenant’s principal place of residence, and no evidence was submitted as to where the tenant resided on the date the petition was filed; the fact that the tenant co-owns property and his son attends school in Pacifica does not make that community his principal place of residence; where a tenant sleeps is indicative, but not conclusive, as to their principal place of residence; the indices of residency enumerated in the regulation show the subject unit as the tenant’s principal place of residence; the landlord is acting with a retaliatory motive; and the Rent Board did not have the authority to enact Rules Section 1.21.

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

    After discussion, it was the consensus of the Board to continue this case to the next Board meeting, when more Commissioners will be present.

 

    G.    440 Davis Ct. #1507            AT050143

    The landlord’s petition for a determination pursuant to Rules and Regulations Section 1.21 was granted as the Administrative Law Judge found that the subject unit is not the tenant’s principal place of residence.  On appeal, the tenant claims that the Administrative Law Judge exhibited bias against the tenant by mischaracterizing and/or omitting important evidence; the testimony of the landlord’s private investigator supported the tenant’s case; the tenant’s statement that he never had a homeowner’s exemption on property in Carmel owned by his wife is factually accurate; the Grant Deed submitted post-hearing by the tenant shows that the Carmel property was acquired by both he and his wife for financing purposes, but immediately transferred to the tenant’s wife as her separate property; the tenant also had a homeowner’s exemption on a property in Sonora, which was purchased as a vacation home; the car that the tenant drives was parked at the subject premises; the tenant’s possessions are in the subject unit; the subject unit is the tenant’s usual place of return, and the place he infrequently leaves; and the enactment of Section 1.21 exceeded the Commission’s authority.

    MSC: To deny the appeal.  (Mosser/Hurley:  3-2; Becker,

        Mosbrucker dissenting)

 

    H.  2337 Francisco St.            AL050149

    The tenant’s petition alleging an unlawful increase in rent from $2,700.00 to $3,000.00 per month was granted and the landlord was found liable to the tenant in the amount of $600.00.  The Administrative Law Judge found that the amount of $2,700.00 was not a temporary reduction in the rent due to the tenant’s financial difficulties, as alleged by the landlord.  Rather, the ALJ determined that the $300.00 per month reduction constituted a renegotiated lowering of the rent due to market conditions at the time.  On appeal, the landlord maintains that:  an agreement to lower the base rent constitutes a contract dispute, which must be adjudicated in court; and no new rental agreement was entered into and the original lease remains in effect.

    MSC: To deny the appeal.  (Becker/Mosbrucker:  3-2; Hurley,

        Mosser dissenting)

 

    VI.     Communications

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

 

        A.  A Pending Litigation Status Report from Senior Administrative Law Judge Tim Lee.

 

        B.  Articles from the Examiner and Beyond Chron regarding the possibility of displacement of tenants by large buildings being converted to TICs.

 

        C.  An article from Beyond Chron regarding Board of Supervisor approval of the conversion to condos of the building at 400 Vallejo, since Subdivision Code Section 1386 does not apply when a hearing before the Planning Commission has already been held and a decision issued.

 

        D.  An article from the Chronicle regarding an agreement between the landlord/developer and tenants at the Trinity Plaza apartment complex.

 

    VII.     Director’s Report

    Acting Executive Director Wolf told the Board that she gave a presentation at the June meeting of the Small Property Owners of San Francisco.

 

    VIII.     Old Business

    Water Bill Increase Passthroughs Resulting from Issuance of Water

    System Improvement Revenue Bonds

    (Ordinance Section 37.3(a)(5)(B)    

    Senior Administrative Law Judge Sandy Gartzman further discussed with the Board proposed regulations she had drafted regarding landlords’ right to pass through to tenants 50% of the increase in their water bills attributable to the issuance of bonds authorized at the November 5, 2002 election (Proposition A).  Ms. Gartzman brought new Section 10.14 to the Board’s attention, which provides that a tenant may challenge a water revenue bond passthrough within one year of the effective date of the passthrough.  The Commissioners then passed the following motion:

    MSC: To put out for Public Hearing proposed regulations implementing procedures for the passthrough of 50% of water bill increases related to the issuance of Water System Improvement Revenue Bonds authorized at the November 5, 2002 election (Proposition A).  (Mosbrucker/Mosser:  5-0)

    The Public Hearing will be held on July 19, 2005 at 6:30 p.m.  Proposed new Sections 4.14 and 10.14 read as follows below:

    Section 4.14     Water Revenue Bond Passthrough

                (Added [date])

        (a)  A landlord may pass through fifty percent (50%) of the water bill charges attributable to water rate increases resulting from issuance of Water System Improvement Revenue Bonds authorized at the November 5, 2002 election (Proposition A), to any unit that is in compliance with any applicable laws requiring water conservation devices. The landlord is not required to file a petition with the Board for approval of a water revenue bond passthrough.  

        (b)  The landlord shall give the tenant(s) legal notice of any water revenue bond passthrough.

            (1)  The notice shall specify the dollar amount of the monthly passthrough,  the period of time covered by the water bill(s) that are used to calculate the passthrough and  the number of months that the tenant is required to pay the passthrough.

            (2)  The notice shall explain that the passthrough is based on increased water bill charges attributable to water rate increases resulting from issuance of water revenue bonds authorized at the November 2002 election.

            (3)  The charges and the calculation of the passthrough shall be explained in writing on a form provided by the Board, which form shall be attached to the notice.

            (4)  The notice shall state that the tenant is entitled to receive a copy of the applicable water bill(s) from the landlord upon request.

            (5)  The notice shall state that the unit is in compliance with any applicable laws requiring water conservation devices.

        (c)  The landlord shall calculate the amount of the water revenue bond passthrough as follows:

    (1)   Step 1 : Compile the water bill(s) to be included in the calculation of the water revenue bond passthrough. The landlord may base the calculation on a single water bill or, in the alternative, on all of the water bills for any calendar year.  Where the landlord elects to calculate the passthrough based on calendar year, the passthrough shall be based on actual costs incurred by the landlord during the relevant calendar year(s), regardless of when the water bills were received or paid.

    (2)   Step 2 : Add up the water bill charges attributable to water rate increases resulting from issuance of Water System Revenue Bonds authorized at the November 5, 2002 election. These charges are listed as a separate line item on the water bill. Divide that figure by two (since a 50% passthrough is permitted) in order to obtain the total amount permitted to be passed through to tenants in the building.

Improvement

        (3)   Step 3 : Divide the amount determined in Step 2 above by the total number of units covered by the water bill(s), including commercial units, to obtain the allowable passthrough per unit.  

        (4)   Step 4 : Divide the amount determined in Step 3 above by the number of months covered by the water bill(s) to determine the monthly passthrough amount for each unit covered by the water bill(s).

        (d)  The monthly passthrough amount determined in Step 4 can be imposed only for the same number of months covered by the water bills that are used in the passthrough calculation. For example, if the landlord imposes a water revenue bond passthrough based on a single water bill with a two-month bill cycle, the monthly passthrough remains in effect for two months only. If the landlord imposes a water revenue bond passthrough based on water bills for charges incurred during an entire calendar year, the monthly passthrough remains in effect for twelve months. If the landlord imposes a water revenue bond passthrough based on water bills for charges incurred during two calendar years, the monthly passthrough remains in effect for twenty-four months.

        (e) Where the landlord elects to calculate the water revenue bond passthrough based on a single water bill, the passthrough may be imposed at any time, provided that the landlord serves notice of such passthrough within sixty (60) days of receipt of the water bill. Where the landlord elects to calculate the water revenue bond passthrough based on water bills for charges incurred during an entire calendar year, the passthrough may be imposed at any time, provided that the landlord serves notice of such passthrough to be effective on the tenant’s anniversary date.

            (f)  Only those tenants in residency during the billing period(s) in which the water bill charges were incurred may be assessed the passthrough.

            (g) The amount due from the tenant for any water revenue bond passthrough shall be due on the same date as a rent payment normally would be due.

            (h)  The water revenue bond passthrough shall not be included in the tenant's base rent for purposes of calculation of the amount of rent increases allowable under the Ordinance and these Rules and Regulations.

        (i)  Nothing in this section or in these Rules and Regulations shall be interpreted as requiring any landlord to pass through any water rate increases resulting from issuance of Water System Improvement Revenue Bonds authorized at the November 5, 2002 election.  However, the provisions of this Section shall be deemed a part of every rental agreement or lease, written or oral, for the possession of a rental unit subject to the Ordinance unless the landlord and tenant agree that the landlord will not pass through any charges based on water rate increases resulting from issuance of Water System Improvement Revenue Bonds authorized at the November 5, 2002 election, in which case such agreement will be binding on the landlord and on any successor owner of the building, unless such agreement is changed in accordance with applicable law.

    (j)  Where a water revenue bond passthrough has been lawfully demanded of a tenant, a change in the ownership of the building in which the tenant's unit is located will not affect the tenant's liability to pay the amount passed through.

    (k)  Where a tenant alleges that the landlord has imposed a water revenue bond passthrough that is not in compliance with Ordinance Section 37.3(a)(5)(B) and Rules and Regulations Section 4.14, the tenant may petition for a hearing under the procedures provided in Ordinance Section 37.8. In such a hearing, the landlord shall have the burden of proof. Any tenant petition challenging such a passthrough must be filed within one year of the effective date of the challenged water revenue bond passthrough. The filing of a petition by a tenant does not relieve the tenant of his or her obligation to pay the passthrough pending a final determination. Grounds for challenging a water revenue bond passthrough are set forth in Section 10.14 of these Rules and Regulations.

    (l)  A tenant may file a hardship application with the Board requesting relief from all or part of a water revenue bond passthrough. Any hardship application must be filed within one year of the effective date of the water revenue bond passthrough(s). Payment of the water revenue bond passthrough(s) set forth in the hardship application shall be stayed until a decision is made by the Administrative Law Judge after a hearing on the tenant’s hardship application. Appeals of decisions on a tenant’s hardship application shall be governed by Ordinance Section 37.8(f).

     Section 10.14   Improper Water Revenue Bond Passthrough

    (Added [date])

     (a)  Within one year of the effective date of a water revenue bond passthrough, a tenant may petition for an arbitration hearing on the following grounds;

        (1)  The landlord has not properly calculated the passthrough;

        (2)  The passthrough is calculated using an incorrect unit count;

        (3)  The landlord failed to provide a clear written explanation of the charges and the calculation of the passthrough;

        (4)  The unit is not in compliance with applicable laws requiring water conservation devices;

        (5)  The tenant requested a copy of the applicable water bill(s) and the landlord has not provided them;

        (6)  The tenancy began during or after the billing period(s) included in the passthrough calculation;

        (7)  The landlord failed to discontinue the passthrough after it was fully paid.

    (b)  The landlord shall have the burden of proving the accuracy of the calculation that is the basis of the water revenue bond passthrough, and that the unit is in compliance with applicable laws requiring water conservation devices.

    (c)  A petition based on this section shall be accompanied by the notice of the water revenue bond passthrough.

 

    IX.     New Business

 

    The Board will be holding an appeal hearing regarding the property at 2201 Pacific #601 (AT050139) at their meeting on August 2 nd .  In preparation for the hearing on this Rules Section 1.21 case, Commissioner Justman wondered if there was certain information that would be useful for the Board to request that the parties provide.  This issue will be discussed at the next Board meeting.

 

    X.     Calendar Items

 

         June 28, 2005 - NO MEETING

 

         July 5, 2005

        6 appeal considerations (1 cont. from 6/21/05)

        Old Business:  2201 Pacific #601 Board Hearing (AT050139)

        New Business:  Appointment of Executive Director

 

    XI.     Adjournment

 

    Commissioner Becker adjourned the meeting at 7:40 p.m.

Last updated: 10/9/2009 11:26:17 AM