July 11, 2006

Commissioners Present: Becker; Gruber; Hurley; Justman; Mosser; Murphy; Wasserman.

Commissioners not Present: Henderson.

Staff Present: Gartzman; Lee.

MSC: To approve the Minutes of June 20, 2006.

(Gruber/Becker: 5-0)

A. Steve Williams of Wiegel and Fried, attorney for the landlord at 1040 Ashbury Street (AL060060), told the Board that he disagreed with the ALJ's Memorandum in response to the landlord's appeal because he believes that the obligation and agreement to pay rent is a covenant that runs with the land and is covered by Civil Code Section 1466. He also said that in the case of Larsen v. San Francisco Residential Rent Stabilization and Arbitration Board, the San Francisco Superior Court already decided the issue of successor liability under the Rent Ordinance and that collateral estoppel should apply. He stated that California Rule of Court 977 does not prevent the Rent Board's review of the unpublished Larsen decision. Mr. Williams asked the Board to consider his client's appeal first since he had brought a court reporter to the Board meeting.

B. Michael Rossoff, attorney for the landlord at 1880 Pacific Avenue, agreed that the appeal involving 1040 Ashbury Street should be considered first because there was a court reporter present for that case.

The tenant's hardship appeal of a $77.16 capital improvement passthrough was accepted and remanded for hearing. However, the Administrative Law Judge (ALJ) found insufficient evidence of financial hardship to justify deferral of the passthrough since the tenant's income to rent ratio exceeded the HUD guidelines at the time of initial occupancy, and the tenant is underemployed. The tenant appeals the remand decision, claiming that the ALJ failed to follow the Board's "unambiguous criteria" for determining financial hardship. Due to the lack of a second voting Landlord Commissioner, this appeal was continued from the June 20^{th Board meeting.}

^{The landlord's petition seeking a determination pursuant to Rules Section 1.21 was granted, and the Administrative Law Judge (ALJ) found that the subject unit is not the tenant's principal place of residence. The tenant appeals, claiming that: the ALJ's findings and conclusions are not supported by the evidence; several of the indicia of residency enumerated in Rules Section 1.21 show that the tenant resided at the subject unit at the time the petition was filed, although he may have resided elsewhere from 1998-2004; the tenant timely filed a California tax return in 2005; the subject unit is the tenant's usual place of return; and the Decision ignores evidence favorable to the tenant.}

^{The tenant's petition alleging an unlawful rent increase from $981.22 to $1,895.00 was granted because the Administrative Law Judge (ALJ) found that the petitioner was a tenant and not a subtenant, and therefore no rent increase was authorized by Costa-Hawkins. The landlord appeals the decision on the grounds that: Costa-Hawkins fully occupies the field and the Rent Board does not have jurisdiction over this dispute; the ALJ erred in ruling that the prior landlord entered into a tenancy agreement with the petitioner; the case of Cobb v. San Francisco is distinguishable from the instant case; the original tenant has never surrendered his interest in the unit; and the landlord did not waive its rights to a rent increase because it did not receive written notice of the petitioner's presence in the unit and thereafter accept rent.}

^{The tenant's petition alleging unlawful rent increases was granted and the landlords were found liable to the tenant in the amount of $41,414.10. On appeal, the landlords argue that: the new owner cannot be held liable for rent overpayments made to a prior owner; the Decision conflicts with the Superior Court decision in the case of Larsen v. Rent Board; the Decision is unfair and unjust; and the tenant has a remedy against the prior owner.}

^{MSC: To deny the appeal. (Becker/Mosbrucker: 3-2; Gruber, Murphy}

^dissenting)

^{The landlords' petition for exemption from the Ordinance based on certification of substantial rehabilitation was denied because the Administrative Law Judge (ALJ) found that the landlords failed to provide a detailed description of the work performed, failed to provide proof of costs or proof of payment for any of the costs associated with the project, and did not comply with several other requirements enumerated in Rules Section 8.12. The landlord appeals, arguing that: it was not possible to assemble the required documentation because the rehabilitation work was done over twenty years ago, and plausible substitutes were provided; reasonable inferences that could be drawn were rejected by the ALJ; the failure of the Rent Board to send the case to an independent estimator is evidence that the case was pre-judged; and the landlord asks for another opportunity to obtain the necessary documentation.}

^{MSC: To deny the appeal. (Becker/Marshall: 3-2; Gruber, Murphy}

^dissenting)

^{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 $5,000 due to lack of heat in the unit. On appeal, the landlord claims under penalty of perjury not to have received notice of the hearing, and also maintains that there has been no decrease in services, because heat has always been provided to the tenant by the landlord.}

^{MSC: To remand the case for a new hearing, based on the landlord's declaration of non-receipt of notice. The reduced base rent shall remain in effect until and unless a different base rent is established by the Board. (Becker/Gruber: 5-0)}

^{The tenant's petition alleging an unlawful rent increase from $905.86 to $2,500.00 was granted because the Administrative Law Judge (ALJ) found that the petitioner was a tenant and not a subtenant, and therefore no rent increase was authorized by Costa-Hawkins, and that a 6.14 notice had not been timely served. The landlord appeals, arguing that: the tenant failed to prove that she was a tenant prior to service of the 6.14 notice; the landlord's evidence was not considered in the Decision, which is based solely upon inadmissible hearsay; the petitioner is an assignee, and not a tenant; the landlord did not waive his right to a rent increase because he did not receive written notice of the petitioner's presence in the unit and thereafter accept rent; and the 6.14 notice was timely.}

^{In addition to correspondence concerning cases on the calendar, the Commissioners received the following communication:}

^{Senior Administrative Law Judge Tim Lee gave the following legislation and litigation update:}

^{A. The Mirkarimi legislation, which requires a landlord to have a just cause reason to sever, reduce or remove specified housing services, including parking, storage, laundry rooms, decks or gardens, will become law without the mayor's signature on August 8, 2006.}

^{B. In Brown v. Rent Board, the Superior Court found that acceptance of rent from the master tenant is sufficient to establish a waiver under Civil Code Section 1954.53(d)(4), and remanded the case to the Board to determine if the landlord received sufficient notice that the master tenant no longer permanently resided in the unit so the landlord could have imposed an unlimited rent increase under Costa-Hawkins.}

^{C. In Golden Gateway Center v. Rent Board, the owner is seeking a writ ordering the Board to hold full oral hearings on twenty utility passthrough petitions that were untimely filed in 2006 rather than dismiss the petitions without a hearing. The hearing on the owner's writ is set for July 12, 2006.}

^{D. In M-J SF Investments, LLC v. CCSF, in addition to seeking to overturn the City's denial of the owner's condominium application for 901 Bush Street, the owner claims that Rent Board Regulation 12.19 is preempted by state law, specifically, the Costa-Hawkins Rental Housing Act. Regulation 12.19 gives tenants displaced by a natural disaster the right to return to the units when repairs have been made. A hearing on the owner's motion for judgment on the pleadings is set for July 31, 2006.}

^{SRO Hotel Visitor Policy}

^{Two Public Hearings were held on proposed amendments to the Hotel Visitor Policy, the first on January 17, 2006 and the second on May 30, 2006. After the first Public Hearing, the Board asked that the Executive Director convene a Committee of tenant and landlord representatives to discuss the issues raised and find points of agreement, which were brought back to the Board for their approval on May 30th. At that time, the Commissioners felt that certain additional changes were warranted, specifically: that a loss of visitor rights for 30 days due to a guest's failure to sign out should only occur after the tenant is given written notice of the violation within seven days; and that written notice should be provided when someone is 86ed from a hotel. The Commissioners suggested additional language to reflect these changes. Since these additional changes constituted deviations from agreements reached by the Committee, and favored tenants, it was agreed that the Executive Director would contact landlord representatives Sam Patel and Henry Karnilowicz and get their input. Ms. Wolf did so, and both Mr. Patel and Mr. Karnilowicz indicated that they had no major objections to the additional changes, and considered them "minor." Prior to the July 11th meeting, a residential hotel manager contacted the Executive Director to ask for clarification of proposed new section 3D which provided, "Any time a visitor is excluded from the hotel, notice must be put in writing after the fact with the person's name and the reason for the exclusion." Specifically, he asked that the policy specify who should be given the notice. The Commissioners agreed that written notice should be provided to the tenant and made the following additional amendments to Section 3D (new language underlined; strike-through indicates deleted language):}

^{The Board then passed the following motion:}

^{To receive visitors between 9:00 a.m. and 9:00 p.m. daily. A maximum of two (2) day time visitors at a time per room may be imposed by management. There is no limit on the total number of visitors a tenant may have per day, week or month.}

^{Children 13 years old and under shall not be counted towards the visitor limitation rule. However, a maximum of two (2) children per room at a time can be imposed by management.}

^{C. Caregivers of disabled tenants shall be exempt from visitor limitations. The owner or operator of the hotel may request medical verification or a caregiver I.D. card.}

^{A. Owners or operators are entitled to request that visitors provide identification as follows:}

^{A. disturb the peaceful enjoyment of the premises by other tenants and neighbors;}

^{B. destroy, deface, damage, impair, or remove any part of the structure or dwelling unit, or the facilities or equipment used in common; or,}

^{C. have committed repeated violations of the visitor policy which can be construed as creating a nuisance on the property; or constituting substantial interference with the comfort, safety or enjoyment of the landlord or tenants, which can be a just cause for eviction under the Rent Ordinance, as determined by the courts.}

^{D. Any time a tenant's visitor is excluded from the hotel, written notice must be delivered to the tenant after the fact with the visitor's name and the reason for the exclusion.}

^{C. Allen White thanked the Board for passing the Uniform Hotel Visitor Policy. He expressed his concern that a visitor who is 86ed from a hotel will never know about being 86ed if notice is just given to the tenant and not to the visitor. He stated that there is a diverse range of residential hotels and a diverse range of residential hotel tenants and consequently, the City should deal with issues affecting residential hotel tenants on a bigger level.}

^{July 18th & 25th, 2006 – NO MEETINGS}

^{August 1, 2006 – 4 appeal considerations}

^{President Wasserman adjourned the meeting at 8:00 p.m.}