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June 5, 2007

June 5, 2007

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

Tuesday, June 5, 2007 at 6:00 p.m. at
25 Van Ness Avenue, Suite 70, Lower Level

I. Call to Order

President Gruber called the meeting to order at 6:10 p.m.

II. Roll Call

Commissioners Present: Becker; Gruber; Henderson; Hurley; Marshall; Mosbrucker; Mosser.

Staff Present: Gartzman; Wolf.

Commissioner Justman appeared on the record at 6:15 p.m.; Commissioner Murphy arrived at the meeting at 6:25 p.m.

III. Approval of the Minutes

MSC: To approve the Minutes of May 22, 2007.

(Hurley/Marshall: 4-0)

IV. Remarks from the Public

A. Tenant Julian Lagos of 128 Garces at Parkmerced (AT070089) said that no evidence has been presented that the ownership of the Villas Parkmerced has transferred and Commissioner Murphy should recuse himself from consideration of the appeals since he sits on the Board of the S.F. Apartment Association, as does Bert Polacci, a principal at Parkmerced.

B. Tenant Robert Drake of 935 Geary #908 (AT070114) submitted additional evidence showing his indebtedness. He told the Board that the utility passthrough should apply to all tenants, and not just the tenants who had electrical upgrade work done in their unit. Mr. Drake believes that it is easier for the landlord to obtain approval of a utility passthrough than a capital improvement, because "they are not as thoroughly reviewed."

C. A tenant at Parkmerced agreed with the allegation that Commissioner Murphy has a conflict of interest regarding this case.

D. Tenant Michael Perlas of 55 Chumasero #12G (AT070081) expressed his belief that Bert Polacci should be deemed the same landlord as the prior owner because he was an Executive Director of Olympic View Realty, is now an Executive Director of the new LLC, and there are no public records available to prove whether or not he had or has an ownership interest in these two entitles. Mr. Perlas maintained that: the effective date of the rent increases should not be the day after the landlord's acquisition of the property; and the annual increase amount of 1.7% should be used for calculation of the operating expense increase because that was the amount in effect when the new landlord substituted in to the petition.

E. Tenant M. K. Venkatachari of 355 Serrano #12C (AT070095) said that the greatly increased insurance costs that formed the basis of the approved increases were not substantiated and created exaggerated results. Mr. Venkatachari feels that tenants should not be "saddled forever by rent increases granted on the basis of a temporary spike in costs."

F. Tenant Anna Marie Hewson of 344 Serrano (AT070105) told the Board that she agreed with the statements of tenant Michael Perlas above and that she was unaware of the amount of the rent increase until she received an accounting from the landlord.

G. Tenant Joyce Yarbrough of 100 Font #1K (AT070079) said that she concurs with the comments offered by the other Parkmerced tenants. Ms. Yarbrough alleged that landlord representative Bert Polacci had said that the operating and maintenance expense petition was initiated by the prior owners, and would be rejected by the current owner.

H. Attorney David Wasserman informed the Board "as an Officer of the Court" that there had never been any improper dealings between Bert Polacci and Commissioner Murphy, and that they had had no contact regarding the operating expense petition.

I. Tenant Kevin White of 500 Hyde St., Apt. 109 (AT070112) said that his lease provides that the landlord has 30 days to accomplish repairs, which turned into 5-1/2 months. Since Mr. White lives in a studio apartment, the loss of his closet space caused a "huge inconvenience," since many of his possessions had to be placed in the hallway. Mr. White said that he was seeking "a sense of justice and to better understand the process."

J. A tenant who resides at 325 Font (AT070118) maintained that Attorney David Wasserman also represents Bert Polacci, which she believes is "an incredible conflict of interest" – she expressed her opinion that this individual "has no ethics whatsoever."

V. Consideration of Appeals

A. 41 Pinto Ave. AT070109

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

The tenant's appeal was filed five months late because the tenant did not realize that he could file an appeal on the grounds of financial hardship.

MSC: To find good cause for the late filing of the appeal. (Marshall/Henderson: 3-2; Gruber, Hurley dissenting)

The landlord's petition for approval of utility passthroughs for 32 of 100 units was granted. 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. (Henderson/Marshall: 5-0)

B. 935 Geary #211, 908, 904 & 712 AT070113 thru -16

The landlord's petition for approval of utility passthroughs for 19 of 114 units was granted. Four tenants appeal the decision on the grounds of financial hardship.

MSC: To accept the appeals of the tenants in unit numbers 211, 712, 904 and 908 and remand the cases for hearings on the tenants' claims of financial hardship. (Becker/Murphy: 5-0)

C. 1550 Bay St. #A409 AT070110

The tenant's appeal was filed one day late because of a delay in the post office's delivery of the mail.

MSC: To find good cause for the late filing of the appeal. (Becker/Marshall: 5-0)

The tenant's petition alleging decreased housing services due to noise from a rooftop ventilation fan and noisy neighbor, as well as a defective mattress set, was denied because the Administrative Law Judge found that the tenant failed to meet her burden of proof. On appeal, the tenant claims that: the standard of proof required by the ALJ is unnecessarily high for an average person; the tenant did not complain about the noise for a period of time because the problem was temporarily remedied; the mattress was in very bad condition; and if the tenant had been given a maintenance request form, she would have filled it out.

MSC: To deny the appeal. (Hurley/Gruber: 5-0)

C. Parkmerced: AT070069 thru -0098

The landlord's petition for rent increases based on increased operating expenses for 1,633 of 3,287 units was granted, in part. The tenants in 34 units appeal the decision, 23 alleging financial hardship and 11 on substantive grounds. Tenants filing hardship claims are as follows:

1. 223 Serrano AT070069

2. 16 Fuente AT070070

3. 12 Fuente AT070071

4. 231 Serrano Dr. AT070106

5. 9 Gonzalez AT070108

6. 145 Gonzalez AT070076

7. 42 Cambon AT070077

8. 226 Cardenas AT070078

9. 55 Chumasero #6K AT070080

10. 55 Chumasero #ME AT070082

11. 50 Chumasero #2J AT070083

12. 750 Gonzalez #5A AT070085

13. 747 Gonzalez AT070086

14. 119 Bucareli Dr. AT070087

15. 12 Garces AT070088

16. 514 Arballo AT070090

17. 546 Arballo AT070091

18. 414 Arballo AT070092

19. 118 Tapia Dr. AT070093

20. 41 Pinto AT070094

21. 344 Serrano AT070105

22. 405 Serrano #10G AT070096

23. 405 Serrano #12D AT070098

The following tenants followed substantive claims, as follows:

24. 7A Gonzalez AT070072

9 Gonzalez AT070073

3 Gonzalez AT070074

7 Gonzalez AT070075

The tenants in four units appeal the decision on the grounds that: they have experienced decreased housing services, including reduced garbage pick-up, mold, lack of paint, dirty laundry rooms, and overgrown weeds; the annual increase should cover any increased expenses the landlord incurs; noise from resident college students has negatively affected the quality of life at the complex; and there was a power outage for 24 hours.

25. 100 Font #1K AT070079

The tenant appeals on the grounds that a rent increase should only be given at the time of the tenant's lease renewal.

26. 55 Chumasero AT070081

The tenant appeals on the grounds that: an employee of the new owners also worked for the prior owner, and therefore there is not a new landlord for purposes of the 5-year limitation on operating expense increases; the effective date of the rent increase should be the date that the new owner substituted in to the petition; and the annual allowable increase that was in effect at the time the new landlord substituted in should be used to determine the amount of the operating expense increase.

27. 329 Font AT070084

The tenants appeal on the grounds that, since the new landlord substituted in to the petition for the prior owner, they are not a different landlord for purposes of exemption from the 5-year limitation on operating expense increases by the same owner.

28. 325 Font AT070118

The tenant appeals on the grounds that: the petition was filed 3 years after a prior O&M petition had been filed by the prior owner, in violation of the 5-year limitation on operating expense increases by the same owner; transfer of ownership was not documented; work orders were not provided by the landlord; the landlord's new earthquake insurance policy does not benefit the tenants; there should have been no increase in garbage expenses, since garbage collection has been reduced; payroll costs should not have increased when there were fewer employees; increased office costs were not proved; the costs of debt service and property taxes actually went down; the burden of proof was inappropriately shifted to the tenants; and the petition should have been administratively dismissed.

29. 128 Garces AT070089

The tenants appeal on the same grounds as the tenant at 325 Font, directly above.

30. 355 Serrano #12C AT070095

The tenant appeals on the grounds that: the landlord failed to prove that the increase in insurance costs was not temporary and the comparison periods could have been chosen to produce exaggerated results; the effective date for the rent increases should be the date that the new landlord subbed in to the petition; the allowable rent increase in effect on the effective date of the rent increases should be used; and the new owner as successor to the prior owner should not be allowed to impose an O&M increase within 5 years of the prior O&M increase.

31. 405 Serrano #10-G AT070097

The tenant appeals on the grounds that the annual increase should cover the landlord's expenses, and it should not be the tenants' responsibility to pay for the upkeep and maintenance of the property.

The Board discussed the above appeals at length and decided to continue consideration of all of the Parkmerced appeals in order to obtain the following additional information from the landlord: 1) documentation of the transfer of the property to the new owners; 2) information as to whether there was identity of interest between the prior and present owner; and 3) documentation of insurance costs for the years 2003 and 2004 to see if the costs went down subsequent to the comparison periods in the petition. Additionally, the parties were asked to brief the issue of whether the 5-year limitation on the imposition of rent increases based on increased operating expenses (Ordinance ß37l8(b)(1)(A)) applies to a new owner who substitutes in to a petition in place of the prior owner and uses the prior owner's expenses to justify the increases. Consideration of the substantive and hardship appeals will be continued at the July 10th Board meeting.

D. 2869 – 23rd St. AL070111

The tenants' petition alleging decreased housing services due to window leaks was granted and the landlord was found liable to the tenants in the amount of $2,500.00. On appeal, the landlord claims that: additional repair work that was done was not addressed in the decision; the tenants failed to prove that they gave continuing notice of the leak since 1998; repairs were made in addition to the cosmetic work that was done; and there are errors in the decision's Findings of Fact.

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

E. 500 Hyde St., Apt. 109 AT070112

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 $131.25 for ceiling leaks in the unit. On appeal, the tenant claims that: the sum granted is insufficient to compensate him for the extent of the damage; he gave repeated notice to the landlord's property manager, who was not persistent in attempting to arrange for repairs; and he lost substantial wages on dates the property manager failed to appear for inspections.

MSC: To accept the appeal and remand the case to the Administrative Law Judge on the record to increase the amount of the rent reduction due to ceiling leaks from $131.25 to $400. (Marshall/Becker: 3-2; Murphy, Gruber dissenting)

VI. Communications

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

A. An Ordinance introduced by Supervisor McGoldrick which would require that landlords re-key or replace locks on all outside doors after a tenant vacates a residential rental unit.

B. An article from SF Gate regarding the adverse consequences to a landlord when tenants convert a rental unit into a marijuana "grow room."

VII. Director's Report

Executive Director Wolf informed the Commissioners that the departmental budget was approved by the Board of Supervisor's Budget Committee upon initial consideration on May 23rd.

IV. Remarks from the Public (cont.)

K. Tenant Kevin White of 500 Hyde (AT070112) told the Board that he asked for compensation in the amount of $400, which is a "paltry amount." Mr. White said that the closet leaked again 3 weeks ago, but the landlord failed to come and investigate. Mr. White claims that he never denied the landlord access to his unit. He believes that the landlord is not effectuating repairs because he turned down their buy-out offer.

VIII. Calendar Items

June 12, 2007 - NO MEETING

June 19, 2007

8 appeal considerations (1 cont. from 5/22/07)

XI. Adjournment

President Gruber adjourned the meeting at 8:05 p.m.

Last updated: 10/9/2009 11:26:18 AM