Section 6.11 Comparables

(Amended February 28, 1984; August 9, 1989; August 29, 1989; Section 6.11(d )added, January 31, 1995 effective February 1, 1995; amended February 7, February 14 and March 7, 1995;deleted and adopted April 25, 1995, effective February 1,1995; amended February 17, 2004)

A rent increase may be granted pursuant to this section 6.11 only one time during the life of the unit, and Sections 6.11(a) and 6.11(b) are each mutually exclusive of the other; however, a landlord may petition for an increase under both Sections 6.11(a) and 6.11(b) in the alternative.

(a) Petition Based on Extraordinary Circumstances

(1) The provisions of this Section 6.11(a) shall apply only in the following situations:

(A) where, because of a special relationship between the landlord and tenant, or due to fraud, mental incompetency, or other extraordinary circumstances unrelated to market conditions, the initial rent on a unit was set very low or the rent was not increased or was increased only negligible amounts during the tenancy; or

(B) where the landlord became owner of record of a Proposition I Affected Unit between September 1, 1993 and December 22, 1994, or where the landlord entered into an agreement to purchase a Proposition I Affected Unit which agreement became non-contingent on or after September 1, 1993 and before November 9, 1994, and, in becoming owner of record or entering into the purchase agreement, the landlord relied on the ability to increase rents without limitation from the Rent Ordinance.

Passage of Proposition I at the November 1994 election does not in and of itself satisfy this Section 6.11(a)(1), though it may be considered.

(2) A rent increase during a tenancy may be considered justified, even in the absence of an increase in costs of operating and maintenance expenses as limited in Section 6.10 above, if it is established that the rent for the unit is significantly below those of comparable units in the same general area as defined in Section 6.11(a)(3) below. If a rent increase is granted pursuant to this Section 6.11(a), the increase shall preclude the imposition of all annual rent increases, banked increases, and operating and maintenance increases that the landlord could have imposed prior to the filing of the petition. Petitions for Proposition I Affected Units based upon comparable rents 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, in which case rents for comparable units as of May 1, 1994 shall be used for comparison; provided, however, that the actual date of filing shall be used to determine the effective date of any rent increase pursuant to Sections 5.12 and 5.13 above. For purposes of the preceding sentence, the landlord may establish rents of comparable units as of May 1, 1994 by presenting evidence of current rents of comparable units, in which case rent on May 1, 1994 may be presumed to equal 98.9% of current rent.

(3) The length of occupancy of the current tenant, size and physical condition of the unit and building, and services paid for by the tenant are important factors (though not the exclusive ones) in determining whether or not a unit is "comparable" to another, as the term "comparable" is used in the Rent Ordinance and in these Rules. Evidence of reasonably comparable units is required; however, "perfect" comparability is not required. The issue of "rent for comparable units" may be raised by a landlord or a tenant.

(4) For Proposition I Affected Units, when determining the length of occupancy of the current tenant, occupancy before April 15, 1979 need not be considered if it appears from both the landlord's and the tenant's evidence that it is impractical to do so under the circumstances; however, occupancy before the unit most recently became subject to rent regulation shall not be considered when:

(A) the requirements of Section 6.11(a)(1)(A) are satisfied, and the rent at the time the unit most recently became subject to rent regulation was not arrived at through arm's length negotiations due to a special relationship, fraud, mental incompetency, or some other reason; or

(B) the requirements of Section 6.11(a)(1)(B) are satisfied, and an additional rent increase is necessary to relieve the landlord from hardship, also taking into consideration tenant hardship if raised and if not inconsistent with the constitutional rights of the landlord. The landlord may not assert hardship pursuant to this Section unless the landlord has completed a hardship application (which can be obtained from the Rent Board), and filed the hardship application along with the landlord's petition for a rent increase. If the landlord asserts hardship pursuant to this Section, then Rent Board staff shall mail to the tenant a blank hardship application at least twenty days prior to the hearing on the landlord's petition. The tenant may not assert hardship pursuant to this Section unless the tenant has completed the hardship application and mailed it (or delivered it) to the landlord and to the Rent Board at least ten day prior to the hearing on the landlord's petition. The landlord shall have the burden of proving landlord hardship, and the tenant shall have the burden of proving tenant hardship. Except on remand from the Rent Board or pursuant to this Section, the Administrative Law Judge may not consider the hardship of either party.

(b) Petition Based on the Past Rent History of a Proposition I Affected Unit

(1) The provisions of this Section 6.11(b) shall apply only to Proposition I Affected Units.

(2) A landlord may petition for only one of the following increases:

(A) A 7.2% rent increase during a tenancy may be considered justified, even in the absence of an increase in costs of operating and maintenance expenses as limited in Section 6.10 above, if it is established that no Rent Increases (as defined in Section 37.2(o) of the Rent Ordinance) were in effect between May 2, 1991 and May 1, 1994;

(B) An 11.2% rent increase during a tenancy may be considered justified, even in the absence of an increase in costs of operating and maintenance expenses as limited in Section 6.10 above, if it is established that no Rent Increases (as defined in Section 37.2(o) of the Rent Ordinance) were in effect between May 2, 1990 and May 1, 1994; or

(C) A 15.2% rent increase during a tenancy may be considered justified, even in the absence of an increase in costs of operating and maintenance expenses as limited in Section 6.10 above, if it is established that no Rent Increases (as defined in Section 37.2(o) of the Rent Ordinance) were in effect between May 2, 1989 and May 1, 1994.

(3) By executing a waiver form which can be obtained from the Rent Board, a tenant may waive the right to a hearing on a petition for increase brought under this Section 6.11(b), in which case the Administrative Law Judge shall issue a determination based on the facts as alleged in the petition.