Topic No. 363: Tenant Financial Hardship Applications
A tenant may seek relief from payment of the following types of rent increases or passthroughs on the grounds of financial hardship by filing a Tenant Financial Hardship Application with the Board:
- Capital Improvement Passthrough
- Water Revenue Bond Passthrough
- Utility Passthrough
- Operating and Maintenance Expense Rent Increase
For all other types of rent increases or passthroughs, including general obligation bond passthroughs, annual and banked rent increases, and rent increases authorized by the Costa-Hawkins Rental Housing Act, financial hardship relief is not available.
A Hardship Application should only be filed after the tenant has received either a rent increase notice from the landlord or a Rent Board decision approving the rent increase or passthrough. Once the tenant has filed the Hardship Application, the tenant does not have to pay the passthrough or increase unless the Rent Board issues a final decision denying the Hardship Application.
A copy of the tenant’s Hardship Application is sent to the landlord, who has fifteen days to request a hearing to dispute the tenant’s claim of eligibility. If the landlord does not contest the Hardship Application, an Administrative Law Judge will determine whether a hearing is required to obtain additional evidence, or whether the case can be decided without a hearing. If a hearing on the Hardship Application is required, the hearing will be held at the Rent Board’s office and a Notice will be mailed to the parties at least ten days before the hearing. After the hearing, the Administrative Law Judge will issue a written decision granting or denying the Hardship Application.
If the landlord is satisfied with the tenant’s evidence of financial hardship, they may elect to withdraw the unit from the underlying petition or passthrough worksheet before a decision is issued on the tenant’s Hardship Application. If the unit is withdrawn, the tenant is not obligated to pay the rent increase or passthrough amount.
If the Hardship Application is withdrawn by the tenant or denied by a Rent Board Administrative Law Judge, the tenant will have to pay the passthrough or increase retroactive to the effective date indicated on the rent increase notice. If the Hardship Application is granted, relief from payment of the passthrough or increase may be for an indefinite period or for a limited period of time, depending on the nature of the tenant’s financial hardship.
Time of Filing
For Capital Improvement Passthroughs, the tenant may file a Hardship Application at any time after they have received a capital improvement rent increase notice or a Rent Board decision granting the landlord’s capital improvement passthrough.
For Water Revenue Bond Passthroughs, the tenant must file the Hardship Application within one year after the effective date of the passthrough.
For Utility Passthroughs, the tenant must file the Hardship Application within one year after the effective date of the passthrough, or, if the landlord filed a Utility Passthrough Petition, the hardship application may be filed within 15 calendar days of the mailing of the decision granting the landlord’s petition for approval of the utility passthrough, whichever date is later. Note that if the passthrough was based on a Utility Passthrough Calculation Worksheet, no decision is issued by the Rent Board and the Hardship Application must be filed within one year after the effective date of the passthrough.
For Operating and Maintenance Expense Rent Increases, the tenant must file the Hardship Application within one year after the effective date of the rent increase, or within 15 calendar days of the mailing of the decision granting the landlord’s petition for approval of the Operating and Maintenance Expense rent increase, whichever date is later.
A tenant can qualify for hardship relief under any one of the following three standards:
- All adults in the household are low-income recipients of means-tested public assistance, such as Social Security Supplemental Security Income (SSI), General Assistance (GA), Personal Assisted Employment Services (PAES), CalFresh (SNAP/food stamps) or California Work Opportunity & Responsibility to Kids (CalWORKS).
- (a) The monthly rent charged for the unit is greater than 33% of the tenant’s monthly gross household income; AND (b) the tenant’s assets, excluding retirement accounts and non-liquid assets, do not exceed asset amounts permitted by the Mayor’s Office of Housing when determining eligibility for below market rate (BMR) home ownership AND (c) the tenant’s monthly gross household income (before taxes) is less than 80% of the current Unadjusted Area Median Income (AMI) as published by the U.S. Department of Housing and Urban Development (HUD) for the “Metro Fair Market Rent Area” that includes San Francisco. (See the Tenant Financial Hardship Application for the current applicable income and asset thresholds.)
- The tenant has exceptional circumstances that make payment of the rent increase(s) a hardship, such as excessive medical bills.
The Hardship Application can be filed by one tenant in the household, but each adult (age 18 or over) in the household must also provide the required income and asset information and sign a Declaration under penalty of perjury. Note that a subtenant who pays rent to the tenant does not need to provide income and asset information on the Hardship Application. However, any subtenant’s rental payment to the tenant must be listed as part of the tenant’s gross income on the Hardship Application.