Rent Board Redux
Too Many Cooks
If capital improvements are passed through to tenants, should they have a say in the contract?
Editor’s Note: The following San Francisco Rent Board cases are real, though they have been edited for space and clarity. They have been selected to highlight some of the more interesting cases that the board reviewed at its June through September 2018 commission meetings. For full rent board agendas and minutes, please visit sfrb.org.
1600 Block of Mason Street
The landlord’s capital improvement petition for certification of the costs of exterior painting and a shotcrete wall to stabilize the hillside to two of four units was granted. On appeal, the tenant contends that the actual square footage of his unit is less than that shown in the Assessor’s measurements; that square footage measurements are important for calculating future bond passthroughs; and that no evidence of erosion control was provided by the landlord at hearing.
A tenant residing in the same property as the appellant told the Board that the landlord petitioned to pass through two capital improvements, and that only she and the appellant are asked to pay for this passthrough. She stated that she still believes that there has been no real evidence produced to prove the necessity of this work, and she wasn’t aware that the landlord provided evidence after hearing. She said that the engineering firm commissioned by the landlord wrote the letter after the second hearing at the request of the landlord. She said that the cost was too much, and was also submitted after the second hearing. She said that she is not sure whether there is a necessity for the work, and she still objects.
After the decision, she again said that she wasn’t aware that the landlord had made additional post-hearing submissions, as the tenants never heard a word from the original geotechnical engineer. She stated that because of the cost and limited funds, the tenants could not bring more valid objections and could not hire their own engineer to get their own expert opinion. She said that the whole thing is fishy, because if you saw the site, it wasn’t worth the $38,000, but they couldn’t prove why it was overpriced. She said that the landlord made up the bills after the fact, that the justification is suspicious, and she will have to pay, but is not satisfied.
Decision: To deny the appeal (4-1).
2000 Block of Pine Street
The landlord filed a petition for a determination of the lawful rent, and the tenant filed a petition alleging an unlawful rent increase. The landlord’s petition was denied, and the tenant’s petition was granted. The landlord was found liable to the tenant for rent overpayments in the amount of $7,724.00, and the tenant’s current lawful base rent was determined to be $1,836.30 per month. The landlord appeals, arguing that the ALJ failed to consider that the tenant had not had her rent increased since July 2002, and asks the ALJ to order the tenant to continue paying $2,053.00 until her new rent becomes effective in July 2018.
The landlord told the Board that he accepted the decision of the Administrative Law Judge (ALJ) insofar as the corrected base rent, but wanted to appeal the overpayment. He said that the 2015-2017 overpayment is calculated by the difference of what the tenant has been paying against the base rent that was determined to be valid as of July 2002, but the fact that the tenant had not had a rent increase for more than 15 years was never taken into consideration. He said that if the allowable rent increases were applied during those years, the base rent would be much higher than the $1,836 used to calculate the overpayment, and that the base rent for those years would range from $2,100 to over $2,200. He said that rather than having overpaid, the tenant enjoyed substantial savings during that time, and that he didn’t raise the rent due to his friendship with the tenant and his empathy with her losing her long-time job and her husband being gravely ill. He asked the Board to consider fairness to parties, hardship, and promotion of the policies of the Ordinance.
He said that his appeal is specifically about the amount that is being ordered to pay back to the tenant. He said he felt that when the Board was voting on his appeal, they were discussing the entire decision, which he thinks is wrong.
Decision: To deny the appeal (5-0).
400 Block of Ninth Street
The tenants’ petition alleging an unlawful rent increase was denied. The ALJ found that the original occupant no longer permanently resided in the subject unit at the time the landlord served the notice of rent increase on November 8, 2017 and that the subsequent occupant was a lawful subtenant who did not reside in the unit prior to January 1, 1996. The ALJ determined that the rent increase from $1,089.79 to $1,950.00 on February 1, 2018 was therefore authorized by Civil Code Section 1954.53(d)(2) of the Costa-Hawkins Rental Housing Act. The subsequent occupant appealed, arguing that he was a co-tenant and not a subtenant at the time the notice was served, because he tendered money orders to the landlord, and because the landlord allowed him to use a storage unit.
The subsequent occupant appealed and said he’s been a tenant in the unit for two years—he moved in during the previous landlord’s tenure—and he was waiting for a new lease when the new owners took over. He said that he should have been considered a co-tenant, not a subtenant, and would like the Board to reconsider.
A neighbor spoke on behalf of the subsequent occupant and said that according to Rules and Regulations Section 6.14(c), he met all three conditions regarding the prior landlord, as there was consent, it was transparent, and she knew he was there. The neighbor said that the prior landlord waived the right after 90 days for a rent increase. He said that one doesn’t need a lease, as a lot of neighbors at the property don’t have formal leases.
Decision: To deny the appeal (4-1).
1100 Block of Beacon Street
The landlord’s petition seeking a determination of whether the Rent Board has jurisdiction over the amount of rent charged for the subject unit was granted. The ALJ determined that the subject property is exempt from the rent control provisions of the Ordinance under Civil Code Section 1954.52(a)(3)(A) as a single-family residence separately alienable from the title to any other dwelling unit. The tenants appealed, stating that they arrived late to the hearing and were unable to enter the hearing room, and that the Planning Department’s dwelling unit removal application completed by the landlord was deceiving because it created the appearance that the unit remaining after removal would be a rent controlled unit.
On May 8, 2018, the Board voted to accept the appeal and remand the case for a new hearing. The remand decision granted the landlord’s petition. The ALJ found that the landlord met her burden of proving that the illegal lower unit of the subject property that was previously separately occupied is no longer intended for residential use as a separate unit; and that as of August 28, 2017 when the Certificate of Final Completion and Occupancy (CFCO) was issued, the Rent Board does not have jurisdiction over the amount of rent charged for the subject unit under Civil Code Section 1954.52(a)(3)(A) of the Costa-Hawkins Rental Housing Act because it is a single-family residence separately alienable from the title to any other dwelling unit. On appeal of the remand decision, the tenants contend that the landlord has illegally obtained a permit to convert the two-unit property into a one-unit property.
One of the tenants submitted a written statement for the Commissioners. She stated that the landlord illegally obtained the permit to convert the two-unit property to a single family dwelling, because the Planning Department application contained false information. The tenant said that the landlord has two properties with increasing value, and that the landlord claimed that she was a single mother and low-income, when she has two expensive vehicles and receives child support from her ex-husband who works at Sun Microsystems as an engineer.
Decision: To deny the appeal (5-0)
100 Block of Alpine Terrace
The tenant’s petition alleging an unlawful rent increase and decreased housing services was granted in part and denied in part. The landlord was found liable to the tenant for rent reductions due to a loss of storage space and denial of the request to add an additional occupant in the total amount of $20,277.33, and for rent overpayments in the amount of $2,021.08, with an ongoing base rent reduction of $300.00 for loss of storage space. The landlord appealed, arguing that the lease signed by the parties did not provide the tenant a right to a storage unit; that the wrong rent calculation was made for the rent overpayment; and that the calculation for the denial of the request to add an additional roommate was incorrect. On February 13, 2018, the Board voted to accept the appeal and remand the case to the ALJ to consider the new evidence on appeal regarding the rent overpayments and to clarify or correct how the storage space rent reduction was calculated. In the remand decision, the ALJ reduced the amount of rent overpayments to $1,725.08 and reduced the monthly rent reduction for loss of storage from $300.00 to $206.33, which equaled one-third of the cost of a storage space at a nearby Public Storage facility. On appeal, the tenant argues that the monthly rent reduction for loss of storage should be calculated as 100% of the cost of a comparable storage facility, not one-third, since the other two units at the property did not use the basement or garage for storage.
The landlord said that she did some research on her own because the tenant has been lying about everything. She stated that in the end she will respect the Board’s decision, but if they don’t open this case, they will be letting the tenant walk away with big lies. She stated that she has called storage facilities and the amount quoted is not even close to the amount the Rent Board has granted.
Decision: To deny the appeal (5-0)
To learn more about the San Francisco Rent Board, call 415-252-4602 or go to sfrb.org.
The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem.