Rent Board Redux

Regrettable Renovations

written by The San Francisco Rent Board

During renovations, landlords should compensate tenants for deceases in services and loss of quiet enjoyment.

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 recent commission meetings. For full rent board agendas and minutes, please visit sfrb.org.

900 Block of Chestnut Street
One tenant in the building told the Board that the basis of the landlord’s appeal is disingenuous. The landlords argue that they are performing reasonable and necessary repairs, and that the work is being performed in a timely manner and does not interfere with the tenants’ full use of housing services, nor their right to occupy the premises. This tenant said that these are not repairs and maintenance for the tenants’ benefit, nor is it done in a reasonable timeframe, and they are instead remodeling units as they become available, turning 1-bedrooms into 2, and studios into 1-bedrooms, in an effort to increase the rent of those units and increase the value of the property. In the process they are causing damage to adjacent units that will need subsequent repair. She said that the remodel of one unit began in November 2018 and is still under construction; the wording on the permit does not mention removal of the working fireplace and wall and removal of the chimney stacks, which has caused bricks, soot and ash to come crashing through into her unit. She said that there are numerous cracks in every room and water damage as a result of that work. Two units were breached when workers broke through their ceilings, and at times the entire apartment shook from the demolition; there is plaster dust everywhere, walls and ceilings are damaged in common areas and the carpet is filthy. She said she has had to work remotely, and quiet enjoyment has been breached.

Another tenant in the building said that the landlord cites the work as having a benefit to the tenants, but that the work being done on the unit above is a complete overhaul with the sole purpose of maximizing its value, with no tangible benefit to the tenants below. She said that the landlord cited Golden Gateway as a corollary to their situation, but here, the current construction has nothing to do with her benefits; they have broken through the ceiling of her closet, knocked out lights in ceiling; and there are several visible and continually growing cracks; and they will need to request the work being re-worked. She said that they are in constant fear of the ceiling being breached or some other incident, and there is no end to construction that has been going on for over a year. They are not just mild annoyances and inconveniences over an unreasonable amount of time, but a continual invasion of space and privacy.

A 43-year resident of the building said that the current demolition is interminable; the workers are using a single elevator to dispose of 34 clay chimney surrounds, breaking the elevator down; the demolition far exceeds what’s listed in DBI’s permits; they’ve used no elevator pads; doors to the front lobby and both garages are continually propped open; open access renders her insurance policies null and void. She said that she fears what stranger she will encounter in the hallway. She said that in 2010 there was a murder in the building when someone who did not have access gave access.

The tenants’ petitions alleging decreased housing services due to a loss of quiet enjoyment and for the loss of their wood-burning fireplaces were granted. The Administrative Law Judge found the landlord liable to one tenant for rent reductions in the amount of $1,746.00 with an ongoing rent reduction of $180.00 until the service is restored. The ALJ found the landlord liable to the tenants in another unit for rent reductions in the amount of $1,300.00 with an ongoing rent reduction of $100.00 until the service is restored. On appeal of the loss of quiet enjoyment claim, the landlord argues that the overpayments are barred by the decision in Golden Gateway.

Decision: MSF: To accept the appeal and remand the case to the ALJ to comply with the decision in Golden Gateway with regards to the construction and decreased housing services (2-3). MSC: To deny the appeals (3-2).

700 Block of Arguello Avenue
The attorney for the landlord told the Board that the ALJ found that the tenant permanently resided in Nevada when a rent-increase notice was served. He’d moved there, registered to vote in Nevada, and did not pay taxes to the Franchise Tax Board for years, which is perfectly consistent with his establishing domicile in Nevada and becoming a non-resident in California. He said that there is nothing wrong with his reliance on the benefits of Nevada tax law, but he can’t have it both ways; he didn’t pay taxes in California because he was not domiciled here. The landlord attorney argued his statement on appeal should be disregarded; there was no opportunity to cross-examine; “permanently resides” should mean domiciled—either the tenant only resided in Nevada or he only permanently resided in California. He asked that the Board reverse the ALJ’s decision.

The tenant said that a claim that he intended to move to Nevada to avoid and evade his taxes is false. The tenant said that he went to Nevada to help his wife, from whom he is now separated, and with whom he now has joint custody of his 18-month old daughter, establish herself. He said that the rent increase is retaliatory because he’d reported lead. He said that he works in nonprofit education, and can’t afford rent elsewhere, and it was never his intention to evade taxes.

The tenant’s petition alleging an unlawful rent increase under the Costa-Hawkins Rental Housing Act was granted. The ALJ found that the landlord did not meet the burden of proving that the tenant petitioner no longer continued to permanently reside in the subject unit at the time the notice of rent increase was served, and that the rent increase from $3,540.00 to $5,500.00, effective June 1, 2019, was therefore not authorized by Civil Code Section 1954.53(d)(2).

On appeal, the landlord argues that Costa-Hawkins does not allow an individual to simultaneously permanently reside in two separate rental units in two separate states, and that the tenant petition cannot be a resident of California because no tax returns were filed in California in 2017 or 2018

Decision: To deny the appeal (3-2)

1300 Block of 17th Avenue
The tenants’ petition alleging an unlawful rent increase under the Costa-Hawkins Rental Housing Act and decreased housing services was granted in part and denied in part. The Administrative Law Judge found that the original occupant no longer permanently resided at the subject unit when the notice of rent increase was served, and that the lawful sublessee did not reside in the unit prior to January 1, 1996. The ALJ found that the landlord is entitled to impose an unlimited rent increase pursuant to Civil Code Section 1954.53(d)(2) of Costa-Hawkins.

The ALJ found the landlord liable to the original occupant in the amount of $120.00 for lack of heat for the period of December 24, 2018 through March 6, 2019. The ALJ also found that the original occupant did not meet his burden of proving that the change back to the original lockset, nor the garage door opener replacement in 2005 or 2006 gave rise to a loss of quiet enjoyment that rose to the level of a substantial decrease in housing services. On appeal, the tenants contend that the original occupant continues to permanently reside in the subject unit.

The attorney for the tenants told the Board that during the hearing, the landlord introduced a video of the front door of the building. He said that the landlord had witness-tenants testify that the original occupant was never at the building, when in fact the video did show him at the building, so the witness testimony should be disregarded. The attorney for the tenants said that the video raised the issue as to whether there was another entrance that the original occupant used; and that he said he used the back door, as it was easier for him to access the bus stop that way. The attorney requested that the Board remand the case back to the ALJ, to allow the parties to issue a subpoena and “find out the truth.”

Decision: MSF: To accept the appeal (2-3). MSC: To deny the appeal (3-2).

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.