SF Apartment : February 2017
RENT BOARD REDUX
Double Dwellers
by The San Francisco Rent Board
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 August 2016 through November 2016 commission meetings. For full rent board agendas and minutes, please visit sfrb.org.
900 Block of Bay Street
The landlord appeals the decision denying the landlord’s petition under Rules and Regulations Section 1.21, Rules and Regulations Section 6.14, Ordinance Section 37.3(d), and the Costa-Hawkins Rental Housing Act. In the decision, the ALJ found that the landlord failed to meet its burden of proving that there was no tenant in occupancy or that original occupant M. Mitchell no longer resided at the subject unit, and had vacated the subject unit at the time the landlord filed the petition. The landlord appeals, arguing that the subject unit is not the tenant M. Mitchell’s principal or permanent place of residence; that the ALJ erred in stating that D. Mitchell was a tenant in occupancy on the petition filing date; that the ALJ should have given greater weight to expert testimony and reports by an investigator; and that the landlord proved that M. Mitchell lived at a different location.
Decision: To deny the appeal, 3-2.
600 Block of 29th Street
The landlord filed a petition requesting a determination that the two units at the subject property are exempt from the rent control provisions of the Rent Ordinance. The landlord’s petition was denied on the grounds that the subject property was two units and not a single-family dwelling on the January 1, 1996 effective date of the Costa-Hawkins Rental Housing Act, and neither unit was “newly constructed” after the effective date of the Rent Ordinance since both units included portions of the existing residential unit. On appeal, the landlord argues that both units are exempt under Proposition I, which repealed the exemption for rent control for owner-occupied units of four units or less, and also were newly constructed exempt units when the CFCO was issued on November 15, 1995.
Decision: To deny the appeal, 3-2.
1900 Block of Broadway Street
The landlord’s petition seeking a 7% rent increase based on increased operating and maintenance expenses to the tenants in 18 units was granted in part and denied in part. The ALJ found that the additional funding to pay off an existing loan would not be considered under Rules and Regulations Section 6.10(g), since the proceeds of refinancing the property in excess of the existing mortgage were not reinvested in the building for the purposes of needed repairs and maintenance or capital improvements.
On appeal, the landlord argues that the ALJ erred in characterizing the additional debt service as a settlement of the estate rather than an agreement and general release to redistribute equity shares of the limited partnership’s members; that refinancing was the only legally viable method of achieving the members’ equity division without selling the property; that such equalizing payments are ordinary and customary; and that certain members’ net equity valuations remained the same after refinancing.
Decision: To deny the appeal, 5-0.
3000 Block of Cesar Chavez Street
Tenants of multiple units at the subject property filed petitions alleging unlawful rent increases beyond the allowable limit, and requested a determination of whether the Rent Board had jurisdiction over the subject tenancies. The request was granted, and it was determined that all four units are subject to the jurisdiction of the Rent Ordinance.
The ALJ found that the landlord did not establish that there had been no residential tenancy in the building of any kind between June 13, 1979 and the date of issuance of the Certificate of Occupancy (CFCO) and therefore did not meet their burden of proving that the subject units were exempt from the Rent Ordinance.
On appeal, the landlord argues that: the ALJ failed to consider the principle of stare decisis, that Rules and Regulations Section 1.17(e) has been established as controlling, that the requirements of Rules and Regulations Section 1.17(g) should be found to be met, and that the doctrine of equitable estoppel bars the denial of the validity of the prior decisions and the belated attempt to apply regulation. The case was considered by the Board at the August 16, 2016 meeting and continued to allow the parties to submit any additional evidence on whether there had been residential use of the property between June 13, 1979 and the September 27, 1979 date of issuance of the CFCO.
Decision: To deny the landlord’s appeal on the issue of jurisdiction and to remand the tenants’ unlawful rent increase claims for the ALJ to determine the tenants’ lawful rents and the amount of any overpayments, and to consider the landlord’s financial hardship claim, 4-1.
1200 Block of Broadway Street
The tenant’s petition alleging decreased housing services was granted. The ALJ found the landlord liable to the tenant in the amount of $6,850.00 for a hole in the bathroom ceiling, a broken hallway light, inoperable exterior entrance lights, openings in the hallway wall with exposed wiring, kitchen ceilings and walls with cracked and bubbling paint, scalding hot water temperature, exposed electrical wires in the child’s bedroom closet, an improperly functioning window, and mold and mildew between the bathtub and tile.
On appeal, the landlord argues that the bathroom ceiling, wall plumbing access openings, bathroom tile, and windows were repaired and there had been no problem with them after the building was painted, that the scalding hot water temperature and earthquake strapping on the water heater were corrected, the hallway wall and ceiling are scheduled to be repaired, that the kitchen ceiling and wall corner leak was never reported, and that the moldy area in the bathroom just needed to be cleaned.
Decision: To deny the appeal, 5-0.
500 Block of Eddy Street
The landlords’ petition seeking a 7% rent increase based on increased operating expenses to the tenants in 29 units was granted. The tenant in one unit appealed, arguing that the landlords’ petition was flawed and questionable, that it had wildly changing figures, deceptive or exaggerated expenses, questionable services, and that the property managers had inappropriate business practices. The Board voted to accept the appeal of the tenant and remand the case to consider the tenant’s claims on appeal regarding the discrepancies between the expense amounts claimed in the petition and those found in the decision. On remand, the ALJ found that discrepancies between the expense amounts claimed in the petition and those found in the decision were primarily due to mathematical errors in the petition amounts claimed, and granted the petition. On appeal of the remand decision, the tenant argues that it is inappropriate to substitute new figures at a hearing that are different from those initially filed with the petition, that remand of cases following appeals should be referred to different administrative law judges, that there are still wildly changing figures, and that the petition should be dismissed.
Decision: To deny the appeal, 4-1.
700 Block of Union Street
The landlord’s petition for an extension of time to complete capital improvement work was denied on the grounds that the landlord failed to file the petition immediately after it was apparent that the work would take longer than three months; and was denied on the grounds that the landlord’s estimated date to complete the work was not reasonable. On appeal, the landlord argues that the standard for filing “immediately” is vague and arbitrary and that, according to Rules and Regulations Section 12.15(e), the ALJ failed to determine what would be a reasonable time to complete the work.
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.