Feature

The Tenant in Occupancy Rule

by Merrie Turner Lightner

The San Francisco Apartment Association is pleased to announce that on Tuesday, June 5, 2001, the Rent Board, on a 3-2 vote (Marshall and Becker dissenting), passed the new “Tenant in Occupancy” rule. The new rule adds Section 1.21 to the definition section of the Rent Board Rules and Regulations and defines the term “tenant in occupancy.”

This new definition will plug a long-standing loophole in the ordinance. For years, wealthy individuals who have multiple homes have enjoyed the subsidy of a rent-controlled apartment. Often these people used their San Francisco apartment or pied-a-tier only occasionally, if at all. Many used it as a vacation home and loaned it out to friends and business colleagues as an alternative to an expensive hotel. Because there was no requirement to actually reside in the unit, there was no reason to give it up. It was just too good of a “deal.” Now that practice will change, as individuals who do not reside in the apartment will no longer be afforded the benefits of rent control. While they will continue to have the protections of eviction control, their rent will no longer be controlled.

The ordinance limits the protection of rent controls to tenants in occupancy. The new rule defines that important term. Patterned after the rules for owner occupancy, the tenant in occupancy rule requires that a tenant maintain the unit as their principle place of residence and that it be the place to which they normally return each day. The rule provides a list of examples that indicate the unit is a primary residence. The list is not exhaustive and other evidence will be accepted. The rule does not require that the tenant always be present in the unit. Naturally the rule allows for periods of absence due to vacation, hospitalization, family emergency, business or education travel, or other reasonable periods of temporary absence.

In order to impose an increase due to a belief that the tenant does not maintain the unit as their principle place of residence, the owner must file a petition with the Rent Board. A hearing will be conducted where the landlord must present evidence that the unit is not the tenant’s primary residence. Mere speculation will not meet the burden of proof required. The tenant will be obligated to refute the evidence as presented by the landlord. Thereafter, a decision will be issued.

As is the case with other landlord petitions, the petition must be filed prior to the time the increase is noticed. After the petition is filed, a notice of increase may be served on the tenant. The tenant is under no obligation to pay the increase, until the increase has been approved by the Rent Board. The new rule is effective immediately.

Thank you to all of the SFAA members who testified at the public hearing in favor of the rule.