Rent Board Redux
If a single-family home has an unpermitted and unrented in-law unit, is it then considered a rent-controlled duplex?
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.
100 Block of Madison Street
The tenants’ petition alleging an unlawful rent increase was granted. The ALJ found that notwithstanding the legal use of the property as a single-family residence, the actual use of the property established that the downstairs and upstairs units are separate dwelling units, and the upstairs unit is therefore not separately alienable from the title to any other dwelling unit; and found the landlord liable to the tenants in the amount of $14,135.80 for rent overpayments resulting from null and void rent increases for the period from February 1, 2017 through January 31, 2020.
The landlord appeals, arguing that the tenants failed to prove that the property is a two-unit property; that the tenants did not have standing to file the instant petition because they moved out; that the tenant petitioners named the incorrect landlord; and that the overpayment amount is excessive because the rent was shared between multiple tenant occupants.
The attorney for the landlord told the Board that the tenant petitioners voluntarily terminated the tenancy and vacated prior to filing the petition, so they were not “tenants” as defined by the Rent Ordinance and do not have standing to file the petition and forfeited their right to file a petition at the Rent Board when they vacated. He said that two of the three tenants of the co-tenancy filed the petition and argued that the overpayment being granted to only two of the three tenants was improper. He said that the property should not have been considered two units, as the other space in the building had never been rented.
The landlord told the Board that the tenant petitioners voluntarily terminated their tenancy prior to the filing of the petition, so they are not tenants as defined by the Ordinance; and did not have standing to file the petition. The landlord said that the ALJ stated in their memo that this is a newly raised issue, but it was brought up at the May hearing; and regarding the amount of rent owed, the tenants did not pay the full amount of rent and the order for the tenant petitioners to distribute the overpayment accordingly doesn’t prevent other co-tenants from bringing a similar action, resulting in the landlord being liable for duplicate overpayments. She asked the Board to reconsider the decision.
Decision: MSC: To deny the appeal (5-0).
4000 Block of Cesar Chavez Street
The tenant’s petition alleging a substantial decrease in housing services and failure to repair and maintain was granted. The ALJ found the landlords liable to the tenant in the amount of $4,070 for a reduction in the usable size of a back yard due to safety fencing erected near the retaining wall for the period of October 14, 2018 to April 30, 2020, and found that the landlord failed to perform requested repairs required by law.
On appeal, the landlords argue that a temporary interference by a landlord while undertaking to perform reasonably necessary repairs and that restricting access to 9% of the backyard does not constitute a substantial decrease in housing services; that the tenants delayed repair of the retaining wall in order to benefit from the use of the backyard; that ordering a rent reduction is a violation of the landlords’ constitutional rights; and that the rent reduction calculation and the ALJ’s finding that the requested repairs were required by law were an abuse of discretion by the ALJ.
The tenant said that the landlords’ appeal should be denied as untimely and the landlords’ written reasons for the appeal were inaccurate, as one of the landlords is a lawyer and has extensive knowledge of the law. He said that even if there was a misunderstanding on the landlords’ part, they should have filed the appeal in a timely manner. He said that the decision and hearing were fair and that the parties had the time to present their case and the facts. He said that the landlords offer no new evidence nor facts, and just restate the case already made, and don’t offer proof of a procedural error, nor evidence of an abuse of discretion. He urged the Board to deny the appeal and to uphold the decision.
One of the landlords told the Board that this case is about the neighbor’s parking lot curb falling into their yard, and over the last year they have taken every possible action to work with their neighbors to rectify their situation, and that every engineer who has visited the property has determined that the backyard is safe to use. She said that the safety fence, erected to protect the tenants, blocks less than 10% of the yard, is about three feet wide, and runs along the retaining wall. She said that this case falls squarely under the Golden Gateway case, which held that a landlord who performed reasonably necessary repairs that had the effect of temporarily interfering with a tenant’s full use of housing doesn’t effectuate a decrease in housing services. She said that the safety fence is a temporary measure to ensure the tenants’ safety until a long-term repair can be made to the curb. In addition, she said, she doesn’t feel 9% of the backyard can be a substantial decrease, and she says that she attached photos that the usable size of the yard remains the same, that the safety fence only obscures a portion of the western garden bed, that the entire garden bed plants have been preserved, and that areas for socializing and barbecue are still fully accessible, and that they were acting in the best interests of the tenants in erecting a safety fence.
The landlord said that she understands that the Commission has voted to remand the case, and wanted to note that the ALJ’s reduction of $220.00 a month for 9% of shared backyard space results in an illogical rental value of $2,400.00 a month for a backyard shared between three units, and respectfully requests reconsideration, and would note that in the record there was an email from a structural engineer that said the backyard was safe to use, and there was no reason for the rent reduction to go beyond the 9% of the backyard.
The tenant stated that the backyard retaining wall was found by the surveyor to be on his landlord’s property and was deemed by the building inspector to be a dangerous situation, which they lived with for two years with the good faith idea that the landlord would do something about the repairs. He said that there were occasions where large pieces of concrete weighing hundreds of pounds fell down while they were in the backyard and they have felt uncomfortable using the backyard since. He said that the ALJ ruled on a 5% reduction in rent, based on the fact that they would not have rented the apartment but for the backyard, and there was a substantial reduction in services based on the condition in which the landlord left the wall for more than two years.
Decision: To accept the appeal and remand the case to the ALJ to recalculate the rent reduction excluding the three-month delay caused by the tenants (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.