San Francisco Rent Board News Archive: 2002

Rent Board Budget Hearing June 19, 2002 (Revised 5/30/02)

The Rent Board budget will be heard the 19^th. The meeting starts at 1 PM in the Board Chambers. Included along with the budget will be discussion of the proposed Rent Board fee of $27 to fund the costs of the operation of the department. The department is proposing to hire one additional clerk to handle new duties as a result of recent Ordinance amendments requiring the recordation of owner move in notices as well as three temporary Administrative Law Judges to help reduce a current backlog of petitions.

Two Amendments to Sup. Gonzalez's Original Rent Ord. Amendments 061302

6/13/02 GONZALEZ RECENT AMENDMENTS TO ORIGINAL TEXT

The attached substitute legislation submitted to the Clerk of the Board contains two changes:

1. The short title and the long title now reference deletion of the words "in occupancy" in two subsections; and,

2. Section 37.3(a)(2) has reverted to the word "amount" instead of the phrase "accrued dollar amount or any portion thereof."

[Rent Ordinance multiple amendments, including prohibition against severance of parking or other facilities without just cause or consent, extension of coverage to non-tourist tenancies in residential hotels, removing the phrase "in occupancy" from "Rent Increase Limitations for Tenants in Occupancy" and "Notice of Rent Increase for Tenants in Occupancy," limiting annual imposition of banked increases, requiring more specific notice for certain rent increases, prohibiting rent increases or evictions based on additional occupants within Housing Code occupancy limits, extending the statute of limitations for overpayment refunds, increasing relocation payments annually per CPI, and providing that a tenant may also pursue civil remedies for abridgement of certain rights against a landlord"s successor in interest; and Housing Code amendments to promote affordable housing.]

Ordinance amending the Residential Rent Stabilization and Arbitration Ordinance (Administrative Code Chapter 37), by amending Sections 37.2, 37.3, 37.8, 37.9, 37.9B, and 37.11A, to: clarify the definition of rental units to include units regardless of zoning or legal status; provide that parking or storage or similar facilities on the same lot may not be severed by the landlord without just cause or tenant consent, except where necessitated by serious landlord hardship or circumstances beyond the landlord"s control; extend coverage of the ordinance to non-tourist tenancies in residential hotels by eliminating the 32-day residency requirement for those tenancies; change Subsection 37.3(a) "Rent Increase Limitations for Tenants in Occupancy" and Subsection 37.3(b) "Notice of Rent Increase for Teants in Occupancy" by deleting the phrase "in occupancy" from both subsections; limit imposition of banked rent increases to 8% per year and require more specific notice; require more specific notice for rent increases authorized under California Civil Code Sections 1954.50 et seq., and require a rent arbitration hearing for certain increases not authorized by Civil Code Sections 1954.50 et seq.; prohibit rent increases or evictions solely for additional occupants, where the total number of occupants is within Housing Code occupancy limits; expand the statute of limitations from three years to five years from discovery, for refunds of rent overpayments due to null and void rent increases; clarify that all endeavors to recover possession for just cause under Section 37.9(a), must be in good faith without ulterior motive and with honest intent; require relocation expenses of $2,000 for each authorized occupant (including any minor child) who has lived in a unit for 12 months as of the time of vacation of the unit, where the unit is to be demolished or otherwise permanently removed from housing use, or where the tenant must relocate due to capital improvements or substantial rehabilitation work or an owner-move-in eviction, with one-half paid upon notice and one-half paid within 72 hours after vacation of the unit, and with these amounts to be increased annually according to the rate of increase in the "Rent of Primary Residence" expenditure category of the Consumer Price Index (CPI); provide that a tenant"s civil action against a landlord for abridgement of rights under this Chapter may also be brought against the landlord"s successor in interest; certain technical corrections to conform numbering to prior Chapter 37 amendments; and, amending San Francisco Housing Code Chapter 5, Section 503(b) to make a technical correction, and amending San Francisco Housing Code Chapter 5, Section 503(d), to clarify that the protections of that Section extend to all persons by deleting the references to "families," to clarify that the Section promotes affordable housing, and to clarify that the Section protects prospective and current tenants.

Note: Additions are single-underline italics Times New Roman font;

deletions are strikethrough italics Times New Roman font.

Board amendment additions are double underlined Arial font;

Board amendment deletions are strikethrough Arial font.

Be it ordained by the People of the City and County of San Francisco:

Section 1. The San Francisco Administrative Code is hereby amended by amending Section 37.2, to read as follows:

SEC. 37.2. DEFINITIONS.

(a) Base Rent.

(1) That rent which is charged a tenant upon initial occupancy plus any rent increase allowable and imposed under this Chapter; provided, however, that base rent shall not include increases imposed pursuant to Section 37.7 below or utility passthroughs or general obligation passthroughs pursuant to Section 37.2(q) below. Base rent for tenants of RAP rental units in areas designated on or after July 1, 1977, shall be that rent which was established pursuant to Section 32.73-1 of the San Francisco Administrative Code. Rent increases attributable to the City Administrator"s amortization of an RAP loan in an area designated on or after July 1, 1977, shall not be included in the base rent.

(2) From and after the effective date of this ordinance, the base rent for tenants occupying rental units which have received certain tenant-based or project-based rental assistance shall be as follows:

(A) With respect to tenant-based rental assistance:

(i) For any tenant receiving tenant-based assistance as of the effective date of this ordinance (except where the rent payable by the tenant is a fixed percentage of the tenant"s income, such as in the Section 8 certificate program and the rental subsidy program for the HOPWA program), and continuing to receive tenant-based rental assistance following the effective date of this ordinance, the base rent for each unit occupied by such tenant shall be the rent payable for that unit under the Housing Assistance Payments contract, as amended, between the San Francisco Housing Authority and the landlord (the "HAP contract") with respect to that unit immediately prior to the effective date of this ordinance (the "HAP" contract rent").

(ii) For any tenant receiving tenant-based rental assistance (except where the rent payable by the tenant is a fixed percentage of the tenant"s income, such as in the Section 8 certificate program and the rental subsidy program for the HOPWA program), and commencing occupancy of a rental unit following the effective date of this ordinance, the base rent for each unit occupied by such a tenant shall be the HAP contract rent in effect as of the date the tenant commences occupancy of such unit.

(iii) For any tenant whose tenant-based rental assistance terminates or expires, for whatever reason, following the effective date of this ordinance, the base rent for each such unit following expiration or termination shall be the HAP contract rent in effect for that unit immediately prior to the expiration or termination of the tenant-based rental assistance.

(B) For any tenant occupying a unit upon the expiration or termination, for whatever reason, of a project-based HAP contract under Section 8 of the United States Housing Act of 1937 (42 USC Section 1437f, as amended), the base rent for each such unit following expiration or termination shall be the "contract rent" in effect for that unit immediately prior to the expiration or termination of the project-based HAP contract.

(C) For any tenant occupying a unit upon the prepayment or expiration of any mortgage insured by the United States Department of Housing and Urban Development ("HUD"), including but not limited to mortgages provided under Sections 221(d)(3), 221(d)(4) and 236 of the National Housing Act (12 USC Section 1715z-1), the base rent for each such unit shall be the "basic rental charge" (described in 12 USC 1715z-1(f), or successor legislation) in effect for that unit immediately prior to the prepayment of the mortgage, which charge excludes the "interest reduction payment" attributable to that unit prior to the mortgage prepayment or expiration.

(b) Board. The Residential Rent Stabilization and Arbitration Board.

(c) Capital Improvements. Those improvements which materially add to the value of the property, appreciably prolong its useful life, or adapt it to new uses, and which may be amortized over the useful life of the improvement of the building.

(d) CPI. Consumer Price Index for all Urban Consumers for the San Francisco-Oakland Metropolitan Area, U.S. Department of Labor.

(e) Energy Conservation Measures. Work performed pursuant to the requirements of Article Chapter 12 of the San Francisco Housing Code.

(f) Administrative Law Judge. A person, designated by the Board, who arbitrates and mediates rental increase disputes, and performs other duties as required pursuant to this Chapter 37.

(g) Housing Services. Services provided by the landlord connected with the use or occupancy of a rental unit including, but not limited to: repairs; replacement; maintenance; painting; light; heat; water; elevator service; laundry facilities and privileges; janitor service; refuse removal; furnishings; telephone; parking; rights permitted the tenant by agreement, including the right to have a specific number of occupants, whether express or implied, and whether or not the agreement prohibits subletting and/or assignment; and any other benefits, privileges or facilities.

(h) Landlord. An owner, lessor, sublessor, who receives or is entitled to receive rent for the use and occupancy of any residential rental unit or portion thereof in the City and County of San Francisco, and the agent, representative or successor of any of the foregoing.

(i) Member. A member of the Residential Rent Stabilization and Arbitration Board.

(j) Over FMR Tenancy Program. A regular certificate tenancy program whereby the base rent, together with a utility allowance in an amount determined by HUD, exceeds the fair market rent limitation for a particular unit size as determined by HUD.

(k) Payment Standard. An amount determined by the San Francisco Housing Authority that is used to determine the amount of assistance paid by the San Francisco Housing Authority on behalf of a tenant under the Section 8 Voucher Program (24 CFR Part 887).

(l) RAP. Residential Rehabilitation Loan Program (Chapter 32, San Francisco Administrative Code).

(m) RAP Rental Units. Residential dwelling units subject to RAP loans pursuant to Chapter 32, San Francisco Administrative Code.

(n) Real Estate Department. A city department in the City and County of San Francisco.

(o) Rehabilitation Work. Any rehabilitation or repair work done by the landlord with regard to a rental unit, or to the common areas of the structure containing the rental unit, which work was done in order to be in compliance with State or local law, or was done to repair damage resulting from fire, earthquake or other casualty or natural disaster.

(p) Rent. The consideration, including any bonus, benefits or gratuity, demanded or received by a landlord for or in connection with the use or occupancy of a rental unit, or the assignment of a lease for such a unit, including but not limited to monies demanded or paid for parking, furnishing, food service, housing services of any kind, or subletting.

(q) Rent Increases. Any additional monies demanded or paid for rent as defined in item (p) above, or any reduction in housing services without a corresponding reduction in the monies demanded or paid for rent; provided, however, that (1) where the landlord has been paying the tenant"s utilities and cost of those utilities increase, the landlord"s passing through to the tenant of such increased costs does not constitute a rent increase; and (2) where there has been a change in the landlord"s property tax attributable to a ballot measure approved by the voters between November 1, 1996, and November 30, 1998, the landlord"s passing through of such increased costs in accordance with this Chapter does not constitute a rent increase.

(r) Rental Units. All residential dwelling units in the City and County of San Francisco regardless of zoning or legal status, together with the land and appurtenant buildings thereto, and all housing services, privileges, furnishings and facilities supplied in connection with the use or occupancy thereof, including garage and parking facilities.

Garage and parking facilities, storage spaces, access to common areas, and any other contiguous or non-contiguous physical spaces and facilities on the same lot may not be severed from the tenancy by the landlord without just cause as required by Section 37.9(a) of this Chapter, unless (A) required by law, or (B) necessitated by serious landlord hardship (such as verifiable disability or illness), or (C) due to circumstances beyond the landlord"s control (such as fire or other disaster). The landlord"s claim that such a severance, reduction or removal has been so required or necessitated by landlord hardship or circumstances beyond the landlord"s control, shall be determined at a hearing upon application by either party to the Rent Board. Upon application for hearing, any proposed decrease shall be stayed pending completion of hearing and decision before the Administrative Law Judge and the Rent Board. At such hearing the landlord shall bear the burden of proof that the severance, reduction or removal has been required,or necessitated by landlord hardship or circumstances beyond the landlord"s control. Any severance, reduction or removal permitted under this Section shall be offset by a reduction in rent based upon the current market value of that severed portion of the rental unit, except that the reduction may be less than the current market value as determined by the Administrative Law Judge or the Rent Board upon consideration of the equities of the case. Alternatively, by mutual and voluntary agreement the landlord and the tenant may sever a garage or other parking facility or other physical space or facility from the tenancy.

The term "rental units" shall not include:

(1) Housing accommodations in hotels, motels, inns, tourist houses, rooming and boarding houses, provided that at such time as an accommodation has been occupied by a tenant for 32 continuous days or more, such accommodation shall become a rental unit subject to the provisions of this Chapter; provided further, no landlord shall bring an action to recover possession of such unit in order to avoid having the unit come within the provisions of this Chapter. An eviction for a purpose not permitted under Section 37.9(a) shall be deemed to be an action to recover possession in order to avoid having a unit come within the provisions of this Chapter; . Except that, as defined in Administrative Code Chapter 41, a residential unit in a Residential hotel that is not a tourist unit is a rental unit from the date of a tenant"s initial occupancy.

(2) Dwelling units in nonprofit cooperatives owned, occupied and controlled by a majority of the residents or dwelling units solely owned by a nonprofit public benefit corporation governed by a board of directors the majority of which are residents of the dwelling units and where it is required in the corporate by-laws that rent increases be approved by a majority of the residents;

(3) Housing accommodation in any hospital, convent, monastery, extended care facility, asylum, residential care or adult day health care facility for the elderly which must be operated pursuant to a license issued by the California Department of Social Services, as required by California Health and Safety Chapters 3.2 and 3.3; or in dormitories owned and operated by an institution of higher education, a high school, or an elementary school;

(4) Except as provided in Subsections (A) and (B), dwelling units whose rents are controlled or regulated by any government unit, agency or authority, excepting those unsubsidized and/or unassisted units which are insured by the United States Department of Housing and Urban Development; provided, however, that units in unreinforced masonry buildings which have undergone seismic strengthening in accordance with Building Code Chapters 14 and 15 shall remain subject to the Rent Ordinances to the extent that the ordinance is not in conflict with the seismic strengthening bond program or with the program"s loan agreements or with any regulations promulgated thereunder;

(A) For purposes of Sections 37.2, 37.3(a)(10)(A), 37.4, 37.5, 37.6, 37.9, 37.9A, 37.10A, 37.11A and 37.13, and the arbitration provisions of Sections 37.8 and 37.8A applicable only to the provisions of Sections 37.3(a)(10)(A), the term "rental units" shall include units occupied by recipients of tenant-based rental assistance where the tenant-based rental assistance program does not establish the tenant"s share of base rent as a fixed percentage of a tenant"s income, such as in the Section 8 voucher program and the "Over- FMR Tenancy" program defined in 24 CFR Section 982.4;

(B) For purposes of Sections 37.2, 37.3(a)(10)(B), 37.4, 37.5, 37.6, 37.9, 37.9A, 37.10A, 37.11A and 37.13, the term "rental units" shall include units occupied by recipients of tenant-based rental assistance where the rent payable by the tenant under the tenant-based rental assistance program is a fixed percentage of the tenant"s income; such as in the Section 8 certificate program and the rental subsidy program for the Housing Opportunities for Persons with Aids ("HOPWA") program (42 U.S.C. Section 12901 et seq., as amended).

(5) Rental units located in a structure for which a certificate of occupancy was first issued after the effective date of this ordinance, except as provided for certain categories of units and dwellings by Section 37.3(d) and Section 37.9A(b) of this Chapter;

(6) Dwelling units in a building which has undergone substantial rehabilitation after the effective date of this ordinance; provided, however, that RAP rental units are not subject to this exemption.

(7) Dwellings or units otherwise subject to this Chapter 37, to the extent such dwellings or units are partially or wholly exempted from rent increase limitations by the Costa-Hawkins Rental Housing Act (California Civil Code Sections 1954.50. et seq.) and/or San Francisco Administrative Code Section 37.3(d).

(s) Substantial Rehabilitation. The renovation, alteration or remodeling of residential units of 50 or more years of age which have been condemned or which do not qualify for certificates of occupancy or which require substantial renovation in order to conform the building to contemporary standards for decent, safe and sanitary housing. Substantial rehabilitation may vary in degree from gutting and extensive reconstruction to extensive improvements that cure substantial deferred maintenance. Cosmetic improvements alone such as painting, decorating and minor repairs, or other work which can be performed safely without having the unit vacated do not qualify as substantial rehabilitation.

(t) Tenant. A person entitled by written or oral agreement, sub-tenancy approved by the landlord, or by sufferance, to occupy a residential dwelling unit to the exclusion of others.

(u) Tenant-Based Rental Assistance. Rental assistance provided directly to a tenant or directly to a landlord on behalf of a particular tenant, which includes but shall not be limited to certificates and vouchers issued pursuant to Section 8 of the United States Housing Act of 1937, as amended (42 U.S.C. Section 1437f) and the HOPWA program.

(v) Utilities. The term "utilities" shall refer to gas and electricity exclusively.

Section 2. The San Francisco Administrative Code is hereby amended by amending Section 37.3, to read as follows:

SEC. 37.3. RENT LIMITATIONS.

(a) Rent Increase Limitations for Tenants in Occupancy. Landlords may impose rent increases upon tenants in occupancy only as provided below and as provided by Subsection 37.3(d):

(1) Annual Rent Increase. On March 1st of each year, the Board shall publish the increase in the CPI for the preceding 12 months, as made available by the U.S. Department of Labor. A landlord may impose annually a rent increase which does not exceed a tenant"s base rent by more than 60 percent of said published increase. In no event, however, shall the allowable annual increase be greater than seven percent.

(2) Banking. A landlord who refrains from imposing an annual rent increase or any portion thereof may accumulate said increase and impose that amount on or after the tenant"s subsequent rent increase anniversary dates. A landlord who, between April 1, 1982, and February 29, 1984, has banked an annual seven percent rent increase (or rent increases) or any portion thereof may impose the accumulated increase on the tenant"s subsequent rent increase anniversary dates. However, the total of the annual increase plus the banked increase imposed in any one year may not exceed eight percent (8%) of the tenant"s base rent. The remainder may be imposed in following years, subject to this eight percent (8%) limitation.

(3) Capital Improvements, Rehabilitation, and Energy Conservation Measures. A landlord may impose rent increases based upon the cost of capital improvements, rehabilitation or energy conservation measures provided that such costs are certified pursuant to Sections 37.7 and 37.8B below; provided further that where a landlord has performed seismic strengthening in accordance with Building Code Chapters 14 and 15, no increase for capital improvements (including but not limited to seismic strengthening) shall exceed, in any 12 month period, 10 percent of the tenant"s base rent, subject to rules adopted by the Board to prevent landlord hardship and to permit landlords to continue to maintain their buildings in a decent, safe and sanitary condition. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to the 10 percent limitation. Nothing in this subsection shall be construed to supersede any Board rules or regulations with respect to limitations on increases based upon capital improvements whether performed separately or in conjunction with seismic strengthening improvements pursuant to Building Code Chapters 14 and 15.

(4) Utilities. A landlord may impose increases based upon the cost of utilities as provided in Section 37.2(q) above.

(5) Charges Related to Excess Water Use. A landlord may impose increases not to exceed 50 percent of the excess use charges (penalties) levied by the San Francisco Water Department on a building for use of water in excess of Water Department allocations under the following conditions:

(A) The landlord provides tenants with written certification that the following have been installed in all units: (1) permanently installed retrofit devices designed to reduce the amount of water used per flush or low-flow toilets (1.6 gallons per flush); (2) low-flow showerheads which allow a flow of no more than 2.5 gallons per minute; and (3) faucet aerators (where installation on current faucets is physically feasible); and

(B) The landlord provides the tenants with written certification that no known plumbing leaks currently exist in the building and that any leaks reported by tenants in the future will be promptly repaired; and

(C) The landlord provides the tenants with a copy of the water bill for the period in which the penalty was charged. Only penalties billed for a service period which begins after the effective date of the ordinance [April 20, 1991] may be passed through to tenants. Where penalties result from an allocation which does not reflect documented changes in occupancy which occurred after March 1, 1991, a landlord must, if requested in writing by a tenant, make a good-faith effort to appeal the allotment. Increases based upon penalties shall be prorated on a per-room basis provided that the tenancy existed during the time the penalty charges accrued. Such charges shall not become part of a tenant"s base rent. Where a penalty in any given billing period reflects a 25 percent or more increase in consumption over the prior billing period, and where that increase does not appear to result from increased occupancy or any other known use, a landlord may not impose any increase based upon such penalty unless inspection by a licensed plumber or Water Department inspector fails to reveal a plumbing or other leak. If the inspection does reveal a leak, no increase based upon penalties may be imposed at any time for the period of the unrepaired leak.

(6) Property Tax. A landlord may impose increases based upon a change in the landlord"s property tax resulting from the repayment of general obligation bonds of the City and County of San Francisco approved by the voters between November 1, 1996, and November 30, 1998 as provided in Section 37.2(q) above. Any rent increase for bonds approved after the effective date of this initiative ordinance must be disclosed and approved by the voters. The amount of such increase shall be determined for each tax year as follows:

(A) The Controller and the Board of Supervisors will determine the percentage of the property tax rate, if any, in each tax year attributable to general obligation bonds approved by the voters between November 1, 1996, and November 30, 1998, and repayable within such tax year.

(B) This percentage shall be multiplied by the total amount of the net taxable value for the applicable tax year. The result is the dollar amount of property taxes for that tax year for a particular property attributable to the repayment of general obligation bonds approved by the voters between November 1, 1996, and November 30, 1998.

(C) The dollar amount calculated under Subsection (B) shall be divided by the total number of all units in each property, including commercial units. That figure shall be divided by 12 months, to determine the monthly per unit costs for that tax year of the repayment of general obligation bonds approved by the voters between November 1, 1996, and November 30, 1998.

(D) Landlords may pass through to each unit in a particular property the dollar amount calculated under this Subsection (6). This passthrough may be imposed only on the anniversary date of each tenant"s occupancy of the property. This passthrough shall not become a part of a tenant"s base rent. The amount of each annual passthrough imposed pursuant to this Subsection (6) may vary from year-to-year, depending on the amount calculated under Subsections (A) through (C). Each annual passthrough shall apply only for the 12 month period after it is imposed. A landlord may impose the passthrough described in this Subsection (6) for a particular tax year only with respect to those tenants who were residents of a particular property on November 1st of the applicable tax year. A landlord shall not impose a passthrough pursuant to this Subsection (6) if the landlord has filed for or received Board approval for a rent increase under Section 37.8(e)(4) for increased operating and maintenance expenses in which the same increase in property taxes due to the repayment of general obligation bonds was included in the comparison year cost totals.

(E) The Board will have available a form which explains how to calculate the passthrough.

(F) Landlords must provide to tenants, at least 30 days prior to the imposition of the passthrough permitted under this Subsection (6), a copy of the completed form described in Subsection (E). This completed form shall be provided in addition to the Notice of Rent Increase required under Section 37.3(b)(5). A tenants may petition for a hearing under the procedure described in Section 37.8 where the tenant alleges that a landlord has imposed a charge which exceeds the limitations set forth in this Subsection (6). In such a hearing, the burden of proof shall be on the landlord. Tenant petitions regarding this passthrough must be filed within one year of the effective date of the passthrough.

(G) The Board may amend its rules and regulations as necessary to implement this Subsection (6).

(7) RAP Loans. A landlord may impose rent increases attributable to the City Administrator"s amortization of the RAP loan in an area designated on or after July 1, 1977, pursuant to Chapter 32 of the San Francisco Administrative Code.

(8) Additional Increases. A landlord who seeks to impose any rent increase which exceeds those permitted above shall petition for a rental arbitration hearing pursuant to Section 37.8 of this Chapter; provided further that a landlord who seeks to impose any rent increase based upon the Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50 et seq, "Costa-Hawkins"), Section 37.3(d) of this Chapter, or any Rent Board Rules and Regulations intended to implement Subsection 37.3(d), shall serve notice on the affected tenant(s) on a form developed for this purpose by the Rent Board, and file the notice with a proof of service signed under penalty of perjury with the Rent Board: the form shall include notice that Costa-Hawkins applies, a statement that there is no disqualifying 30-day eviction notice or unsatisfied 90-day code violation, and information explaining that a tenant may file a petition for hearing on the proposed increase under Section 37.8. Provided further that where the rent increase is not authorized under the Costa-Hawkins Act, a landlord who has given timely notice to a subtenant or subtenants that a new tenancy is created once the last original tenant no longer permanently resides in the unit, and seeks to impose a rent increase based on the departure of the last original tenant on the lease, shall first petition for a rent arbitration hearing pursuant to Section 37.8 of this Chapter.

(9) A landlord may impose a rent increase to recover costs incurred for the remediation of lead hazards, as defined in San Francisco Health Code Article 26. Such increases may be based on changes in operating and maintenance expenses or for capital improvement expenditures as long as the costs which are the basis of the rent increase are a substantial portion of the work which abates or remediates a lead hazard, as defined in San Francisco Health Code Article 26, and provided further that such costs are approved for operating and maintenance expense increases pursuant to Section 37.8(e)(4)(A) and certified as capital improvements pursuant to Section 37.7 below.

When rent increases are authorized by this Subsection 37.3(a)(9), the total rent increase for both operating and maintenance expenses and capital improvements shall not exceed 10 percent in any 12 month period. If allowable rent increases due to the costs of lead remediation and abatement work exceed 10 percent in any 12 month period, an Administrative Law Judge shall apply a portion of such excess to approved operating and maintenance expenses for lead remediation work, and the balance, if any, to certified capital improvements, provided, however, that such increase shall not exceed 10 percent. A landlord may accumulate any approved or certified increase which exceeds this amount, subject to the 10 percent limit.

(10) With respect to units occupied by recipients of tenant-based rental assistance:

(A) If the tenant"s share of the base rent is not calculated as a fixed percentage of the tenant"s income, such as in the Section 8 voucher program and the Over-FMR Tenancy Program, then:

(i) If the base rent is equal to or greater than the payment standard, the rent increase limitations in Sections 37.3(a)(1) and (2) shall apply to the entire base rent, and the arbitration procedures for those increases set forth in Section 37.8 and 37.8A shall apply.

(ii) If the base rent is less than the payment standard, the rent increase limitations of this Chapter shall not apply; provided, however, that any rent increase which would result in the base rent being equal to or greater than the payment standard shall not result in a new base rent that exceeds the payment standard plus the increase allowable under Section 37.3(a)(1).

(B) If the tenant"s share of the base rent is calculated as a fixed percentage of the tenant"s income, such as in the Section 8 certificate program and the rental subsidy program for the HOPWA program, the rent increase limitations in Section 37.3(a)(1) and (2) shall not apply. In such circumstances, adjustments in rent shall be made solely according to the requirements of the tenant-based rental assistance program.

(11) No extra rent may be charged solely for an additional occupant to an existing tenancy (including, but not limited to, a newborn child or family member as defined by Section 401 of the Housing Code), notwithstanding a rental agreement or lease that specifically permits a rent increase for additional tenants, so long as one or more of the occupants of the unit pursuant to the agreement with the owner remains an occupant in lawful possession of the unit, or so long as a lawful sublessee or assignee who resided in the unit prior to January 1, 1996 remains in possession of the unit. Such "extra rent" provisions in written or oral rental agreements or leases are deemed to be contrary to public policy.

(b) Notice of Rent Increase for Tenants in Occupancy. On or before the date upon which a landlord gives a tenant legal notice of a rent increase, the landlord shall inform the tenant, in writing, of the following:

(1) Which portion of the rent increase reflects the annual increase, and/or a banked amount, if any; provided further, that in order to impose a banked rent increase the landlord shall inform the tenant in writing, on or before the date upon which the landlord gives the tenant legal notice of a banked rent increase, the dates upon which said banked increase is based. The landlord shall bear the burden of producing evidence that the landlord is entitled to any banked rent increase(s);

(2) Which portion of the rent increase reflects costs for increased operating and maintenance expenses, rents for comparable units, and/or capital improvements, rehabilitation, or energy conservation measures certified pursuant to Section 37.7. Any rent increase certified due to increases in operating and maintenance costs shall not exceed seven percent;

(3) Which portion of the rent increase reflects the passthrough of charges for gas and electricity, or bond measure costs described in Section 37.3(a)(6) above, which charges shall be explained in writing on a form provided by the Board as described in Section 37.3(a)(6)(E);

(4) Which portion of the rent increase reflects the amortization of the RAP loan, as described in Section 37.3(a)(7) above.

(5) Nonconforming Rent Increases. Any rent increase which does not conform with the provisions of this Section shall be null and void.

(6) With respect to rental units occupied by recipients of tenant-based rental assistance, the notice requirements of this Subsection (b) shall be required in addition to any notice required as part of the tenant-based rental assistance program.

(c) Initial Rent Limitation for Subtenants. A tenant who subleases his or her rental unit may charge no more rent upon initial occupancy of the subtenant or subtenants than that rent which the tenant is currently paying to the landlord.

(d) Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50. et seq.) Consistent with the Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50. et seq.) and regardless of whether otherwise provided under Chapter 37:

(1) Property Owner Rights to Establish Initial and All Subsequent Rental Rates for Separately Alienable Parcels.

(A) An owner or residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit which is alienable separate from the title to any other dwelling unit or is a subdivided interest in a subdivision as specified in subdivision (b), (d), or (f) of Section 11004.5 of the California Business and Professions Code. The owner"s right to establish subsequent rental rates under this paragraph shall not apply to a dwelling or unit where the preceding tenancy has been terminated by the owner by notice pursuant to California Civil Code Section 1946 or has been terminated upon a change in the terms of the tenancy noticed pursuant to California Civil Code Section 827; in such instances, the rent increase limitation provisions of Chapter 37 shall continue to apply for the duration of the new tenancy in that dwelling or unit.

(B) Where the initial or subsequent rental rates of a Subsection 37.3(d)(1)(A) dwelling or unit were controlled by the provisions of Chapter 37 on January 1, 1995, the following shall apply:

(i) A tenancy that was in effect on December 31, 1995, remains subject to the rent control provisions of this Chapter 37, and the owner may not otherwise establish the subsequent rental rates for that tenancy.

(ii) On or after January 1, 1999, an owner may establish the initial and all subsequent rental rates for any tenancy created on or after January 1, 1996.

(C) An owner"s right to establish subsequent rental rates under Subsection 37.3(d)(1) shall not apply to a dwelling or unit which contains serious health, safety, fire or building code violations, excluding those caused by disasters, for which a citation has been issued by the appropriate governmental agency and which has remained unabated for six months or longer preceding the vacancy.

(2) Conditions for Establishing the Initial Rental Rate Upon Sublet or Assignment. Except as identified in this Subsection 37.3(d)(2), nothing in this Subsection or any other provision of law of the City and County of San Francisco shall be construed to preclude express establishment in a lease or rental agreement of the rental rates to be applicable in the event the rental unit subject thereto is sublet, and nothing in this Subsection shall be construed to impair the obligations of contracts entered into prior to January 1, 1996, subject to the following:

(A) Where the original occupant or occupants who took possession of the dwelling or unit pursuant to the rental agreement with the owner no longer permanently reside there, an owner may increase the rent by any amount allowed by this Subsection to a lawful sublessee or assignee who did not reside at the dwelling or unit prior to January 1, 1996. However, such a rent increase shall not be permitted while:

(i) The dwelling or unit has been cited in an inspection report by the appropriate governmental agency as containing serious health, safety, fire, or building code violations, as defined by Section 17920.3 of the California Health and Safety Code, excluding any violation caused by a disaster; and,

(ii) The citation was issued at least 60 days prior to the date of the vacancy: and,

(iii) The cited violation had not been abated when the prior tenant vacated and had remained unabated for 60 days or for a longer period of time. However, the 60-day time period may be extended by the appropriate governmental agency that issued the citation.

(B) This Subsection 37.3(d)(2) shall not apply to partial changes in occupancy of a dwelling or unit where one or more of the occupants of the premises, pursuant to the agreement with the owner provided for above (37.3(d)(2)), remains an occupant in lawful possession of the dwellings or unit, or where a lawful sublessee or assignee who resided at the dwelling or unit prior to January 1, 1996, remains in possession of the dwelling or unit. Nothing contained in this Subsection 37.3(d)(2) shall be construed to enlarge or diminish an owner"s right to withhold consent to a sublease or assignment.

(C) Acceptance of rent by the owner shall not operate as a waiver or otherwise prevent enforcement of a covenant prohibiting sublease or assignment or as a waiver of an owner"s rights to establish the initial rental rate unless the owner has received written notice from the tenant that is party to the agreement and thereafter accepted rent.

(3) Termination or Nonrenewal of a Contract or Recorded Agreement with a Government Agency Limiting Rent. An owner who terminates or fails to renew a contract or recorded agreement with a governmental agency that provides for a rent limitation to a qualified tenant, shall be subject to the following:

(A) The tenant(s) who were beneficiaries of the contract or recorded agreement shall be given at least 90 days" written notice of the effective date of the termination and shall not be obligated to pay more than the tenant"s portion of the rent, as calculated under that contract or recorded agreement, for 90 days following receipt of the notice of termination or nonrenewal.

(B) The owner shall not be eligible to set an initial rent for three years following the date of the termination or nonrenewal of the contract or agreement.

(C) The rental rate for any new tenancy established during the three-year period in that vacated dwelling or unit shall be at the same rate as the rent under the terminated or nonrenewed contract or recorded agreement, plus any increases authorized under this Chapter 37 after the date of termination/non renewal.

(D) The provisions of Subsections 37.3(d)(3)(B) and (C) shall not apply to any new tenancy of 12 months or more duration established after January 1, 2000, pursuant to the owner"s contract or recorded agreement with a governmental agency that provides for a rent limitation to a qualified tenant unless the prior vacancy in that dwelling or unit was pursuant to a nonrenewed or canceled contract or recorded agreement with a governmental agency that provides for a rent limitation to a qualified tenant.

(4) Subsection 37.3(d) does not affect the authority of the City and County of San Francisco to regulate or monitor the basis or grounds for eviction.

(5) This Subsection 37.3(d) is intended to be and shall be construed to be consistent with the Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50. et seq.).

(e) Effect of Deferred Maintenance on Passthroughs for Lead Remediation Techniques.

(1) When lead hazards, which have been remediated or abated pursuant to San Francisco Health Code Article 26, are also violations of State or local housing health and safety laws, the costs of such work shall not be passed through to tenants as either a capital improvement or an operating and maintenance expense if the Administrative Law Judge finds that the deferred maintenance, as defined herein, of the current or previous landlord caused or contributed to the existence of the violation of law.

(2) In any unit occupied by a lead-poisoned child and in which there exists a lead hazard, as defined in San Francisco Health Code Article 26, there shall be a rebuttable presumption that violations of State or local housing health and safety laws caused or created by deferred maintenance, caused or contributed to the presence of the lead hazards. If the landlord fails to rebut the presumption, that portion of the petition seeking a rent increase for the costs of lead hazard remediation or abatement shall be denied. If the presumption is rebutted, the landlord shall be entitled to a rent increase if otherwise justified by the standards set forth in this Chapter.

(3) For purposes of the evaluation of petitions for rent increases for lead remediation work, maintenance is deferred if a reasonable landlord under the circumstances would have performed, on a regular basis, the maintenance work required to keep the premises from being in violation of housing safety and habitability standards set forth in California Civil Code Section 1941 and the San Francisco Municipal Code. In order to prevail on a deferred maintenance defense, a tenant must show that the level of repair or remediation currently required would have been lessened had maintenance been performed in a more timely manner.

Section 3. The San Francisco Administrative Code is hereby amended by amending Section 37.8, to read as follows:

SEC. 37.8. ARBITRATION OF RENTAL INCREASE ADJUSTMENTS.

(a) Authority of Board and Administrative Law Judge. In accordance with such guidelines as the Board shall establish, the Board and designated Administrative Law Judges shall have the authority to arbitrate rental increase adjustments, and to administer the rent increase protest procedures with respect to RAP rental units as set forth in Chapter 32 of the San Francisco Administrative Code.

(b) Request for Arbitration.

(1) Landlords. Landlords who seek to impose rent increases which exceed the limitations set forth in Section 37.3(a) above must request an arbitration hearing as set forth in this Section. The burden of proof is on the landlord.

(2) Tenants.

(A) Notwithstanding Section 37.3, tenants of non-RAP rental units and tenants of RAP rental units in areas designated on or after July 1, 1977, may request arbitration hearings where a landlord has substantially decreased services without a corresponding reduction in rent and/or has failed to perform ordinary repair and maintenance under State or local law and/or has failed to provide the tenant with a clear explanation of the current charges for gas and electricity or bond measure costs passed through to the tenant and/or imposed a nonconforming rent increase which is null and void. The burden of proof is on the tenant.

(B) Tenants of RAP rental units in areas designated prior to July 1, 1977, may petition for a hearing where the landlord has noticed an increase which exceeds the limitations set forth in Section 32.73 of the San Francisco Administrative Code. After a vacancy has occurred in a RAP rental unit in said areas, a new tenant of said unit may petition for a hearing where the landlord has demanded and/or received a rent for that unit which exceeds the rent increase limitations set forth in Section 32.73 of the San Francisco Administrative Code. The burden of proof is on the landlord.

(c) Procedure for Landlord Petitioners.

(1) Filing. The request for arbitration must be filed on a petition form prescribed by the Board and shall be accompanied by such supporting material as the Board shall prescribe, including but not limited to, justification for the proposed rental increase.

(2) Filing Date. The petition must be filed prior to the mailing or delivering to the tenant or tenants legal notice of the rental increase exceeding the limitations as defined in Section 37.3.

(3) Effect of Timely Filing of Petition. Provided a completed petition is timely filed, that portion of the requested rental increase which exceeds the limitations set forth in Section 37.3 and has not been certified as a justifiable increase in accordance with Section 37.7 is inoperative until such time as the Administrative Law Judge makes findings of fact at the conclusion of the arbitration hearing.

(4) Notice to Parties. The Board shall calendar the petition for hearing before a designated Administrative Law Judge and shall give written notice of the date to the parties at least 10 days prior to the hearing.

(d) Procedure for Tenant Petitioners.

(1) Filing; Limitation. The request for arbitration must be filed on a petition form prescribed by the Board and must be accompanied by such supporting material as the Board shall prescribe, including but not limited to, a copy of the landlord"s notice of rent increase. If the tenant petitioner has received certification findings regarding his rental unit in accordance with Section 37.7, such findings must accompany the petition. If the tenant petitioner has received a notification from the Chief Administrative Officer with respect to base rent and amortization of a RAP loan, such notification must accompany the petition. Tenant petitions regarding the gas and electricity passthrough must be filed within one year of the effective date of the pass-through or within one year of the date the passthrough was required to be recalculated pursuant to rules and regulations promulgated by the Board. Tenant petitions regarding the bond passthrough described in Section 37.3(a)(6) must be filed within one year of the effective date of the passthrough.

(2) Notice to Parties. The Board shall calendar the petition for hearing before a designated Administrative Law Judge and shall give written notice of the date to the parties at least 10 days prior to the hearing. Responses to a petition for hearing may be submitted in writing.

(e) Hearings.

(1) Time of Hearing. The hearing shall be held within 45 days of the filing of the petition. The level of housing services provided to tenants" rental units shall not be decreased during the period between the filing of the petition and the conclusion of the hearing.

(2) Consolidation. To the greatest extent possible, hearings with respect to a given building shall be consolidated.

(3) Conduct of Hearing. The hearing shall be conducted by an Administrative Law Judge designated by the Board. Both parties may offer such documents, testimony, written declarations or other evidence as may be pertinent to the proceedings. A record of the proceedings must be maintained for purposes of appeal.

(4) Determination of the Administrative Law Judge: Rental Units. Based upon the evidence presented at the hearing and upon such relevant factors as the Board shall determine, the Administrative Law Judge shall make findings as to whether or not the landlord"s proposed rental increase exceeding the limitations set forth in Section 37.3 is justified or whether or not the landlord has effected a rent increase through a reduction in services or has failed to perform ordinary repair and maintenance as required by State or local law; and provided further that, where a landlord has imposed a passthrough for property taxes pursuant to Section 37.3(6)(D), the same increase in property taxes shall not be included in the calculation of increased operating and maintenance expenses pursuant to this Subsection (4). In making such findings, the Administrative Law Judge shall take into consideration the following factors:

(A) Increases or decreases in operating and maintenance expenses, including, but not limited to, real estate taxes, sewer service charges, janitorial service, refuse removal, elevator service, security system, and debt service; provided, however, when a unit is purchased after the effective date of this ordinance, and this purchase occurs within two years of the date of the previous purchase, consideration shall not be given to that portion of increased debt service which has resulted from a selling price which exceeds the seller"s purchase price by more than the percentage increase in the "Consumer Price Index for All Urban Consumers for the San Francisco-Oakland Metropolitan Area, U.S. Department of Labor" between the date of previous purchase and the date of the current sale, plus the cost of capital improvements or rehabilitation work made or performed by the seller.

(B) The past history of increases in the rent for the unit and the comparison of the rent for the unit with rents for comparable units in the same general area.

(C) Any findings which have been made pursuant to Section 37.7 with respect to the unit.

(D) Failure to perform ordinary repair, replacement and maintenance in compliance with applicable State and local law.

(E) Any other such relevant factors as the Board shall specify in rules and regulations.

(5) Determination of the Administrative Law Judge: RAP Rental Units.

(A) RAP Rental Units in RAP Areas Designated Prior to July 1, 1977. The Administrative Law Judge shall make findings as to whether or not the noticed or proposed rental increase exceeds the rent increase limitations set forth in Section 32.73 of the San Francisco Administrative Code. In making such findings, the Administrative Law Judge shall apply the rent increase limitations set forth in Chapter 32 of the San Francisco Administrative Code and all rules and regulations promulgated pursuant thereto. The Administrative Law Judge shall consider the evidence presented at the hearing. The burden of proof shall be on the landlord.

(B) RAP Rental Units in RAP Areas Designated On or After July 1, 1977. The Administrative Law Judge shall make findings with respect to rent increases exceeding the limitations as set forth in Section 37.3 of this Chapter. In making such findings, the Administrative Law Judge shall take into consideration the factors set forth in Subsection (4) above and shall consider evidence presented at the hearing. The burden of proof is on the landlord.

(6) Findings of Fact. The Administrative Law Judge shall make written findings of fact, copies of which shall be mailed to the parties within 30 days of the hearing.

(7) Payment or Refund of Rents to Implement Arbitration Decision. Upon finding that all or any portion of the rent increase is or is not justified, or that any nonconforming rent increase is null and void, the Administrative Law Judge may order payment or refund of all or a portion of that cumulative amount within 15 days of the mailing of the findings of fact or may order the amount added to or offset against future rents; provided, however, that any such order shall be stayed if an appeal is timely filed by the aggrieved party. The Administrative Law Judge may order refunds of rent overpayments resulting from rent increases which are null and void for no more than the three five-year period preceding discovery of the overpayment plus the month of the filing of a landlord or tenant petition, plus and the period between the month of filing and the date of the Administrative Law Judge"s decision. In any case, calculation of rent overpayments and re-setting of the lawful base rent shall be based on a determination of the validity of all rent increases imposed since April 1, 1982, in accordance with Sections 37.3(b)(5) and 37.3(a)(2) above.

(8) Finality of Administrative Law Judge"s Decision. The decision of the Administrative Law Judge shall be final unless the Board vacates his decision on appeal.

(f) Appeals.

(1) Time and Manner. Any appeal to the Board from the determination of the Administrative Law Judge must be made within 15 calendar days of the mailing of the findings of fact unless such time limit is extended by the Board upon a showing of good cause. If the fifteenth day falls on a Saturday, Sunday or legal holiday, the appeal may be filed with the Board on the next business day. The appeal shall be in writing and must state why appellant believes there was either error or abuse of discretion on the part of the Administrative Law Judge. The filing of an appeal will stay only that portion of any Administrative Law Judge"s decision which permits payment, refund, offsetting or adding rent.

(2) Record on Appeal. Upon receipt of an appeal, the entire administrative record of the matter, including the appeal, shall be filed with the Board.

(3) Appeals. The Board shall, in its discretion, hear appeals. In deciding whether or not to hear a given appeal, the Board shall consider, among other factors, fairness to the parties, hardship to either party, and promoting the policies and purposes of this Chapter, in addition to any written comments submitted by the Administrative Law Judge whose decision is being challenged. The Board may also review other material from the administrative record of the matter as it deems necessary. A vote of three members shall be required in order for an appeal to be heard.

(4) Remand to Administrative Law Judge Without Appeal Hearing. In those cases where the Board is able to determine on the basis of the documents before it that the Administrative Law Judge has erred, the Board may remand the case for further hearing in accordance with its instructions without conducting an appeal hearing. Both parties shall be notified as to the time of the re-hearing, which shall be conducted within 30 days of remanding by the Board. In those cases where the Board is able to determine on the basis of the documents before it that the Administrative Law Judge"s findings contain numerical or clerical inaccuracies, or require clarification, the Board may continue the hearing for purposes of re-referring the case to said Administrative Law Judge in order to correct the findings.

(5) Time of Appeal Hearing; Notice to Parties. Appeals accepted by the Board shall be heard within 45 days of the filing of an appeal. Within 30 days of the filing of an appeal, both parties shall be notified in writing as to whether or not the appeal has been accepted. If the appeal has been accepted, the notice shall state the time of the hearing and the nature of the hearing. Such notice must be mailed at least 10 days prior to the hearing.

(6) Appeal Hearing; Decision of the Board. At the appeal hearing, both appellant and respondent shall have an opportunity to present oral testimony and written documents in support of their positions. After such hearing and after any further investigation which the Board may deem necessary the Board may, upon hearing the appeal, affirm, reverse or modify the Administrative Law Judge"s decision or may remand the case for further hearing in accordance with its findings. The Board"s decision must be rendered within 45 days of the hearing and the parties must be notified of such decision.

(7) Notification of the Parties. In accordance with item (6) above, parties shall receive written notice of the decision. The notice shall state that this decision is final.

(8) Effective Date of Appeal Decisions. Appeal decisions are effective on the date mailed to the parties; provided, however, that that portion of any decision which orders payment, refund, offsetting or adding rent shall become effective 30 calendar days after it is mailed to the parties unless a stay of execution is granted by a court of competent jurisdiction.

(9) Limitation of Actions. A landlord or tenant aggrieved by any decision of the Board must seek judicial review within 90 calendar days of the date of mailing of the decision.

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Section 4. The San Francisco Administrative Code is hereby amended by amending Section 37.9, to read as follows:

SEC. 37.9. EVICTIONS.

Notwithstanding Section 37.3, this Section shall apply as of August 24, 1980, to all landlords and tenants of rental units as defined in Section 37.2(r).

(a) A landlord shall not endeavor to recover possession of a rental unit unless the landlord acts in good faith, without ulterior motive and with honest intent, and unless:

(1) The tenant:

(A) Has failed to pay the rent to which the landlord is lawfully entitled under the oral or written agreement between the tenant and landlord:

(i) Except that a tenant"s nonpayment of a charge prohibited by Section 919.1 of the Police Code shall not constitute a failure to pay rent; and

(ii) Except that, commencing August 10, 2001, to and including February 10, 2003, a landlord shall not endeavor to recover or recover possession of a rental unit for failure of a tenant to pay that portion of rent attributable to a capital improvement passthrough certified pursuant to a decision issued after April 10, 2000, where the capital improvement passthrough petition was filed prior to August 10, 2001, and a landlord shall not impose any late fee(s) upon the tenant for such non-payment of capital improvement costs; or

(B) Habitually pays the rent late; or

(C) Gives checks which are frequently returned because there are insufficient funds in the checking account; or

(2) The tenant has violated a lawful obligation or covenant of tenancy other than the obligation to surrender possession upon proper notice or other than an obligation to pay a charge prohibited by Police Code Section 919.1, and failure to cure such violation after having received written notice thereof from the landlord, provided further that notwithstanding any lease provision to the contrary, a landlord shall not endeavor to recover possession of a rental unit as a result of subletting of the rental unit by the tenant if the landlord has unreasonably withheld the right to sublet following a written request by the tenant, so long as the tenant continues to reside in the rental unit and the sublet constitutes a one-for-one replacement of the departing tenant(s). If the landlord fails to respond to the tenant in writing within fourteen (14) days of receipt of the tenant"s written request, the tenant"s request shall be deemed approved by the landlord. In addition, a landlord shall not endeavor to recover possession of a rental unit as a result of the addition by the tenant of additional occupants to the rental unit, if the total number of occupants occupying a room for sleeping purposes does not violate the superficial floor area standards prescribed in Subsection (b) of Housing Code Section 503; or

(3) The tenant is committing or permitting to exist a nuisance in, or is causing substantial damage to, the rental unit, or is creating a substantial interference with the comfort, safety or enjoyment of the landlord or tenants in the building, and the nature of such nuisance, damage or interference is specifically stated by the landlord in writing as required by Section 37.9(c); or

(4) The tenant is using or permitting a rental unit to be used for any illegal purpose; or

(5) The tenant, who had an oral or written agreement with the landlord which has terminated, has refused after written request or demand by the landlord to execute a written extension or renewal thereof for a further term of like duration and under such terms which are materially the same as in the previous agreement; provided, that such terms do not conflict with any of the provisions of this Chapter; or

(6) The tenant has, after written notice to cease, refused the landlord access to the rental unit as required by State or local law; or

(7) The tenant holding at the end of the term of the oral or written agreement is a subtenant not approved by the landlord; or

(8) The landlord seeks to recover possession in good faith, without ulterior reasons and with honest intent:

(i) For the landlord"s use or occupancy as his or her principal residence for a period of at least 36 continuous months;

(ii) For the use or occupancy of the landlord"s grandparents, grandchildren, parents, children, brother or sister, or the landlord"s spouse, or the spouses of such relations, as their principal place of residency for a period of at least 36 months, in the same building in which the landlord resides as his or her principal place of residency, or in a building in which the landlord is simultaneously seeking possession of a rental unit under Section 37.9(a)(8)(i). For purposes of this Section 37.9(a)(8)(ii), the term spouse shall include domestic partners as defined in San Francisco Administrative Code Sections 62.1 through 62.8.

(iii) For purposes of this Section 37.9(a)(8) only, as to landlords who become owners of record of the rental unit on or before February 21, 1991, the term "landlord" shall be defined as an owner of record of at least 10 percent interest in the property or, for Section 37.9(a)(8)(i) only, two individuals registered as domestic partners as defined in San Francisco Administrative Code Sections 62.1 through 62.8 whose combined ownership of record is at least 10 percent. For purposes of this Section 37.9(a)(8) only, as to landlords who become owners of record of the rental unit after February 21, 1991, the term "landlord" shall be defined as an owner of record of at least 25 percent interest in the property or, for Section 37.9(a)(8)(i) only, two individuals registered as domestic partners as defined in San Francisco Administrative Code Sections 62.1 through 62.8 whose combined ownership of record is at least 25 percent.

(iv) A landlord may not recover possession under this Section 37.9(a)(8) if a comparable unit owned by the landlord is already vacant and is available, or if such a unit becomes vacant and available before the recovery of possession of the unit. If a comparable unit does become vacant and available before the recovery of possession, the landlord shall rescind the notice to vacate and dismiss any action filed to recover possession of the premises. Provided further, if a noncomparable unit becomes available before the recovery of possession, the landlord shall offer that unit to the tenant at a rent based on the rent that the tenant is paying, with upward or downward adjustments allowed based upon the condition, size, and other amenities of the replacement unit. Disputes concerning the initial rent for the replacement unit shall be determined by the Rent Board. It shall be evidence of a lack of good faith if a landlord times the service of the notice, or the filing of an action to recover possession, so as to avoid moving into a comparable unit, or to avoid offering a tenant a replacement unit.

(v) It shall be rebuttably presumed that the landlord has not acted in good faith if the landlord or relative for whom the tenant was evicted does not move into the rental unit within three months and occupy said unit as that person"s principal residence for a minimum of 36 continuous months.

(vi) Once a landlord has successfully recovered possession of a rental unit pursuant to Section 37.9(a)(8)(i), then no other current or future landlords may recover possession of any other rental unit in the building under Section 37.9(a)(8)(i). It is the intention of this Section that only one specific unit per building may be used for such occupancy under Section 37.9(a)(8)(i) and that once a unit is used for such occupancy, all future occupancies under Section 37.9(a)(8)(i) must be of that same unit, provided that a landlord may file a petition with the Rent Board, or at the landlord"s option, commence eviction proceedings, claiming that disability or other similar hardship prevents him or her from occupying a unit which was previously occupied by the landlord.

(vii) If any provision or clause of this amendment to Section 37.9(a)(8) or the application thereof to any person or circumstance is held to be unconstitutional or to be otherwise invalid by any court of competent jurisdiction, such invalidity shall not affect other chapter provisions, and clauses of this Chapter are held to be severable; or

(9) The landlord seeks to recover possession in good faith in order to sell the unit in accordance with a condominium conversion approved under the San Francisco subdivision ordinance and does so without ulterior reasons and with honest intent; or

(10) The landlord seeks to recover possession in good faith in order to demolish or to otherwise permanently remove the rental unit from housing use and has obtained all the necessary permits on or before the date upon which notice to vacate is given, and does so without ulterior reasons and with honest intent; provided that a landlord who seeks to demolish an unreinforced masonry building pursuant to Building Code Chapters 14 and 15 must provide the tenant with the relocation assistance specified in Section 37.9A(f e) below prior to the tenant"s vacating the premises; where the landlord seeks to demolish or otherwise permanently remove a unit from rental housing use, regardless of the unit"s zoning or legal status, each authorized occupant of the unit (including any minor child) who has resided in the unit for 12 or more months as of the time the unit is vacated pursuant to notice shall be entitled to receive relocation expenses of $2,000, in addition to all rights under any other provision of law. One-half of the relocation assistance payment shall be provided to each such authorized occupant at the time of service of the notice to vacate, and the remaining one-half payment shall be paid within 72 hours after vacating the premises. A landlord who pays relocation costs as required by this subsection in conjunction with a notice to quit need not pay relocation costs with any further notices to quit for the same unit that are served within 180 days of the notice that included the required relocation payment. Commencing March 1, 2003, these relocation expenses shall increase annually at the rate of increase in the "rent of primary residence" expenditure category of the Consumer Price Index (CPI) for the preceding 12 months, as that data is made available by the United States Department of Labor. The remedies available under this Subsection 37.9(a)(10) shall be in addition to any other remedies that may be available to a tenant.; or

(11) The landlord seeks in good faith to remove temporarily the unit from housing use in order to be able to carry out capital improvements or rehabilitation work and has obtained all the necessary permits on or before the date upon which notice to vacate is given,and does so without ulterior reasons and with honest intent. Any tenant authorized occupant (including any minor child) who vacates the unit under such circumstances shall have the right to reoccupy the unit at the prior rent adjusted in accordance with the provisions of this Chapter. The tenant will vacate the unit only for the minimum time required to do the work. On or before the date upon which notice to vacate is given, the landlord shall advise the tenant said occupant(s) in writing that the rehabilitation or capital improvement plans are on file with the Central Permit Bureau of the Department of Building Inspection and that arrangements for reviewing such plans can be made with the Central Permit Bureau. In addition to the above, no landlord shall endeavor to recover possession of any unit subject to a RAP loan as set forth in Section 37.2(m) of this Chapter except as provided in Section 32.69 of the San Francisco Administrative Code. The tenant Said occupant(s) shall not be required to vacate pursuant to this Section 37.9(a)(11), for a period in excess of three months; provided, however, that such time period may be extended by the Board or its Administrative Law Judges upon application by the landlord. The Board shall adopt rules and regulations to implement the application procedure. Any landlord who seeks to recover possession under this Section 37.9(a)(11) shall pay the tenant actual costs up to $1,000 each authorized occupant (including any minor child) $2,000 for moving and relocation expenses not less than 10 days prior to recovery of possession , one-half of which shall be paid at the time of the service of the notice to vacate and one-half of which shall be paid within 72 hours after vacating the premises. A landlord who pays relocation costs as required by this subsection in conjunction with a notice to quit need not pay relocation costs with any further notices to quit for the same unit that are served within 180 days of the notice that included the required relocation payment. Commencing March 1, 2003, these relocation expenses shall increase annually at the rate of increase in the "rent of primary residence" expenditure category of the Consumer Price Index (CPI) for the preceding 12 months, as that data is made available by the United States Department of Labor; or

(12) The landlord seeks to recover possession in good faith in order to carry out substantial rehabilitation, as defined in Section 37.2(s), and has obtained all the necessary permits on or before the date upon which notice to vacate is given, and does so without ulterior reasons and with honest intent. Notwithstanding the above, no landlord shall endeavor to recover possession of any unit subject to a RAP loan as set forth in Section 37.2(m) of this Chapter except as provided in Section 32.69 of the San Francisco Administrative Code. Any landlord who seeks to recover possession under this Section 37.9(a)(12) shall pay each authorized occupant (including any minor child) a minimum of $2,000 for moving, relocation and other consequential expenses, one-half of which shall be paid at the time of the service of notice to vacate, and one-half of which shall be paid within 72 hours after vacating the premises. A landlord who pays relocation costs as required by this subsection in conjunction with a notice to quit need not pay relocation costs with any further notices to quit for the same unit that are served within 180 days of the notice that included the required relocation payment. Commencing March 1, 2003, these relocation expenses shall increase annually at the rate of increase in the "rent of primary residence" expenditure category of the Consumer Price Index (CPI) for the preceding 12 months, as that data is made available by the United States Department of Labor.; or

(13) The landlord wishes to withdraw from rent or lease all rental units within any detached physical structure and, in addition, in the case of any detached physical structure containing three or fewer rental units, any other rental units on the same lot, and complies in full with Section 37.9A with respect to each such unit; provided, however, that a unit classified as a residential unit under Chapter 41 of this Code which is vacated under this Section 37.9(a)(13) may not be put to any use other than that of a residential hotel unit without compliance with the provisions of Section 41.9 of this Code; or

(14) The landlord seeks in good faith to temporarily recover possession of the unit for less than 30 days solely for the purpose of effecting lead remediation or abatement work, as required by San Francisco Health Code Article 26. The relocation rights and remedies, established by San Francisco Administrative Code Chapter 72, including but not limited to, the payment of financial relocation assistance, shall apply to evictions under this Section 37.9(a)(14).

(b) A landlord who resides in the same rental unit with his or her tenant may evict said tenant without just cause as required under Section 37.9(a) above.

(c) A landlord shall not endeavor to recover possession of a rental unit unless at least one of the grounds enumerated in Section 37.9(a) or (b) above is the landlord"s dominant motive for recovering possession and the landlord is acting in good faith, with honest intent, without ulterior motive in all actions precedent to recovery of possession; and unless the landlord informs the tenant in writing on or before the date upon which notice to vacate is given of the grounds under which possession is sought and that advice regarding the notice to vacate is available from the Residential Rent Stabilization and Arbitration Board, before endeavoring to recover possession. A copy of all notices to vacate except three-day notices to vacate or pay rent and a copy of any additional written documents informing the tenant of the grounds under which possession is sought shall be filed with the Board within 10 days following service of the notice to vacate. The District Attorney shall determine whether the units set forth on the list compiled in accordance with Section 37.6(k) are still being occupied by the tenant who succeeded the tenant upon whom the notice was served. In cases where the District Attorney determines that Section 37.9(a)(8) has been violated, the District Attorney shall take whatever action he deems appropriate under this Chapter or under State law.

(d) No landlord may cause a tenant to quit involuntarily or threaten to bring any action to recover possession, or decrease any services, or increase the rent, or take any other action where the landlord"s dominant motive is retaliation for the tenant"s exercise of any rights under the law. Such retaliation shall be a defense to any action to recover possession. In an action to recover possession of a rental unit, proof of the exercise by the tenant of rights under the law within six months prior to the alleged act of retaliation shall create a rebuttable presumption that the landlord"s act was retaliatory.

(e) It shall be unlawful for a landlord or any other person who wilfully assists the landlord to endeavor to recover possession or to evict a tenant except as provided in Section 37.9(a) and (b). Any person endeavoring to recover possession of a rental unit from a tenant or evicting a tenant in a manner not provided for in Section 37.9(a) or (b) without having a substantial basis in fact for the eviction as provided for in Section 37.9(a) shall be guilty of a misdemeanor and shall be subject, upon conviction, to the fines and penalties set forth in Section 37.10. Any waiver by a tenant of rights under this Chapter shall be void as contrary to public policy.

(f) Whenever a landlord wrongfully endeavors to recover possession or recovers possession of a rental unit in violation of Sections 37.9 and/or 37.10 as enacted herein, the tenant or Board may institute a civil proceeding for injunctive relief, money damages of not less than three times actual damages, (including damages for mental or emotional distress), and whatever other relief the court deems appropriate. In the case of an award of damages for mental or emotional distress, said award shall only be trebled if the trier of fact finds that the landlord acted in knowing violation of or in reckless disregard of Section 37.9 or 37.10A herein. The prevailing party shall be entitled to reasonable attorney"s fees and costs pursuant to order of the court. The remedy available under this Section 37.9(f) shall be in addition to any other existing remedies which may be available to the tenant or the Board.

(g) The provisions of this Section 37.9 shall apply to any rental unit as defined in Sections 37.2(r)(4)(A) and 37.2(r)(4)(B), including where a notice to vacate/quit any such rental unit has been served as of the effective date of this Ordinance No. 250-98 but where any such rental unit has not yet been vacated or an unlawful detainer judgment has not been issued as of the effective date of this Ordinance No. 250-98.

(h) With respect to rental units occupied by recipients of tenant-based rental assistance, the notice requirements of this Section 37.9 shall be required in addition to any notice required as part of the tenant-based rental assistance program, including but not limited to the notice required under 24 CFR Section 982.310(e)(2)(ii).

(i) The following additional provisions shall apply to a landlord who seeks to recover a rental unit by utilizing the grounds enumerated in Section 37.9(a)(8):

(1) A landlord may not recover possession of a unit from a tenant under Section 37.9(a)(8) if the landlord has or receives notice, any time before recovery of possession, that any tenant in the rental unit:

(A) Is 60 years of age or older and has been residing in the unit for 10 years or more; or

(B) Is disabled within the meaning of Section 37.9(i)(1)(B)(i) and has been residing in the unit for 10 years or more, or is catastrophically ill within the meaning of Section 37.9(i)(1)(B)(ii) and has been residing in the unit for five years or more:

(i) A "disabled" tenant is defined for purposes of this Section 37.9(i)(1)(B) as a person who is disabled or blind within the meaning of the federal Supplemental Security Income/California State Supplemental Program (SSI/SSP), and who is determined by SSI/SSP to qualify for that program or who satisfies such requirements through any other method of determination as approved by the Rent Board;

(ii) A "catastrophically ill" tenant is defined for purposes of this Section 37.9(i)(1)(B) as a person who is disabled as defined by Section 37.9(i)(1)(B)(i), and who is suffering from a life threatening illness as certified by his or her primary care physician.

(2) The foregoing provisions of Sections 37.9(i)(1)(A) and (B) shall not apply where there is only one rental unit owned by the landlord in the building, or where each of the rental units owned by the landlord in the same building where the landlord resides (except the unit actually occupied by the landlord) is occupied by a tenant otherwise protected from eviction by Sections 37.9(i)(1)(A) or (B) and where the landlord"s qualified relative who will move into the unit pursuant to Section 37.9(a)(8) is 60 years of age or older.

(3) The provisions established by this Section 37.9(i) include, but are not limited to, any rental unit where a notice to vacate/quit has been served as of the date this amendment takes effect but where the rental unit has not yet been vacated or an unlawful detainer judgment has not been issued.

(4) Within 30 days of personal service by the landlord of a written request, or, at the landlord"s option, a notice of termination of tenancy under Section 37.9(a)(8), the tenant must submit a statement, with supporting evidence, to the landlord if the tenant claims to be a member of one of the classes protected by Section 37.9(i). The written request or notice shall contain a warning that a tenant"s failure to submit a statement within the 30 day period shall be deemed an admission that the tenant is not protected by Section 37.9(i). The landlord shall file a copy of the request or notice with the Rent Board within 10 days of service on the tenant. A tenant"s failure to submit a statement within the 30 day period shall be deemed an admission that the tenant is not protected by Section 37.9(i). A landlord may challenge a tenant"s claim of protected status either by requesting a hearing with the Rent Board or, at the landlord"s option, through commencement of eviction proceedings, including service of a notice of termination of tenancy. In the Rent Board hearing or the eviction action, the tenant shall have the burden of proof to show protected status. No civil or criminal liability under Section 37.9(e) or (f) shall be imposed upon a landlord for either requesting or challenging a tenant"s claim of protected status.

(5) This Section 37.9(i) is severable from all other sections and shall be of no force or effect if any temporary moratorium on owner/relative evictions adopted by the Board of Supervisors after June 1, 1998 and before October 31, 1998 has been invalidated by the courts in a final decision.

Section 5. The San Francisco Administrative Code is hereby amended by amending Section 37.9B, to read as follows:

SEC. 37.9B. TENANT RIGHTS IN EVICTIONS UNDER SECTION 37.9(a)(8).

(a) Any rental unit which a tenant vacates after receiving a notice to quit based on Section 37.9(a)(8), and which is subsequently no longer occupied as a principal residence by the landlord or the landlord"s grandparent, parent, child, grandchild, brother, sister, or the landlord"s spouse, or the spouses of such relations must, if offered for rent during the three-year period following service of the notice to quit under Section 37.9(a)(8), be rented in good faith at a rent not greater than at which would have been the rent had the tenant who had been required to vacate remained in continuous occupancy and the rental unit remained subject to this Chapter. If it is asserted that a rent increase could have taken place during the occupancy of the rental unit by the landlord if the rental unit had been subjected to this Chapter, the landlord shall bear the burden of proving that the rent could have been legally increased during the period. If it is asserted that the increase is based in whole or in part upon any grounds other than that set forth in Section 37.3(a)(1), the landlord must petition the Rent Board pursuant to the procedures of this Chapter. Displaced tenants shall be entitled to participate in and present evidence at any hearing held on such a petition. Tenants displaced pursuant to Section 37.9(a)(8) shall make all reasonable efforts to keep the Rent Board apprised of their current address. The Rent Board shall provide notice of any proceedings before the Rent Board to the displaced tenant at the last address provided by the tenant. No increase shall be allowed on account of any expense incurred in connection with the displacement of the tenant.

(b) Any landlord who, within three years of the date of service of the notice to quit, offers for rent or lease any unit in which the possession was recovered pursuant to Section 37.9(a)(8) shall first offer the unit for rent or lease to the tenants displaced in the same manner as provided for in Sections 37.9A(c) and (d).

(c) An owner who endeavors to recover possession under Section 37.9(a)(8) shall, in addition to complying with the requirements of Section 37.9(c), inform the tenant in writing of the following and file any written documents informing the tenant of the following with the Rent Board within 10 days after service of the notice to vacate;

(1) The identity and percentage of ownership of all persons holding a full or partial percentage ownership in the property;

(2) The dates the percentages of ownership were recorded;

(3) The name(s) of the landlord endeavoring to recover possession and, if applicable, the name(s) and relationship of the relative(s) for whom possession is being sought and a description of the current residence of the landlord or relative(s);

(4) A description of all residential properties owned, in whole or in part, by the landlord and, if applicable, a description of all residential properties owned, in whole or in part, by the landlord"s grandparent, parent, child, grandchild, brother, or sister for whom possession is being sought;

(5) The current rent for the unit and a statement that the tenant has the right to re-rent the unit at the same rent, as adjusted by Section 37.9B(a) above;

(6) The contents of Section 37.9B, by providing a copy of same; and

(7) The right the tenant(s) may have to relocation costs and the amount of those relocation costs.

(d) Each individual tenant authorized occupant (including any minor child) of any rental unit in a building containing two or more units who receives a notice to quit based upon Section 37.9(a)(8), and who has resided in the unit for 12 or more months at the time the unit is vacated pursuant to notice in addition to all rights under any other provision of law, shall be entitled to receive relocation expenses of $1,000 $2000 from the owner, $500 one-half of which shall be paid at the time of the service of the notice to vacate, and $500 one-half of which shall be paid when the tenant vacates within 72 hours after vacating the premises. A landlord who pays relocation costs as required by this subsection in conjunction with a notice to quit need not pay relocation costs with any further notices to quit for the same unit that are served within 180 days of the notice that included the required relocation payment. Commencing March 1, 2003, these relocation expenses shall increase annually at the rate of increase in the "rent of primary residence" expenditure category of the Consumer Price Index (CPI) for the preceding 12 months, as that data is made available by the United States Department of Labor. An owner who pays relocation costs as required by this subsection in conjunction with a notice to quit need not pay relocation costs with any further notices to quit for the same unit that are served within 180 days of the notice that included the required relocation payment. The relocation costs contained herein are separate from any security or other refundable deposits as defined in California Code Section 1950.5. Further, payment or acceptance of relocation costs shall not waive any other rights a tenant may have under law.

Section 6. The San Francisco Administrative Code is hereby amended by amending Section 37.11A, to read as follows:

SEC. 37.11A. CIVIL ACTIONS.

Whenever a landlord charges a tenant a rent which exceeds the limitations set forth in this Chapter, retaliates against a tenant for the exercise of any rights under this Chapter, or attempts to prevent a tenant from acquiring any rights under this Chapter, the tenant may institute a civil proceeding for money damages against the landlord, the landlord"s successor in interest, or both; provided, however, that any monetary award for rent overpayments resulting from a rent increase which is null and void pursuant to Section 37.3(b)(5) shall be limited to shall include a refund of rent overpayments made during the three-year period preceding the month of filing of the action, plus the period between the month of filing and the date of the court"s order. In any case, calculation of rent overpayments and re-setting of the lawful base rent shall be based on a determination of the validity of all rent increases imposed since April 1, 1982, in accordance with Sections 37.3(b)(5) and 37.3(a)(2) above. The prevailing party in any civil action brought under this Section 37.11A shall be entitled to recover reasonable attorneys" fees and costs. The remedy available under this Section shall be in addition to any other existing remedies which may be available to the tenant.

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Section 7. The San Francisco Housing Code is hereby amended by amending Section 503, to read as follows:

SEC. 503. ROOM DIMENSIONS.

(a) Ceiling Heights. Unless legally constructed as such, no habitable room shall have a ceiling height less than seven feet six inches. Any room, other than a habitable room, shall have a ceiling height of not less than seven feet.

(b) Superficial Floor Area. Every dwelling unit and congregate residence shall have at least one room which shall have not less than 120 square feet of superficial floor area. Every room which is used for both cooking and living or both living and sleeping purposes shall have not less than 144 square feet of superficial floor area. Every room used for sleeping purposes shall have not less than 70 square feet of superficial floor area. When more than two persons occupy a room used for sleeping purposes the required superficial floor area shall be increased at the rate of 50 square feet for each occupant in excess of two. Guest rooms with cooking shall contain the combined required superficial areas of a sleeping room and a kitchen, but not less than 144 square feet. Other habitable rooms shall be not less than 70 square feet. Notwithstanding any provision of this Section, children under the age of six shall not be counted for purposes of determining whether a family with minor children complies with the provisions of this Code.

(c) Width. No habitable room except a kitchen shall be less than seven feet in width. Rooms used as guest rooms with cooking shall have a 10-foot minimum width.

(d) Housing Access. To promote access toaffordable housingby families, it shall be unlawful for the owner, lessor, lessee, sublessee, real estate broker, assignee, or other person having the rights of ownership, the right of possession, or other right to rent or lease any dwelling unit or any agent or employee of such person to refuse to rent or lease, or otherwise deny, a dwelling unit toa family, as defined in Section 401 of this Code, any person on the basis of the actual or potential number of occupants if the total number of persons occupying a room for sleeping purposes does not violate the minimum superficial floor area standards prescribed in Subsection (b) of this Section. The protections of this subsection shall apply to prospective tenants at the commencement of a lease or other rental agreement, and to current tenants under an existing lease or other rental agreement who seek to share the leased premises with an additional occupant or occupants.

(e) Remedies. A violation of Subsection (d) of this Section shall be subject to civil remedies specified in Section 204 (e) of this Code.

APPROVED AS TO FORM:

DENNIS J. HERRERA, City Attorney

By:

MARIE CORLETT BLITS

Deputy City Attorney

Summary Of New Eviction Regulations

Supervisor Ammiano Introduces Capital Improvement Passthrough Compromise Ord. 050702

Note: This legislation will probably not go into effect before August 2002, although it has a retroactive effective date of May 1, 2002. Watch our web site for news updates on this legislation.

[Amending the Rent Control Ordinance regarding permissible passthrough from landlords to residential tenants of certain bond costs; and regarding passthrough of certain costs for capital improvements, rehabilitation, energy conservation improvements, and renewable energy improvements, and expanding the provisions permitting tenant hardship applications for relief from such passthroughs.]

Ordinance amending the Residential Rent Stabilization and Arbitration Ordinance (Administrative Code Chapter 37) regarding permissible passthrough of bond costs from landlords to tenants by providing for 50% passthrough of the change in the landlord"s property tax resulting from the repayment of general obligation bonds of the City and County of San Francisco approved by the voters in the future; and regarding permissible passthrough from landlords to residential tenants of certain costs for capital improvements, rehabilitation, energy conservation improvements, and renewable energy improvements, by codifying and expanding existing amortization schedules, by establishing specified maximum annual passthroughs at 5% of a tenant"s base rent for properties with five or fewer units and at 10% of a tenant"s base rent for properties with six or more units, by capping certification for work and improvements on properties with six or more residential units at 50% of landlord costs unless the tenant elects 100% passthrough of costs with a lifetime rent increase cap of 15% of base rent, by lengthening the amortization period from 10 years to 20 years for certain improvements required by law (including certain seismic improvements to unreinforced masonry buildings), by providing tenants and the Rent Board with pre-application notice of large projects, by providing that each petition totaling more than $25,000 must pay the cost of an estimator hired by the Rent Board unless the applicant provides copies of competitive bids received or copies of time and materials billing, by providing for the Commission on the Environment to conduct hearings and recommend new passthrough provisions encouraging energy conservation improvements and renewable energy improvements, and by expanding the provisions for tenant hardship applications for relief from such passthroughs by providing that a tenant can file such an application at any time instead of only at the time the passthrough is originally approved. This Ordinance amends Sections 37.2, 37.3, and 37.7, and 37.8B, with most provisions operative May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading by the Board of Supervisors, whichever is later.

Note: Additions are single-underline italics Times New Roman font;

deletions are strikethrough italics Times New Roman font.

Board amendment additions are double underlined Arial font;

Board amendment deletions are strikethrough Arial font.

Be it ordained by the People of the City and County of San Francisco:

Section 1. The San Francisco Administrative Code is hereby amended by amending Section 37.2, to read as follows:

SEC. 37.2. DEFINITIONS.

(a) Base Rent.

(1) That rent which is charged a tenant upon initial occupancy plus any rent increase allowable and imposed under this Chapter; provided, however, that base rent shall not include increases imposed pursuant to Section 37.7 below or utility passthroughs or general obligation passthroughs pursuant to Section 37.2(q) below. Base rent for tenants of RAP rental units in areas designated on or after July 1, 1977, shall be that rent which was established pursuant to Section 32.73-1 of the San Francisco Administrative Code. Rent increases attributable to the City Administrator"s amortization of an RAP loan in an area designated on or after July 1, 1977, shall not be included in the base rent.

(2) From and after the effective date of this ordinance, the base rent for tenants occupying rental units which have received certain tenant-based or project-based rental assistance shall be as follows:

(A) With respect to tenant-based rental assistance:

(i) For any tenant receiving tenant-based assistance as of the effective date of this ordinance (except where the rent payable by the tenant is a fixed percentage of the tenant"s income, such as in the Section 8 certificate program and the rental subsidy program for the HOPWA program), and continuing to receive tenant-based rental assistance following the effective date of this ordinance, the base rent for each unit occupied by such tenant shall be the rent payable for that unit under the Housing Assistance Payments contract, as amended, between the San Francisco Housing Authority and the landlord (the "HAP contract") with respect to that unit immediately prior to the effective date of this ordinance (the "HAP" contract rent").

(ii) For any tenant receiving tenant-based rental assistance (except where the rent payable by the tenant is a fixed percentage of the tenant"s income, such as in the Section 8 certificate program and the rental subsidy program for the HOPWA program), and commencing occupancy of a rental unit following the effective date of this ordinance, the base rent for each unit occupied by such a tenant shall be the HAP contract rent in effect as of the date the tenant commences occupancy of such unit.

(iii) For any tenant whose tenant-based rental assistance terminates or expires, for whatever reason, following the effective date of this ordinance, the base rent for each such unit following expiration or termination shall be the HAP contract rent in effect for that unit immediately prior to the expiration or termination of the tenant-based rental assistance.

(B) For any tenant occupying a unit upon the expiration or termination, for whatever reason, of a project-based HAP contract under Section 8 of the United States Housing Act of 1937 (42 USC Section 1437f, as amended), the base rent for each such unit following expiration or termination shall be the "contract rent" in effect for that unit immediately prior to the expiration or termination of the project-based HAP contract.

(C) For any tenant occupying a unit upon the prepayment or expiration of any mortgage insured by the United States Department of Housing and Urban Development ("HUD"), including but not limited to mortgages provided under Sections 221(d)(3), 221(d)(4) and 236 of the National Housing Act (12 USC Section 1715z-1), the base rent for each such unit shall be the "basic rental charge" (described in 12 USC 1715z-1(f), or successor legislation) in effect for that unit immediately prior to the prepayment of the mortgage, which charge excludes the "interest reduction payment" attributable to that unit prior to the mortgage prepayment or expiration.

(b) Board. The Residential Rent Stabilization and Arbitration Board.

(c) Capital Improvements. Those improvements which materially add to the value of the property, appreciably prolong its useful life, or adapt it to new uses, and which may be amortized over the useful life of the improvement of the building.

(d) CPI. Consumer Price Index for all Urban Consumers for the San Francisco-Oakland Metropolitan Area, U.S. Department of Labor.

(e) Energy Conservation Measures Improvements. Work performed pursuant to the requirements of Article Chapter 12 of the San Francisco Housing Code.

(f) Administrative Law Judge. A person, designated by the Board, who arbitrates and mediates rental increase disputes, and performs other duties as required pursuant to this Chapter 37.

(g) Housing Services. Services provided by the landlord connected with the use or occupancy of a rental unit including, but not limited to: repairs; replacement; maintenance; painting; light; heat; water; elevator service; laundry facilities and privileges; janitor service; refuse removal; furnishings; telephone; parking; rights permitted the tenant by agreement, including the right to have a specific number of occupants, whether express or implied, and whether or not the agreement prohibits subletting and/or assignment; and any other benefits, privileges or facilities.

(h) Landlord. An owner, lessor, sublessor, who receives or is entitled to receive rent for the use and occupancy of any residential rental unit or portion thereof in the City and County of San Francisco, and the agent, representative or successor of any of the foregoing.

(i) Member. A member of the Residential Rent Stabilization and Arbitration Board.

(j) Over FMR Tenancy Program. A regular certificate tenancy program whereby the base rent, together with a utility allowance in an amount determined by HUD, exceeds the fair market rent limitation for a particular unit size as determined by HUD.

(k) Payment Standard. An amount determined by the San Francisco Housing Authority that is used to determine the amount of assistance paid by the San Francisco Housing Authority on behalf of a tenant under the Section 8 Voucher Program (24 CFR Part 887).

(l) RAP. Residential Rehabilitation Loan Program (Chapter 32, San Francisco Administrative Code).

(m) RAP Rental Units. Residential dwelling units subject to RAP loans pursuant to Chapter 32, San Francisco Administrative Code.

(n) Real Estate Department. A city department in the City and County of San Francisco.

(o) Rehabilitation Work. Any rehabilitation or repair work done by the landlord with regard to a rental unit, or to the common areas of the structure containing the rental unit, which work was done in order to be in compliance with State or local law, or was done to repair damage resulting from fire, earthquake or other casualty or natural disaster.

(p) Rent. The consideration, including any bonus, benefits or gratuity, demanded or received by a landlord for or in connection with the use or occupancy of a rental unit, or the assignment of a lease for such a unit, including but not limited to monies demanded or paid for parking, furnishing, food service, housing services of any kind, or subletting.

(q) Rent Increases. Any additional monies demanded or paid for rent as defined in item (p) above, or any reduction in housing services without a corresponding reduction in the monies demanded or paid for rent; provided, however, that (1) where the landlord has been paying the tenant"s utilities and cost of those utilities increase, the landlord"s passing through to the tenant of such increased costs does not constitute a rent increase; and (2) where there has been a change in the landlord"s property tax attributable to a ballot measure approved by the voters between November 1, 1996, and November 30, 1998, or after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], the landlord"s passing through of such increased costs in accordance with this Chapter does not constitute a rent increase.

(r) Rental Units. All residential dwelling units in the City and County of San Francisco together with the land and appurtenant buildings thereto, and all housing services, privileges, furnishings and facilities supplied in connection with the use or occupancy thereof, including garage and parking facilities. The term shall not include:

(1) Housing accommodations in hotels, motels, inns, tourist houses, rooming and boarding houses, provided that at such time as an accommodation has been occupied by a tenant for 32 continuous days or more, such accommodation shall become a rental unit subject to the provisions of this Chapter; provided further, no landlord shall bring an action to recover possession of such unit in order to avoid having the unit come within the provisions of this Chapter. An eviction for a purpose not permitted under Section 37.9(a) shall be deemed to be an action to recover possession in order to avoid having a unit come within the provisions of this Chapter;

(2) Dwelling units in nonprofit cooperatives owned, occupied and controlled by a majority of the residents or dwelling units solely owned by a nonprofit public benefit corporation governed by a board of directors the majority of which are residents of the dwelling units and where it is required in the corporate by-laws that rent increases be approved by a majority of the residents;

(3) Housing accommodation in any hospital, convent, monastery, extended care facility, asylum, residential care or adult day health care facility for the elderly which must be operated pursuant to a license issued by the California Department of Social Services, as required by California Health and Safety Chapters 3.2 and 3.3; or in dormitories owned and operated by an institution of higher education, a high school, or an elementary school;

(4) Except as provided in Subsections (A) and (B), dwelling units whose rents are controlled or regulated by any government unit, agency or authority, excepting those unsubsidized and/or unassisted units which are insured by the United States Department of Housing and Urban Development; provided, however, that units in unreinforced masonry buildings which have undergone seismic strengthening in accordance with Building Code Chapters 14 16B and 15 16C shall remain subject to the Rent Ordinances to the extent that the ordinance is not in conflict with the seismic strengthening bond program or with the program"s loan agreements or with any regulations promulgated thereunder;

(A) For purposes of Sections 37.2, 37.3(a)(10)(A), 37.4, 37.5, 37.6, 37.9, 37.9A, 37.10A, 37.11A and 37.13, and the arbitration provisions of Sections 37.8 and 37.8A applicable only to the provisions of Sections 37.3(a)(10)(A), the term "rental units" shall include units occupied by recipients of tenant-based rental assistance where the tenant-based rental assistance program does not establish the tenant"s share of base rent as a fixed percentage of a tenant"s income, such as in the Section 8 voucher program and the "Over- FMR Tenancy" program defined in 24 CFR Section 982.4;

(B) For purposes of Sections 37.2, 37.3(a)(10)(B), 37.4, 37.5, 37.6, 37.9, 37.9A, 37.10A, 37.11A and 37.13, the term "rental units" shall include units occupied by recipients of tenant-based rental assistance where the rent payable by the tenant under the tenant-based rental assistance program is a fixed percentage of the tenant"s income; such as in the Section 8 certificate program and the rental subsidy program for the Housing Opportunities for Persons with Aids ("HOPWA") program (42 U.S.C. Section 12901 et seq., as amended).

(5) Rental units located in a structure for which a certificate of occupancy was first issued after the effective date of this ordinance, except as provided for certain categories of units and dwellings by Section 37.3(d) and Section 37.9A(b) of this Chapter;

(6) Dwelling units in a building which has undergone substantial rehabilitation after the effective date of this ordinance; provided, however, that RAP rental units are not subject to this exemption.

(7) Dwellings or units otherwise subject to this Chapter 37, to the extent such dwellings or units are partially or wholly exempted from rent increase limitations by the Costa-Hawkins Rental Housing Act (California Civil Code Sections 1954.50. et seq.) and/or San Francisco Administrative Code Section 37.3(d).

(s) Substantial Rehabilitation. The renovation, alteration or remodeling of residential units of 50 or more years of age which have been condemned or which do not qualify for certificates of occupancy or which require substantial renovation in order to conform the building to contemporary standards for decent, safe and sanitary housing. Substantial rehabilitation may vary in degree from gutting and extensive reconstruction to extensive improvements that cure substantial deferred maintenance. Cosmetic improvements alone such as painting, decorating and minor repairs, or other work which can be performed safely without having the unit vacated do not qualify as substantial rehabilitation.

(t) Tenant. A person entitled by written or oral agreement, sub-tenancy approved by the landlord, or by sufferance, to occupy a residential dwelling unit to the exclusion of others.

(u) Tenant-Based Rental Assistance. Rental assistance provided directly to a tenant or directly to a landlord on behalf of a particular tenant, which includes but shall not be limited to certificates and vouchers issued pursuant to Section 8 of the United States Housing Act of 1937, as amended (42 U.S.C. Section 1437f) and the HOPWA program.

(v) Utilities. The term "utilities" shall refer to gas and electricity exclusively.

Section 2. The San Francisco Administrative Code is hereby amended by amending Section 37.3, to read as follows:

SEC. 37.3. RENT LIMITATIONS.

(a) Rent Increase Limitations for Tenants in Occupancy. Landlords may impose rent increases upon tenants in occupancy only as provided below and as provided by Subsection 37.3(d):

(1) Annual Rent Increase. On March 1st of each year, the Board shall publish the increase in the CPI for the preceding 12 months, as made available by the U.S. Department of Labor. A landlord may impose annually a rent increase which does not exceed a tenant"s base rent by more than 60 percent of said published increase. In no event, however, shall the allowable annual increase be greater than seven percent.

(2) Banking. A landlord who refrains from imposing an annual rent increase or any portion thereof may accumulate said increase and impose that amount on the tenant"s subsequent rent increase anniversary dates. A landlord who, between April 1, 1982, and February 29, 1984, has banked an annual seven percent rent increase (or rent increases) or any portion thereof may impose the accumulated increase on the tenant"s subsequent rent increase anniversary dates.

(3) Capital Improvements, Rehabilitation, and Energy Conservation Measures Improvements, and Renewable Energy Improvements. A landlord may impose rent increases based upon the cost of capital improvements, rehabilitation, or energy conservation measures improvements, or renewable energy improvements, provided that such costs are certified pursuant to Sections 37.7 and 37.8B below; provided further that where a landlord has performed seismic strengthening in accordance with Building Code Chapters 14 16B and 15 16C, no increase for capital improvements (including but not limited to seismic strengthening) shall exceed, in any 12 month period, 10 percent of the tenant"s base rent, subject to rules adopted by the Board to prevent landlord hardship and to permit landlords to continue to maintain their buildings in a decent, safe and sanitary condition. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to the 10 percent limitation. Nothing in this subsection shall be construed to supersede any Board rules or regulations with respect to limitations on increases based upon capital improvements whether performed separately or in conjunction with seismic strengthening improvements pursuant to Building Code Chapters 14 16B and 15 16C.

(4) Utilities. A landlord may impose increases based upon the cost of utilities as provided in Section 37.2(q) above.

(5) Charges Related to Excess Water Use. A landlord may impose increases not to exceed 50 percent of the excess use charges (penalties) levied by the San Francisco Water Department on a building for use of water in excess of Water Department allocations under the following conditions:

(A) The landlord provides tenants with written certification that the following have been installed in all units: (1) permanently installed retrofit devices designed to reduce the amount of water used per flush or low-flow toilets (1.6 gallons per flush); (2) low-flow showerheads which allow a flow of no more than 2.5 gallons per minute; and (3) faucet aerators (where installation on current faucets is physically feasible); and

(B) The landlord provides the tenants with written certification that no known plumbing leaks currently exist in the building and that any leaks reported by tenants in the future will be promptly repaired; and

(C) The landlord provides the tenants with a copy of the water bill for the period in which the penalty was charged. Only penalties billed for a service period which begins after the effective date of the ordinance [April 20, 1991] may be passed through to tenants. Where penalties result from an allocation which does not reflect documented changes in occupancy which occurred after March 1, 1991, a landlord must, if requested in writing by a tenant, make a good-faith effort to appeal the allotment. Increases based upon penalties shall be prorated on a per-room basis provided that the tenancy existed during the time the penalty charges accrued. Such charges shall not become part of a tenant"s base rent. Where a penalty in any given billing period reflects a 25 percent or more increase in consumption over the prior billing period, and where that increase does not appear to result from increased occupancy or any other known use, a landlord may not impose any increase based upon such penalty unless inspection by a licensed plumber or Water Department inspector fails to reveal a plumbing or other leak. If the inspection does reveal a leak, no increase based upon penalties may be imposed at any time for the period of the unrepaired leak.

(6) Property Tax. A landlord may impose increases based upon a 100% passthrough of the change in the landlord"s property tax resulting from the repayment of general obligation bonds of the City and County of San Francisco approved by the voters between November 1, 1996, and November 30, 1998, as provided in Section 37.2(q) above.

A landlord may impose increases based upon a 50% passthrough of the change in the landlord"s property tax resulting from the repayment of general obligation bonds of the City and County of San Francisco approved by the voters after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], as provided in Section 37.2(q) above, and subject to the following requirement: Any rent increase for bonds approved after the effective date of this initiative ordinance [November 2000 Proposition H, effective December 20, 2000] must be disclosed and approved by the voters.

The amount of such increases shall be determined for each tax year as follows:

(A) For general obligation bonds approved by the voters between November 1, 1996 and November 30, 1998:

(A i) The Controller and the Board of Supervisors will determine the percentage of the property tax rate, if any, in each tax year attributable to general obligation bonds approved by the voters between November 1, 1996, and November 30, 1998, and repayable within such tax year.

(B ii) This percentage shall be multiplied by the total amount of the net taxable value for the applicable tax year. The result is the dollar amount of property taxes for that tax year for a particular property attributable to the repayment of general obligation bonds approved by the voters between November 1, 1996, and November 30, 1998.

(C iii) The dollar amount calculated under Subsection (B ii) shall be divided by the total number of all units in each property, including commercial units. That figure shall be divided by 12 months, to determine the monthly per unit costs for that tax year of the repayment of general obligation bonds approved by the voters between November 1, 1996, and November 30, 1998.

(B) For general obligation bonds approved by the voters after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later] where any rent increase has been disclosed and approved by the voters:

(i) The Controller and the Board of Supervisors will determine the percentage of the property tax rate, if any, in each tax year attributable to general obligation bonds approved by the voters after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], and repayable within such tax year.

(ii) This percentage shall be multiplied by the total amount of the net taxable value for the applicable tax year. The result is the dollar amount of property taxes for that tax year for a particular property attributable to the repayment of general obligation bonds approved by the voters after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later].

(iii) The dollar amount calculated under Subsection (ii) shall be divided by two, and then by the total number of all units in each property, including commercial units. That figure shall be divided by 12 months, to determine the monthly per unit costs for that tax year of the repayment of general obligation bonds approved by the voters after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later].

(D C) Landlords may pass through to each unit in a particular property the dollar amounts calculated under this these Subsections 37.3(6)(A) and (B). This These passthroughs may be imposed only on the anniversary date of each tenant"s occupancy of the property. This These passthroughs shall not become a part of a tenant"s base rent. The amount of each annual passthrough imposed pursuant to this Subsection (6) may vary from year-to-year, depending on the amount calculated under Subsections (A) through and (C B). Each annual passthrough shall apply only for the 12 month period after it is imposed. A landlord may impose the passthroughs described in this Subsection (6) for a particular tax year only with respect to those tenants who were residents of a particular property on November 1st of the applicable tax year. A landlord shall not impose a passthrough pursuant to this Subsection (6) if the landlord has filed for or received Board approval for a rent increase under Section 37.8(e)(4) for increased operating and maintenance expenses in which the same increase in property taxes due to the repayment of general obligation bonds was included in the comparison year cost totals.

(E D) The Board will have available a form which explains how to calculate the passthrough.

(F E) Landlords must provide to tenants, at least 30 days prior to the imposition of the on or before the date that notice is served on the tenant of a passthrough permitted under this Subsection (6), a copy of the completed form described in Subsection (E D). This completed form shall be provided in addition to the Notice of Rent Increase required under Section 37.3(b)(5). A tenants may petition for a hearing under the procedure described in Section 37.8 where the tenant alleges that a landlord has imposed a charge which exceeds the limitations set forth in this Subsection (6). In such a hearing, the burden of proof shall be on the landlord. Tenant petitions regarding this passthrough must be filed within one year of the effective date of the passthrough.

(G F) The Board may amend its rules and regulations as necessary to implement this Subsection (6).

(7) RAP Loans. A landlord may impose rent increases attributable to the City Administrator"s amortization of the RAP loan in an area designated on or after July 1, 1977, pursuant to Chapter 32 of the San Francisco Administrative Code.

(8) Additional Increases. A landlord who seeks to impose any rent increase which exceeds those permitted above shall petition for a rental arbitration hearing pursuant to Section 37.8 of this Chapter.

(9) A landlord may impose a rent increase to recover costs incurred for the remediation of lead hazards, as defined in San Francisco Health Code Article 26. Such increases may be based on changes in operating and maintenance expenses or for capital improvement expenditures as long as the costs which are the basis of the rent increase are a substantial portion of the work which abates or remediates a lead hazard, as defined in San Francisco Health Code Article 26, and provided further that such costs are approved for operating and maintenance expense increases pursuant to Section 37.8(e)(4)(A) and certified as capital improvements pursuant to Section 37.7 below.

When rent increases are authorized by this Subsection 37.3(a)(9), the total rent increase for both operating and maintenance expenses and capital improvements shall not exceed 10 percent in any 12 month period. If allowable rent increases due to the costs of lead remediation and abatement work exceed 10 percent in any 12 month period, an Administrative Law Judge shall apply a portion of such excess to approved operating and maintenance expenses for lead remediation work, and the balance, if any, to certified capital improvements, provided, however, that such increase shall not exceed 10 percent. A landlord may accumulate any approved or certified increase which exceeds this amount, subject to the 10 percent limit.

(10) With respect to units occupied by recipients of tenant-based rental assistance:

(A) If the tenant"s share of the base rent is not calculated as a fixed percentage of the tenant"s income, such as in the Section 8 voucher program and the Over-FMR Tenancy Program, then:

(i) If the base rent is equal to or greater than the payment standard, the rent increase limitations in Sections 37.3(a)(1) and (2) shall apply to the entire base rent, and the arbitration procedures for those increases set forth in Section 37.8 and 37.8A shall apply.

(ii) If the base rent is less than the payment standard, the rent increase limitations of this Chapter shall not apply; provided, however, that any rent increase which would result in the base rent being equal to or greater than the payment standard shall not result in a new base rent that exceeds the payment standard plus the increase allowable under Section 37.3(a)(1).

(B) If the tenant"s share of the base rent is calculated as a fixed percentage of the tenant"s income, such as in the Section 8 certificate program and the rental subsidy program for the HOPWA program, the rent increase limitations in Section 37.3(a)(1) and (2) shall not apply. In such circumstances, adjustments in rent shall be made solely according to the requirements of the tenant-based rental assistance program.

(b) Notice of Rent Increase for Tenants in Occupancy. On or before the date upon which a landlord gives a tenant legal notice of a rent increase, the landlord shall inform the tenant, in writing, of the following:

(1) Which portion of the rent increase reflects the annual increase, and/or a banked amount, if any;

(2) Which portion of the rent increase reflects costs for increased operating and maintenance expenses, rents for comparable units, and/or capital improvements, rehabilitation, or energy conservation measures improvements, or renewable energy improvements certified pursuant to Section 37.7. Any rent increase certified due to increases in operating and maintenance costs shall not exceed seven percent;

(3) Which portion of the rent increase reflects the passthrough of charges for gas and electricity, or bond measure costs described in Section 37.3(a)(6) above, which charges shall be explained in writing on a form provided by the Board as described in Section 37.3(a)(6)(E);

(4) Which portion of the rent increase reflects the amortization of the RAP loan, as described in Section 37.3(a)(7) above.

(5) Nonconforming Rent Increases. Any rent increase which does not conform with the provisions of this Section shall be null and void.

(6) With respect to rental units occupied by recipients of tenant-based rental assistance, the notice requirements of this Subsection (b) shall be required in addition to any notice required as part of the tenant-based rental assistance program.

(c) Initial Rent Limitation for Subtenants. A tenant who subleases his or her rental unit may charge no more rent upon initial occupancy of the subtenant or subtenants than that rent which the tenant is currently paying to the landlord.

(d) Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50. et seq.) Consistent with the Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50. et seq.) and regardless of whether otherwise provided under Chapter 37:

(1) Property Owner Rights to Establish Initial and All Subsequent Rental Rates for Separately Alienable Parcels.

(A) An owner or residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit which is alienable separate from the title to any other dwelling unit or is a subdivided interest in a subdivision as specified in subdivision (b), (d), or (f) of Section 11004.5 of the California Business and Professions Code. The owner"s right to establish subsequent rental rates under this paragraph shall not apply to a dwelling or unit where the preceding tenancy has been terminated by the owner by notice pursuant to California Civil Code Section 1946 or has been terminated upon a change in the terms of the tenancy noticed pursuant to California Civil Code Section 827; in such instances, the rent increase limitation provisions of Chapter 37 shall continue to apply for the duration of the new tenancy in that dwelling or unit.

(B) Where the initial or subsequent rental rates of a Subsection 37.3(d)(1)(A) dwelling or unit were controlled by the provisions of Chapter 37 on January 1, 1995, the following shall apply:

(i) A tenancy that was in effect on December 31, 1995, remains subject to the rent control provisions of this Chapter 37, and the owner may not otherwise establish the subsequent rental rates for that tenancy.

(ii) On or after January 1, 1999, an owner may establish the initial and all subsequent rental rates for any tenancy created on or after January 1, 1996.

(C) An owner"s right to establish subsequent rental rates under Subsection 37.3(d)(1) shall not apply to a dwelling or unit which contains serious health, safety, fire or building code violations, excluding those caused by disasters, for which a citation has been issued by the appropriate governmental agency and which has remained unabated for six months or longer preceding the vacancy.

(2) Conditions for Establishing the Initial Rental Rate Upon Sublet or Assignment. Except as identified in this Subsection 37.3(d)(2), nothing in this Subsection or any other provision of law of the City and County of San Francisco shall be construed to preclude express establishment in a lease or rental agreement of the rental rates to be applicable in the event the rental unit subject thereto is sublet, and nothing in this Subsection shall be construed to impair the obligations of contracts entered into prior to January 1, 1996, subject to the following:

(A) Where the original occupant or occupants who took possession of the dwelling or unit pursuant to the rental agreement with the owner no longer permanently reside there, an owner may increase the rent by any amount allowed by this Subsection to a lawful sublessee or assignee who did not reside at the dwelling or unit prior to January 1, 1996. However, such a rent increase shall not be permitted while:

(i) The dwelling or unit has been cited in an inspection report by the appropriate governmental agency as containing serious health, safety, fire, or building code violations, as defined by Section 17920.3 of the California Health and Safety Code, excluding any violation caused by a disaster; and,

(ii) The citation was issued at least 60 days prior to the date of the vacancy: and,

(iii) The cited violation had not been abated when the prior tenant vacated and had remained unabated for 60 days or for a longer period of time. However, the 60-day time period may be extended by the appropriate governmental agency that issued the citation.

(B) This Subsection 37.3(d)(2) shall not apply to partial changes in occupancy of a dwelling or unit where one or more of the occupants of the premises, pursuant to the agreement with the owner provided for above (37.3(d)(2)), remains an occupant in lawful possession of the dwellings or unit, or where a lawful sublessee or assignee who resided at the dwelling or unit prior to January 1, 1996, remains in possession of the dwelling or unit. Nothing contained in this Subsection 37.3(d)(2) shall be construed to enlarge or diminish an owner"s right to withhold consent to a sublease or assignment.

(C) Acceptance of rent by the owner shall not operate as a waiver or otherwise prevent enforcement of a covenant prohibiting sublease or assignment or as a waiver of an owner"s rights to establish the initial rental rate unless the owner has received written notice from the tenant that is party to the agreement and thereafter accepted rent.

(3) Termination or Nonrenewal of a Contract or Recorded Agreement with a Government Agency Limiting Rent. An owner who terminates or fails to renew a contract or recorded agreement with a governmental agency that provides for a rent limitation to a qualified tenant, shall be subject to the following:

(A) The tenant(s) who were beneficiaries of the contract or recorded agreement shall be given at least 90 days" written notice of the effective date of the termination and shall not be obligated to pay more than the tenant"s portion of the rent, as calculated under that contract or recorded agreement, for 90 days following receipt of the notice of termination or nonrenewal.

(B) The owner shall not be eligible to set an initial rent for three years following the date of the termination or nonrenewal of the contract or agreement.

(C) The rental rate for any new tenancy established during the three-year period in that vacated dwelling or unit shall be at the same rate as the rent under the terminated or nonrenewed contract or recorded agreement, plus any increases authorized under this Chapter 37 after the date of termination/non renewal.

(D) The provisions of Subsections 37.3(d)(3)(B) and (C) shall not apply to any new tenancy of 12 months or more duration established after January 1, 2000, pursuant to the owner"s contract or recorded agreement with a governmental agency that provides for a rent limitation to a qualified tenant unless the prior vacancy in that dwelling or unit was pursuant to a nonrenewed or canceled contract or recorded agreement with a governmental agency that provides for a rent limitation to a qualified tenant.

(4) Subsection 37.3(d) does not affect the authority of the City and County of San Francisco to regulate or monitor the basis or grounds for eviction.

(5) This Subsection 37.3(d) is intended to be and shall be construed to be consistent with the Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50. et seq.) (e) Effect of Deferred Maintenance on Passthroughs for Lead Remediation Techniques.

(1) When lead hazards, which have been remediated or abated pursuant to San Francisco Health Code Article 26, are also violations of State or local housing health and safety laws, the costs of such work shall not be passed through to tenants as either a capital improvement or an operating and maintenance expense if the Administrative Law Judge finds that the deferred maintenance, as defined herein, of the current or previous landlord caused or contributed to the existence of the violation of law.

(2) In any unit occupied by a lead-poisoned child and in which there exists a lead hazard, as defined in San Francisco Health Code Article 26, there shall be a rebuttable presumption that violations of State or local housing health and safety laws caused or created by deferred maintenance, caused or contributed to the presence of the lead hazards. If the landlord fails to rebut the presumption, that portion of the petition seeking a rent increase for the costs of lead hazard remediation or abatement shall be denied. If the presumption is rebutted, the landlord shall be entitled to a rent increase if otherwise justified by the standards set forth in this Chapter.

(3) For purposes of the evaluation of petitions for rent increases for lead remediation work, maintenance is deferred if a reasonable landlord under the circumstances would have performed, on a regular basis, the maintenance work required to keep the premises from being in violation of housing safety and habitability standards set forth in California Civil Code Section 1941 and the San Francisco Municipal Code. In order to prevail on a deferred maintenance defense, a tenant must show that the level of repair or remediation currently required would have been lessened had maintenance been performed in a more timely manner.

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Section 3. The San Francisco Administrative Code is hereby amended by amending Section 37.7, to read as follows:

SEC. 37.7. CERTIFICATION OF RENTAL INCREASES FOR CAPITAL IMPROVEMENTS, REHABILITATION WORK, AND ENERGY CONSERVATION MEASURES IMPROVEMENTS, AND RENEWABLE ENERGY IMPROVEMENTS.

(a) Authority. In accordance with such guidelines as the Board shall establish, the Board and designated Administrative Law Judges shall have the authority to conduct hearings in order to certify rental increases to the extent necessary to amortize the cost of capital improvements, rehabilitations, and energy conservation measures improvements, and renewable energy improvements. Costs determined to be attributable to such work and improvements shall be amortized over a period which is fair and reasonable for the type and the extent of the work and improvements, and which will provide an incentive to landlords to maintain, improve and renovate their properties while at the same time protecting tenants from excessive rent increases. Costs attributable to routine repair and maintenance shall not be certified.

(b) Requirements for Certification. The Board and designated Administrative Law Judges may only certify the costs of capital improvements, rehabilitation, and energy conservation measures improvements, and renewable energy improvements, where the following criteria are met:

(1) The landlord completed capital improvements or rehabilitation on or after April 15, 1979, or the landlord completed installation of energy conservation measures on or after July 24, 1982, and has filed a proof of compliance with the Bureau of Building Inspection in accordance with the requirements of Section 1207(d) of the Housing Code;

(2) The landlord has not yet increased the rent or rents to reflect the cost of said work;

(3) The landlord has not been compensated for the work by insurance proceeds;

(4) The building is not subject to a RAP loan in a RAP area designated prior to July 1, 1977;

(5) The landlord files the certification petition no later than five years after the work has been completed. ;

(6) The cost is not for work required to correct a code violation for which a notice of violation has been issued and remained unabated for 90 days unless the landlord made timely good faith efforts within that 90-day period to commence and complete the work but was not successful in doing so because of the nature of the work or circumstances beyond the control of the landlord. The landlord"s failure to abate within the original 90-day period raises a rebuttable presumption that the landlord did not exercise timely good faith efforts.

(c) Amortization and Cost Allocation. The Board shall establish amortization periods and cost allocation formulas, in accordance with this Section 37.7. Costs shall be allocated to each unit according to the benefit of the work and improvements attributable to such unit.

(1) Applications Filed Before [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later]. The following provisions shall apply to all applications filed before [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later].

(A) Amortization Periods. Costs shall be amortized on a straight-line basis over a seven or ten-year period, depending upon which category described below most closely relates to the type of work or improvement and its estimated useful life.

(i) Schedule I - Seven-Year Amortization. The following shall be amortized over a seven-year period: Appliances, such as new stoves, disposals, washers, dryers and dishwashers; fixtures, such as garage door openers, locks, light fixtures, water heaters and blankets, shower heads, time clocks and hot water pumps; and other improvements, such as carpeting, linoleum, and exterior and interior painting of common areas. If the appliance is a replacement for which the tenant has already had the benefit, the cost will not be amortized as a capital improvement, but will be considered part of operating and maintenance expenses. Appliances may be amortized as capital improvements when: (1) part of a remodeled kitchen; (2) based upon an agreement between the tenant and landlord; and/or (3) it is a new service or appliance the tenant did not previously have.

(ii) Schedule II - Ten-Year Amortization. The following shall be amortized over a ten-year period: New foundation, new floor structure, new ceiling or walls - new sheetrock, new plumbing (new fixtures, or piping,) weather stripping, ceiling insulation, seals and caulking, new furnaces and heaters, refrigerators, new electrical wiring, new stairs, new roof structure, new roof cover, new window, fire escapes, central smoke detection system, new wood or tile floor cover, new sprinkler system, boiler replacement, air conditioning-central system, exterior siding or stucco, elevator rebuild, elevator cables, additions such as patios or decks, central security system, new doors, new mail boxes, new kitchen or bathroom cabinets, and sinks.

(B) Allowable Increase. One hundred percent (100%) of the certified costs of capital improvements, rehabilitation, and energy conservation improvements may be passed through to the tenants who benefit from such work and improvements. However no increase under this Subsection 37.7(c)(1) shall exceed, in a twelve-month period, ten percent (10%) of the tenant"s base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to this 10% or $30.00 limitation.

(2) Applications Filed On or After [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], For Qualified Energy Conservation Improvements and Renewable Energy Improvements. For Applications filed on or after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], the following provisions shall apply to certification of costs for qualified energy conservation improvements and renewable energy improvements.

(A) Amortization Periods. Costs shall be amortized on a straight-line basis over the period of time provided in 37.7(c)(2)(B)(i), or as determined pursuant to the procedure provided in 37.7(c)(2)(B)(ii).

(B) For purposes of this Subsection 37.7(c)(2), qualified energy conservation improvements and renewable energy improvements are:

(i) 100% of new EPA Energy-Star-compliant refrigerators where the refrigerator replaced is more than five years old and where the unit has separate metering, which costs shall be amortized on straight-line basis over a ten-year period; and,

(ii) Other improvements as may be approved by the Board of Supervisors upon recommendation of the Rent Board, following hearings and recommendations by the Commission on the Environment in an Energy Conservation Improvements and Renewable Energy Improvements List (List), as follows:

(I) The Commission on the Environment shall hold hearings to develop a list of recommended energy conservation improvements and renewable energy improvements that demonstrably benefit tenants in units that have separate electrical and/or natural gas metering. Such recommendations shall include consideration of cost effectiveness for tenants, appropriate amortization schedules, and permissible passthrough amounts that will encourage landlords to make such improvements.

(II) The Commission shall also consider whether the certification for each such improvement should include the entire improvement, or only that portion of the improvement cost directly attributable to energy conservation or renewable energy.

(III) The List shall take into consideration the variety and conditions of housing in the City.

(IV) The Commission on the Environment shall adopt the List at a public meeting, and shall transmit the List to the Rent Board no later than [six months after the effective date of this Ordinance].

(V) The Commission on the Environment shall periodically review and amend the List as warranted by changes in technology or conditions in the electricity and natural gas markets. Any amended List shall be transmitted forthwith to the Rent Board.

(VI) The Rent Board shall consider any such List received from the Commission on the Environment, and recommend appropriate Subsection 37.7(c)(2) amendments to the Board of Supervisors.

(3) Applications Filed On or After [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], For Seismic Work and Improvements Required by Law, and for Work and Improvements Required by Laws Enacted After [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later].

For applications filed on or after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later]:

(A) This Subsection 37.7(c)(3) shall apply to certification of costs for seismic work and improvements required by law.

(B) This Subsection 37.7(c)(3) shall apply to certification of costs for capital improvement, rehabilitation, energy conservation, and renewable energy work and improvements required by federal, state, or local laws enacted on or after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later]:

(C) Amortization Periods. Costs shall be amortized on a straight-line basis over a twenty-year period.

(D) Allowable Increase. One hundred percent (100%) of the certified costs of capital improvement, rehabilitation, energy conservation, and renewable energy work and improvements required by law may be passed through to the tenants who benefit from such work and improvements. Any rent increases under this Section 37.7(c)(3) shall not exceed, in a twelve-month period, a total of ten percent (10%) of the tenant"s base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to this 10% or $30.00 limitation.

(4) Applications Filed On or After [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], for Other Work and Improvements On Properties With Five Residential Units or Less. For applications filed on or after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], the following provisions shall apply to certification of all work and improvements for properties containing five residential units or less, with the exception of work and improvements costs certified for passthrough under Subsections 37.7(c)(2) or (3):

(A) Amortization Periods. Costs shall be amortized on a straight-line basis over a ten, fifteen or twenty-year period, depending upon which category described below most closely relates to the type of work or improvement and its estimated useful life.

(i) Schedule I - Ten-Year Amortization. The following shall be amortized over a ten-year period: New roof structure, new roof cover, electrical heaters, central security system, telephone entry systems, new wood frame windows, new mailboxes, weather-stripping, ceiling insulation, seals and caulking, central smoke detection system, new doors and skylights; appliances, such as new stoves, disposals, refrigerators, washers, dryers and dishwashers; fixtures, such as garage door openers, locks, light fixtures, water heaters and blankets, shower heads, time clocks and hot water pumps; and other improvements, such as carpeting, linoleum, and exterior and interior painting of common areas. If the appliance is a replacement for which the tenant has already had the benefit, the cost will not be amortized as a capital improvement but will be considered part of operating and maintenance expenses. Appliances may be amortized as capital improvements when: (1) part of a remodeled kitchen; (2) based upon an agreement between the tenant and landlord; and/or (3) it is a new service or appliance the tenant did not previously have.

(ii) Schedule II - Fifteen-Year Amortization. The following shall be amortized over a fifteen-year period: New floor structure, new ceiling or walls - new sheetrock, wood decks, new stairs, new furnaces and gas heaters, new thermal pane windows, new wood or tile floor cover, new sprinkler systems, air conditioning-central system, exterior siding or stucco, elevator rebuild, elevator cables, new kitchen or bathroom cabinets, and sinks.

(iii) Schedule III - Twenty-Year Amortization. The following shall be amortized over a twenty-year period: New foundation, new plumbing (new fixtures or piping), boiler replacement, new electrical wiring, fire escapes, concrete patios, iron gates, sidewalk replacement and chimneys.

(B) Allowable Increase. One hundred percent (100%) of the certified costs of capital improvement, rehabilitation, and energy conservation work and improvements may be passed through to the tenants who benefit from such work and improvements. However, no increase under this Subsection 37.7(c)(4) shall exceed, in a twelve-month period, five percent (5%) of the tenant"s base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years subject to this 5% or $30.00 limitation.

(5) For Applications Filed On or After [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], for Other Work and Improvements for Properties with Six or more Residential Units. For applications filed on or after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], the following provisions shall apply to certification of all work and improvements for properties containing six residential units or more, with the exception of work and improvements certified under Subsections 37.7(c)(2) or (3):

(A) Amortization Periods. Costs shall be amortized on a straight-line basis over a seven or ten-year period, depending upon which category described below most closely relates to the type of work or improvement and its estimated useful life.

(i) Schedule I - Seven-Year Amortization. The following shall be amortized over a seven-year period: Appliances, such as new stoves, disposals, washers, dryers and dishwashers; fixtures, such as garage door openers, locks, light fixtures, water heaters and blankets, shower heads, time clocks and hot water pumps; and other improvements, such as carpeting, linoleum, and exterior and interior painting of common areas. If the appliance is a replacement for which the tenant has already had the benefit, the cost will not be amortized as a capital improvement, but will be considered part of operating and maintenance expenses. Appliances may be amortized as capital improvements when: (1) part of a remodeled kitchen; (2) based upon an agreement between the tenant and landlord; and/or (3) it is a new service or appliance the tenant did not previously have.

(ii) Schedule II - Ten-Year Amortization. The following shall be amortized over a ten year period: New foundation, new floor structure, new ceiling or walls - new sheetrock, new plumbing (new fixtures, or piping) weather stripping, ceiling insulation, seals and caulking, new furnaces and heaters, refrigerators, new electrical wiring, new stairs, new roof structure, new roof cover, new window, fire escapes, central smoke detection system, new wood or tile floor cover, new sprinkler system, boiler replacement, air conditioning-central system, exterior siding or stucco, elevator rebuild, elevator cables, additions such as patios or decks, central security system, new doors, new mail boxes, new kitchen or bathroom cabinets, sinks, telephone entry system, skylights, iron gates, sidewalk replacement and chimneys.

(B) Allowable Increase.

(i) Only fifty percent (50%) of the costs certified under this Subsection 37.7(c)(5) may be passed through to the tenants who benefit from such work and improvements. However, no increase under this Subsection 37.7(c)(5) shall exceed, in a twelve-month period, ten percent (10%) of the tenant"s base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to this 10% or $30.00 limitation.

(ii) In the alternative, a tenant may elect to have one hundred percent (100%) of the costs certified under this Subsection 37.7(c)(5) passed through to the tenant. In that event no increase under this Subsection shall exceed, in a twelve-month period, five percent (5%) of the tenant"s base rent at the time the application was filed, and over the life of the tenancy the total increase shall never exceed fifteen percent (15%) of the tenant"s base rent at the time the application was filed. A tenant must elect this alternative by filing such an election with the Board on a form prescribed by the Board. An election may be filed at any time after the application is filed but no later than fifteen (15) calendar days after the Administrative Law Judge"s decision on the application is mailed to the tenant. In a unit with multiple tenants, the election form must be signed by a majority (more than 50%) in order for the election to be accepted. If a timely election is made after a decision has been issued, an addendum to the decision will be issued reflecting the tenant"s election.

(6) Development of On-Line Programs. The Board, in conjunction with the Department of Telecommunications and Information Services, shall design and implement on-line programs by September 1, 2003 to allow landlords and tenants to perform calculations concerning allowable increases for capital improvement, rehabilitation, energy conservation, and renewable energy work, and to compare average costs for work certified in prior decisions.

(d) Estimator. The Board or its Executive Director may hire an estimator where an expert appraisal is required.

(e) Filing Fee. The Board shall establish a filing fee based upon the cost of the capital improvement, rehabilitation, or energy conservation measures improvement, or renewable energy improvement being reviewed. Such fees will pay for the costs of an estimator. These fees shall be deposited in the Residential Rent Stabilization and Arbitration Fund pursuant to Section 10.117-88 of this Code.

(f) Application Procedures.

(1) Pre-Application Notice for Large Projects for Parcels or Buildings Containing Six or More Residential Units. If at any time prior to filing an application the landlord determines that the total cost of a project for a parcel or a building containing six or more residential units is reasonably expected to exceed $25,000 multiplied by the number of units on the parcel or in the building, the landlord shall immediately inform each tenant and the Rent Board in writing of the anticipated costs of the work. The landlord"s notice must occur within 30 days after such determination by the landlord.

(1 2) Filing. Landlords who seek to pass through the costs of capital improvements, rehabilitation, or energy conservation measures improvements, or renewable energy improvements, must file an application on a form prescribed by the Board. The application shall be accompanied by such supporting material as the Board shall prescribe. All applications must be submitted with the filing fee established by the Board.

For each petition totaling more than $25,000, in addition to the supporting material prescribed by the Board for all petitions, the applicant must either:

(A) Provide copies of competitive bids received for work and materials; or,

(B) Provide copies of time and materials billing for work performed by all contractors and subcontractors; or

(C) The applicant must pay the cost of an estimator hired by the Board.

(2 3) Filing Date. Applications must be filed prior to the mailing or delivery of legal notice of a rent increase to the tenants of units for which the landlord seeks certification and in no event more than five years after the work has been completed.

(3 4) Effect of Filing Application. Upon the filing of the application, the requested increase will be inoperative until such time as the Administrative Law Judge makes findings of fact at the conclusion of the certification hearing.

(4 5) Notice to Parties. The Board shall calendar the application for hearing before a designated Administrative Law Judge and shall give written notice of the date to the parties at least 10 days prior to the hearing.

(g) Certification Hearings.

(1) Time of Hearing. The hearing shall be held within 45 days of the filing of the application.

(2) Consolidation. To the greatest extent possible, certification hearings with respect to a given building shall be consolidated. Where a landlord and/or tenant has filed a petition for hearing based upon the grounds and under the procedure set forth in Section 37.8, the Board may, in its discretion, consolidate certification hearings with hearings on Section 37.8 petitions.

(3) Conduct of Hearing. The hearing shall be conducted by an Administrative Law Judge designated by the Board. Both parties may offer such documents, testimony, written declarations or other evidence as may be pertinent to the proceedings. Burden of proof is on the landlord. A record of the proceedings must be maintained for purposes of appeal.

(4) Determination of the Administrative Law Judge. In accordance with the Board"s amortization schedules and cost allocation formulas, the Administrative Law Judge shall make findings as to whether or not the proposed rent increases are justified based upon the following considerations:

(A) The application and its supporting documentation.

(B) Evidence presented at the hearing establishing both the extent and the cost of the work performed.

(C) Estimator"s report, where such report has been prepared.

(D) Any other such relevant factors as the Board shall specify in rules and regulations.

(5) Findings of Fact. The Administrative Law Judge shall make written findings of fact, copies of which shall be mailed within 30 days of the hearing.

(6) Payment or Refund of Rents to Implement Certification Decision. If the Administrative Law Judge finds that all or any portion of the heretofore inoperative rent increase is justified, the tenant shall be ordered to pay the landlord that amount. If the tenant has paid an amount to the landlord which the Administrative Law Judge finds unjustified, the Administrative Law Judge shall order the landlord to reimburse the tenant said amount.

(7) Finality of Administrative Law Judge"s Decision. The decision of the Administrative Law Judge shall be final unless the Board vacates his or her decision on appeal.

(8) Appeals. Either party may file an appeal of the Administrative Law Judge"s decision with the Board. Such appeals are governed by Section 37.8(f) below.

(h) Hardship Applications.

(1) A tenant may file a hardship application at any time on grounds of financial hardship with respect to any rent increase based on certified costs of capital improvements, rehabilitation work, energy conservation improvements, or renewable energy improvements. Payment of such rent increase(s) set forth in the hardship application shall be stayed for a period of 60 days from the date of filing, and the stay shall be extended if the Board accepts the application for hearing.

(2) Hardship applications shall be available in multiple languages.

(3) Multilingual notice of hardship application procedures shall be mailed with each Administrative Law Judge or Board decision.

(4) Within six months after [the effective date of this ordinance] the Rent Board shall implement a process for direct outreach to landlords and tenants whose primary language is not English, regarding availability and use of the hardship application procedure. Within three months of implementation the Board shall provide a report to the Board of Supervisors regarding this outreach program, describing the implementation process and any known results.

Section 4. The San Francisco Administrative Code is hereby amended by amending Section 37.8B, to read as follows:

SEC. 37.8B. EXPEDITED HEARING AND APPEAL PROCEDURES FOR CAPITAL IMPROVEMENTS RESULTING FROM SEISMIC WORK ON UNREINFORCED MASONRY BUILDINGS PURSUANT TO BUILDING CODE CHAPTERS 14 16B AND 15 16C WHERE LANDLORDS PERFORMED THE WORK WITH A UMB BOND LOAN.

This section contains the exclusive procedures for all hearings concerning certification of the above-described capital improvements. Landlords who perform such work without a UMB bond loan are subject to the capital improvement certification procedures set forth in Section 37.7 above.

(a) Requirements for Certification. The landlord must have completed the capital improvements in compliance with the requirements of Building Code Chapters 14 16B and 15 16C. The certification requirements of Section 37.7(b)(2) and (b)(3) are also applicable.

(b) Amortization and Cost Allocation; Interest. Costs shall be equally allocated to each unit and amortized over a 10 20-year period or the life of any loan acquired for the capital improvements, whichever is longer. Interest shall be limited to the actual interest rate charged on the loan and in no event shall exceed 10 percent per year.

(c) Eligible Items; Costs. Only those items required in order to comply with Building Code Chapters 14 16B and 15 16C may be certified. The allowable cost of such items may not exceed the costs set forth in the Mayor"s Office of Economic Planning and Development"s publication of estimated cost ranges for bolts plus retrofitting by building prototype and/or categories of eligible construction activities.

(d) Hearing Procedures. The application procedures of Section 37.7(f) apply to petitions for these expedited capital improvement hearings; provided, however, that the landlord shall pay no filing fee since the Board will not hire an estimator. The hearings shall be conducted according to the following conducted according to the following procedures:

(1) Time of Hearing; Consolidation; Conduct of Hearing. The hearing must be held within 21 days of the filing of the application. The consolidation and hearing conduct procedures of Section 37.7(g)(2) and (g)(3) apply.

(2) Determination of Administrative Law Judge. In accordance with the requirements of this section, the Administrative Law Judge shall make findings as to whether or not the proposed rent increases are justified based upon the following considerations:

(A) The application and its supporting documentation;

(B) Evidence presented at the hearing establishing both the extent and the cost of the work performed; and

(C) The Mayor"s Office of Planning and Economic Development"s bolts plus cost range publication; and

(D) Tenant objections that the work has not been completed; and

(E) Any other such relevant factors as the Board shall specify in rules and regulations.

(3) Findings of Fact; Effect of Decision. The Administrative Law Judge shall make written findings of fact, copies of which shall be mailed within 21 days of the hearing. The decision of the Administrative Law Judge is final unless the Board vacates it on appeal.

(e) Appeals. Either party may appeal the Administrative Law Judge"s decisions in accordance with the requirements of Section 37.8(f)(1), (f)(2) and (f)(3). The Board shall decide whether or not to accept an appeal within 21 days.

(1) Time of Appeal Hearing; Notice to Parties; Record; Conduct of Hearing. The appeal procedures of Section 37.8(f)(5), (f)(6), (f)(7), (f)(8) and (f)(9) apply; provided, however, that the Board"s decision shall be rendered within 20 days of the hearing.

(2) Rent Increases. A landlord may not impose any rent increase approved by the Board on appeal without at least 60 days" notice to the tenants.

APPROVED AS TO FORM:

DENNIS J. HERRERA, City Attorney

By: ____________________

MARIE CORLETT BLITS

Deputy City Attorney

Supervisor Daly's Eviction Legislation as Proposed

[Rent Ordinance amendments providing additional protection to tenants subject to Ellis Act and other eviction notices, including recordation of owner-move-in notices, future use restrictions on vacated units, waiver protections, prohibiting settlement bars to cooperation with governmental entities, and notice of evictions to buyers; and conformation to state law re misdemeanor violations.]

Ordinance amending the Rent Ordinance (Administrative Code Chapter 37, Residential Rent Stabilization and Arbitration Ordinance) by amending Sections 37.9, 37.9B and 37.10A to provide additional protections to tenants, and to conform to state law regarding misdemeanor violations, as follows: (1) Require the Rent Board to record owner move-in eviction notices with the County Recorder; (2) Require any eviction notices to be in writing and filed with the Rent Board; (3) Subject vacated units to the future use restrictions stated in the Rent Ordinance, regardless of any agreement made between the landlord and the vacating tenant; (4) Require a tenant to be represented by independent counsel in a judicially court-supervised settlement agreement, in order to waive any tenant rights under the Rent Ordinance; (5) Prohibit settlement agreement clauses that bar an evicted tenant from cooperation with a governmental investigation or proceeding; (6) Require the seller of a property to give written notice to the buyer disclosing the reason legal ground(s) for the most recent termination of the tenancy for every each residential unit to be delivered vacant at the close of escrow; and (7) Conform misdemeanor provisions to state law ($1,000 fine plus possible imprisonment in County Jail for up to six months).

Note: Additions are single-underline italics Times New Roman font;

deletions are strikethrough italics Times New Roman font.

Board amendment additions are double underlined Arial font;

Board amendment deletions are strikethrough Arial font.

Be it ordained by the People of the City and County of San Francisco:

Section 1. The San Francisco Administrative Code is hereby amended by amending Section 37.9, to read as follows:

SEC. 37.9. EVICTIONS.

Notwithstanding Section 37.3, this Section shall apply as of August 24, 1980, to all landlords and tenants of rental units as defined in Section 37.2(r).

(a) A landlord shall not endeavor to recover possession of a rental unit unless:

(1) The tenant:

(A) Has failed to pay the rent to which the landlord is lawfully entitled under the oral or written agreement between the tenant and landlord:

(i) Except that a tenant"s nonpayment of a charge prohibited by Section 919.1 of the Police Code shall not constitute a failure to pay rent; and

(ii) Except that, commencing August 10, 2001, to and including February 10, 2003, a landlord shall not endeavor to recover or recover possession of a rental unit for failure of a tenant to pay that portion of rent attributable to a capital improvement passthrough certified pursuant to a decision issued after April 10, 2000, where the capital improvement passthrough petition was filed prior to August 10, 2001, and a landlord shall not impose any late fee(s) upon the tenant for such non-payment of capital improvement costs; or

(B) Habitually pays the rent late; or

(C) Gives checks which are frequently returned because there are insufficient funds in the checking account; or

(2) The tenant has violated a lawful obligation or covenant of tenancy other than the obligation to surrender possession upon proper notice or other than an obligation to pay a charge prohibited by Police Code Section 919.1, and failure to cure such violation after having received written notice thereof from the landlord, provided further that notwithstanding any lease provision to the contrary, a landlord shall not endeavor to recover possession of a rental unit as a result of subletting of the rental unit by the tenant if the landlord has unreasonably withheld the right to sublet following a written request by the tenant, so long as the tenant continues to reside in the rental unit and the sublet constitutes a one-for-one replacement of the departing tenant(s). If the landlord fails to respond to the tenant in writing within fourteen (14) days of receipt of the tenant"s written request, the tenant"s request shall be deemed approved by the landlord; or

(3) The tenant is committing or permitting to exist a nuisance in, or is causing substantial damage to, the rental unit, or is creating a substantial interference with the comfort, safety or enjoyment of the landlord or tenants in the building, and the nature of such nuisance, damage or interference is specifically stated by the landlord in writing as required by Section 37.9(c); or

(4) The tenant is using or permitting a rental unit to be used for any illegal purpose; or

(5) The tenant, who had an oral or written agreement with the landlord which has terminated, has refused after written request or demand by the landlord to execute a written extension or renewal thereof for a further term of like duration and under such terms which are materially the same as in the previous agreement; provided, that such terms do not conflict with any of the provisions of this Chapter; or

(6) The tenant has, after written notice to cease, refused the landlord access to the rental unit as required by State or local law; or

(7) The tenant holding at the end of the term of the oral or written agreement is a subtenant not approved by the landlord; or

(8) The landlord seeks to recover possession in good faith, without ulterior reasons and with honest intent:

(i) For the landlord"s use or occupancy as his or her principal residence for a period of at least 36 continuous months;

(ii) For the use or occupancy of the landlord"s grandparents, grandchildren, parents, children, brother or sister, or the landlord"s spouse, or the spouses of such relations, as their principal place of residency for a period of at least 36 months, in the same building in which the landlord resides as his or her principal place of residency, or in a building in which the landlord is simultaneously seeking possession of a rental unit under Section 37.9(a)(8)(i). For purposes of this Section 37.9(a)(8)(ii), the term spouse shall include domestic partners as defined in San Francisco Administrative Code Sections 62.1 through 62.8.

(iii) For purposes of this Section 37.9(a)(8) only, as to landlords who become owners of record of the rental unit on or before February 21, 1991, the term "landlord" shall be defined as an owner of record of at least 10 percent interest in the property or, for Section 37.9(a)(8)(i) only, two individuals registered as domestic partners as defined in San Francisco Administrative Code Sections 62.1 through 62.8 whose combined ownership of record is at least 10 percent. For purposes of this Section 37.9(a)(8) only, as to landlords who become owners of record of the rental unit after February 21, 1991, the term "landlord" shall be defined as an owner of record of at least 25 percent interest in the property or, for Section 37.9(a)(8)(i) only, two individuals registered as domestic partners as defined in San Francisco Administrative Code Sections 62.1 through 62.8 whose combined ownership of record is at least 25 percent.

(iv) A landlord may not recover possession under this Section 37.9(a)(8) if a comparable unit owned by the landlord is already vacant and is available, or if such a unit becomes vacant and available before the recovery of possession of the unit. If a comparable unit does become vacant and available before the recovery of possession, the landlord shall rescind the notice to vacate and dismiss any action filed to recover possession of the premises. Provided further, if a noncomparable unit becomes available before the recovery of possession, the landlord shall offer that unit to the tenant at a rent based on the rent that the tenant is paying, with upward or downward adjustments allowed based upon the condition, size, and other amenities of the replacement unit. Disputes concerning the initial rent for the replacement unit shall be determined by the Rent Board. It shall be evidence of a lack of good faith if a landlord times the service of the notice, or the filing of an action to recover possession, so as to avoid moving into a comparable unit, or to avoid offering a tenant a replacement unit.

(v) It shall be rebuttably presumed that the landlord has not acted in good faith if the landlord or relative for whom the tenant was evicted does not move into the rental unit within three months and occupy said unit as that person"s principal residence for a minimum of 36 continuous months.

(vi) Once a landlord has successfully recovered possession of a rental unit pursuant to Section 37.9(a)(8)(i), then no other current or future landlords may recover possession of any other rental unit in the building under Section 37.9(a)(8)(i). It is the intention of this Section that only one specific unit per building may be used for such occupancy under Section 37.9(a)(8)(i) and that once a unit is used for such occupancy, all future occupancies under Section 37.9(a)(8)(i) must be of that same unit, provided that a landlord may file a petition with the Rent Board, or at the landlord"s option, commence eviction proceedings, claiming that disability or other similar hardship prevents him or her from occupying a unit which was previously occupied by the landlord.

(vii) If any provision or clause of this amendment to Section 37.9(a)(8) or the application thereof to any person or circumstance is held to be unconstitutional or to be otherwise invalid by any court of competent jurisdiction, such invalidity shall not affect other chapter provisions, and clauses of this Chapter are held to be severable; or

(9) The landlord seeks to recover possession in good faith in order to sell the unit in accordance with a condominium conversion approved under the San Francisco subdivision ordinance and does so without ulterior reasons and with honest intent; or

(10) The landlord seeks to recover possession in good faith in order to demolish or to otherwise permanently remove the rental unit from housing use and has obtained all the necessary permits on or before the date upon which notice to vacate is given, and does so without ulterior reasons and with honest intent; provided that a landlord who seeks to demolish an unreinforced masonry building pursuant to Building Code Chapters 14 and 15 must provide the tenant with the relocation assistance specified in Section 37.9A(f) below prior to the tenant"s vacating the premises; or

(11) The landlord seeks in good faith to remove temporarily the unit from housing use in order to be able to carry out capital improvements or rehabilitation work and has obtained all the necessary permits on or before the date upon which notice to vacate is given, and does so without ulterior reasons and with honest intent. Any tenant who vacates the unit under such circumstances shall have the right to reoccupy the unit at the prior rent adjusted in accordance with the provisions of this Chapter. The tenant will vacate the unit only for the minimum time required to do the work. On or before the date upon which notice to vacate is given, the landlord shall advise the tenant in writing that the rehabilitation or capital improvement plans are on file with the Central Permit Bureau of the Department of Building Inspection and that arrangements for reviewing such plans can be made with the Central Permit Bureau. In addition to the above, no landlord shall endeavor to recover possession of any unit subject to a RAP loan as set forth in Section 37.2(m) of this Chapter except as provided in Section 32.69 of the San Francisco Administrative Code. The tenant shall not be required to vacate pursuant to this Section 37.9(a)(11), for a period in excess of three months; provided, however, that such time period may be extended by the Board or its Administrative Law Judges upon application by the landlord. The Board shall adopt rules and regulations to implement the application procedure. Any landlord who seeks to recover possession under this Section 37.9(a)(11) shall pay the tenant actual costs up to $1,000 for moving and relocation expenses not less than 10 days prior to recovery of possession; or

(12) The landlord seeks to recover possession in good faith in order to carry out substantial rehabilitation, as defined in Section 37.2(s), and has obtained all the necessary permits on or before the date upon which notice to vacate is given, and does so without ulterior reasons and with honest intent. Notwithstanding the above, no landlord shall endeavor to recover possession of any unit subject to a RAP loan as set forth in Section 37.2(m) of this Chapter except as provided in Section 32.69 of the San Francisco Administrative Code; or

(13) The landlord wishes to withdraw from rent or lease all rental units within any detached physical structure and, in addition, in the case of any detached physical structure containing three or fewer rental units, any other rental units on the same lot, and complies in full with Section 37.9A with respect to each such unit; provided, however, that a unit classified as a residential unit under Chapter 41 of this Code which is vacated under this Section 37.9(a)(13) may not be put to any use other than that of a residential hotel unit without compliance with the provisions of Section 41.9 of this Code; or

(14) The landlord seeks in good faith to temporarily recover possession of the unit for less than 30 days solely for the purpose of effecting lead remediation or abatement work, as required by San Francisco Health Code Article 26. The relocation rights and remedies, established by San Francisco Administrative Code Chapter 72, including but not limited to, the payment of financial relocation assistance, shall apply to evictions under this Section 37.9(a)(14).

(b) A landlord who resides in the same rental unit with his or her tenant may evict said tenant without just cause as required under Section 37.9(a) above.

(c) A landlord shall not endeavor to recover possession of a rental unit unless at least one of the grounds enumerated in Section 37.9(a) or (b) above is the landlord"s dominant motive for recovering possession and unless the landlord informs the tenant in writing on or before the date upon which notice to vacate is given of the grounds under which possession is sought and that advice regarding the notice to vacate is available from the Residential Rent Stabilization and Arbitration Board, before endeavoring to recover possession. A copy of all notices to vacate except three-day notices to vacate or pay rent and a copy of any additional written documents informing the tenant of the grounds under which possession is sought shall be filed with the Board within 10 days following service of the notice to vacate. The District Attorney shall determine whether the units set forth on the list compiled in accordance with Section 37.6(k) are still being occupied by the tenant who succeeded the tenant upon whom the notice was served. In cases where the District Attorney determines that Section 37.9(a)(8) has been violated, the District Attorney shall take whatever action he deems appropriate under this Chapter or under State law.

(d) No landlord may cause a tenant to quit involuntarily or threaten to bring any action to recover possession, or decrease any services, or increase the rent, or take any other action where the landlord"s dominant motive is retaliation for the tenant"s exercise of any rights under the law. Such retaliation shall be a defense to any action to recover possession. In an action to recover possession of a rental unit, proof of the exercise by the tenant of rights under the law within six months prior to the alleged act of retaliation shall create a rebuttable presumption that the landlord"s act was retaliatory.

(e) It shall be unlawful for a landlord or any other person who wilfully assists the landlord to endeavor to recover possession or to evict a tenant except as provided in Section 37.9(a) and (b). Any person endeavoring to recover possession of a rental unit from a tenant or evicting a tenant in a manner not provided for in Section 37.9(a) or (b) without having a substantial basis in fact for the eviction as provided for in Section 37.9(a) shall be guilty of a misdemeanor and shall be subject, upon conviction, to the fines and penalties set forth in Section 37.10A. Any waiver by a tenant of rights under this Chapter except as provided in Section 37.10A(g), shall be void as contrary to public policy.

(f) Whenever a landlord wrongfully endeavors to recover possession or recovers possession of a rental unit in violation of Sections 37.9 and/or 37.10A as enacted herein, the tenant or Board may institute a civil proceeding for injunctive relief, money damages of not less than three times actual damages, (including damages for mental or emotional distress), and whatever other relief the court deems appropriate. In the case of an award of damages for mental or emotional distress, said award shall only be trebled if the trier of fact finds that the landlord acted in knowing violation of or in reckless disregard of Section 37.9 or 37.10A herein. The prevailing party shall be entitled to reasonable attorney"s fees and costs pursuant to order of the court. The remedy available under this Section 37.9(f) shall be in addition to any other existing remedies which may be available to the tenant or the Board.

(g) The provisions of this Section 37.9 shall apply to any rental unit as defined in Sections 37.2(r)(4)(A) and 37.2(r)(4)(B), including where a notice to vacate/quit any such rental unit has been served as of the effective date of this Ordinance No. 250-98 but where any such rental unit has not yet been vacated or an unlawful detainer judgment has not been issued as of the effective date of this Ordinance No. 250-98.

(h) With respect to rental units occupied by recipients of tenant-based rental assistance, the notice requirements of this Section 37.9 shall be required in addition to any notice required as part of the tenant-based rental assistance program, including but not limited to the notice required under 24 CFR Section 982.310(e)(2)(ii).

(i) The following additional provisions shall apply to a landlord who seeks to recover a rental unit by utilizing the grounds enumerated in Section 37.9(a)(8):

(1) A landlord may not recover possession of a unit from a tenant under Section 37.9(a)(8) if the landlord has or receives notice, any time before recovery of possession, that any tenant in the rental unit:

(A) Is 60 years of age or older and has been residing in the unit for 10 years or more; or

(B) Is disabled within the meaning of Section 37.9(i)(1)(B)(i) and has been residing in the unit for 10 years or more, or is catastrophically ill within the meaning of Section 37.9(i)(1)(B)(ii) and has been residing in the unit for five years or more:

(i) A "disabled" tenant is defined for purposes of this Section 37.9(i)(1)(B) as a person who is disabled or blind within the meaning of the federal Supplemental Security Income/California State Supplemental Program (SSI/SSP), and who is determined by SSI/SSP to qualify for that program or who satisfies such requirements through any other method of determination as approved by the Rent Board;

(ii) A "catastrophically ill" tenant is defined for purposes of this Section 37.9(i)(1)(B) as a person who is disabled as defined by Section 37.9(i)(1)(B)(i), and who is suffering from a life threatening illness as certified by his or her primary care physician.

(2) The foregoing provisions of Sections 37.9(i)(1)(A) and (B) shall not apply where there is only one rental unit owned by the landlord in the building, or where each of the rental units owned by the landlord in the same building where the landlord resides (except the unit actually occupied by the landlord) is occupied by a tenant otherwise protected from eviction by Sections 37.9(i)(1)(A) or (B) and where the landlord"s qualified relative who will move into the unit pursuant to Section 37.9(a)(8) is 60 years of age or older.

(3) The provisions established by this Section 37.9(i) include, but are not limited to, any rental unit where a notice to vacate/quit has been served as of the date this amendment takes effect but where the rental unit has not yet been vacated or an unlawful detainer judgment has not been issued.

(4) Within 30 days of personal service by the landlord of a written request, or, at the landlord"s option, a notice of termination of tenancy under Section 37.9(a)(8), the tenant must submit a statement, with supporting evidence, to the landlord if the tenant claims to be a member of one of the classes protected by Section 37.9(i). The written request or notice shall contain a warning that a tenant"s failure to submit a statement within the 30 day period shall be deemed an admission that the tenant is not protected by Section 37.9(i). The landlord shall file a copy of the request or notice with the Rent Board within 10 days of service on the tenant. A tenant"s failure to submit a statement within the 30 day period shall be deemed an admission that the tenant is not protected by Section 37.9(i). A landlord may challenge a tenant"s claim of protected status either by requesting a hearing with the Rent Board or, at the landlord"s option, through commencement of eviction proceedings, including service of a notice of termination of tenancy. In the Rent Board hearing or the eviction action, the tenant shall have the burden of proof to show protected status. No civil or criminal liability under Section 37.9(e) or (f) shall be imposed upon a landlord for either requesting or challenging a tenant"s claim of protected status.

(5) This Section 37.9(i) is severable from all other sections and shall be of no force or effect if any temporary moratorium on owner/relative evictions adopted by the Board of Supervisors after June 1, 1998 and before October 31, 1998 has been invalidated by the courts in a final decision.

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Section 2. The San Francisco Administrative Code is hereby amended by amending Section 37.9B, to read as follows:

Sec. 37.9B. TENANT RIGHTS IN EVICTIONS UNDER SECTION 37.9(a)(8).

(a) Any rental unit which a tenant vacates after receiving a notice to quit based on Section 37.9(a)(8), and which is subsequently no longer occupied as a principal residence by the landlord or the landlord"s grandparent, parent, child, grandchild, brother, sister, or the landlord"s spouse, or the spouses of such relations must, if offered for rent during the three-year period following service of the notice to quit under Section 37.9(a)(8), be rented in good faith at a rent not greater than at which would have been the rent had the tenant who had been required to vacate remained in continuous occupancy and the rental unit remained subject to this Chapter. If it is asserted that a rent increase could have taken place during the occupancy of the rental unit by the landlord if the rental unit had been subjected to this Chapter, the landlord shall bear the burden of proving that the rent could have been legally increased during the period. If it is asserted that the increase is based in whole or in part upon any grounds other than that set forth in Section 37.3(a)(1), the landlord must petition the Rent Board pursuant to the procedures of this Chapter. Displaced tenants shall be entitled to participate in and present evidence at any hearing held on such a petition. Tenants displaced pursuant to Section 37.9(a)(8) shall make all reasonable efforts to keep the Rent Board apprised of their current address. The Rent Board shall provide notice of any proceedings before the Rent Board to the displaced tenant at the last address provided by the tenant. No increase shall be allowed on account of any expense incurred in connection with the displacement of the tenant.

(b) Any landlord who, within three years of the date of service of the notice to quit, offers for rent or lease any unit in which the possession was recovered pursuant to Section 37.9(a)(8) shall first offer the unit for rent or lease to the tenants displaced in the same manner as provided for in Sections 37.9A(c) and (d).

(c) In addition to complying with the requirements of Section 37.9(a)(8), Aan owner who endeavors to recover possession under Section 37.9(a)(8) shall, in addition to complying with the requirements of Section 37.9(c), inform the tenant of the following information in writing of the following and file any written documents informing the tenant of the following a copy with the Rent Board within 10 days after service of the notice to vacate, together with a copy of the notice to vacate and proof of service upon the tenant;

(1) The identity and percentage of ownership of all persons holding a full or partial percentage ownership in the property;

(2) The dates the percentages of ownership were recorded;

(3) The name(s) of the landlord endeavoring to recover possession and, if applicable, the name(s) and relationship of the relative(s) for whom possession is being sought and a description of the current residence of the landlord or relative(s);

(4) A description of all residential properties owned, in whole or in part, by the landlord and, if applicable, a description of all residential properties owned, in whole or in part, by the landlord"s grandparent, parent, child, grandchild, brother, or sister for whom possession is being sought;

(5) The current rent for the unit and a statement that the tenant has the right to re-rent the unit at the same rent, as adjusted by Section 37.9B(a) above;

(6) The contents of Section 37.9B, by providing a copy of same; and

(7) The right the tenant(s) may have to relocation costs and the amount of those relocation costs.

(d) Each individual tenant of any rental unit in a building containing two or more units who receives a notice to quit based upon Section 37.9(a)(8), and who has resided in the unit for 12 or more months, in addition to all rights under any other provision of law, shall be entitled to receive relocation expenses of $1,000 from the owner, $500 of which shall be paid at the time of the service of the notice to vacate, and $500 of which shall be paid when the tenant vacates. An owner who pays relocation costs as required by this subsection in conjunction with a notice to quit need not pay relocation costs with any further notices to quit for the same unit that are served within 180 days of the notice that included the required relocation payment. The relocation costs contained herein are separate from any security or other refundable deposits as defined in California Code Section 1950.5. Further, payment or acceptance of relocation costs shall not waive any other rights a tenant may have under law.

(e) Within 30 days after the effective date ofa written notice to vacate thatis filed with the Board as required byunderSection 37.9B(c) the Board shall record a notice of constraints with the County Recorder identifying each unit on the property that is the subject of the Section 37.9B(c) notice to vacate,stating the nature and dates of applicable restrictions under Sections 37.9(a)(8) and 37.9B. If a notice of constraints is recorded but the tenant does not vacate the unit, the landlord may apply to the Board for a rescission of the recorded notice of constraints.

Section 3. The San Francisco Administrative Code is hereby amended by amending Section 37.10AB, to read as follows:

Sec. 37.10A. MISDEMEANORS, AND OTHER ENFORCEMENT PROVISIONS.

(a) It shall be unlawful for a landlord to increase rent or rents in violation of the decision of an Administrative Law Judge or the decision of the Board on appeal pursuant to the hearing and appeal procedures set forth in Section 37.8 of this Chapter. It shall further be unlawful for a landlord to charge any rent which exceeds the limitations of this Chapter. Any person who increases rents in violation of such decisions or who charges excessive rents shall be guilty of a misdemeanor.

(b) It shall be unlawful for an landlord to refuse to rent or lease or otherwise deny to or withhold from any person any rental unit because the age of a prospective tenant would result in the tenant acquiring rights under this Chapter. Any person who refuses to rent in violation of this subsection shall, in addition to any other penalties provide by State or federal law, be guilty of a misdemeanor.

(c)Any person convicted of a misdemeanor hereunder shall be punishable by a fine of not more than $2,000 or by imprisonment in the County Jail for a period of not more than six months, or by both. Each violation of the decision of an Administrative Law Judge or the decision of the Board on appeal and each refusal to rent or denial of a rental unit as set forth above shall constitute a separate offense. It shall be unlawful for a landlord or for any person who willfully assists a landlord to request that a tenant move from a rental unit or to threaten to recover possession of a rental unit, either verbally or in writing, unless: (1) the landlord in good faith intends to recover said unit under one of the grounds enumerated in Section 37.9(a) or (b); and (2) within five days of any such request or threat the landlord serves the tenant with a written notice stating the particular ground under Section 37.9(a) or (b) that is the basis for the landlord"s intended recovery of possession of the unit.

(d) It shall be unlawful for a landlord or for any person who willfully assists a landlord to recover possession of a rental unit unless, prior to recovery of possession of the unit: (1) the landlord files a copy of the written notice required under Section 37.10A(c) with the Board together with any preceding warning or threat to recover possession, unless the particular ground for recovery is non-payment of rent; and (2) the landlord satisfies all requirements for recovery of the unit under Section 37.9(a) or (b).

(e) In any criminal or civil proceeding based on a violation of Section 37.10A(c) or 37.10A(d), the landlord"s failure to use a recovered unit for the Section 37.9(a) or (b) ground stated verbally or in writing to the tenant from whom the unit was recovered shall give rise to a presumption that the landlord did not have a good faith intention to recover the unit for the stated ground.

(f) If possession of a rental unit is recovered as the result of any written or verbal statement to the tenant that the landlord intends to recover the unit under one of the grounds enumerated in Section 37.9(a) or (b), the unit shall be subject to all restrictions set forth under this Chapter on units recovered for such stated purpose regardless of any agreement made between the landlord or the landlord"s agent and the tenant who vacated the recovered unit. Any unit vacated by a tenant within 120 days after receiving any written or verbal statement from the landlord stating that the landlord intends to recover the unit under Section 37.9(a) or (b), shall be rebuttably presumed to have been recovered by the landlord pursuant to the grounds identified in that written or verbal statement.

(g)Any waiver of rights by a tenant under this Chapter shall be void as contrary to public policy unless the tenant is represented by independent counsel and the waiver is approved in a judicially supervised settlement agreement.Except as provided in this subsectionIt itshall be unlawful for a landlord, or for any person who willfully assists a landlord, including the landlord"s attorney or legal representative, to seek or obtain a tenant"s waiver of rights under this Chapter except as provided in this Section, or to seek or obtain a tenant"s agreement not to cooperate with any investigation or proceeding by any administrative or law enforcement or other governmental agency under this Chapter, or to otherwise seek or obtain a tenant"s waiver of rights under this Chapter. Any waiver of rights by a tenant under this Chapter shall be void as contrary to public policy unless the tenant is represented by independent counsel and the waiver is approved in a Court-supervised settlement agreement, or by a retired judge of the California Superior Court sitting as a mediator or arbitrator by mutual agreement of the tenant represented by independent counsel and the landlord. Any settlement agreement shall identify the judge, mediator, or arbitrator reviewing the settlement, all counsel representing the parties, and any other information as required by the Board. The landlord shall file a signed copy of the settlement agreement with the Board within ten days of execution. Unless otherwise required by the Board, the copy of the agreement filed with the Board shall redact the amount of payments to be made to tenants.

(h) It shall be unlawful for a landlord to knowingly fail to disclose enter into a contract for the sale of any property consisting of two or more residential units without first disclosing in writing to the buyer , prior to entering into a contract for the sale of any property consisting of two or more residential units, the specific legal ground(s) for the termination of the tenancy of everyeachresidential unit to be delivered vacant at the close of escrow.

(i) Any person who violates Section 37.10A(a), (b), (c), (d), (g) or (h) is guilty of a misdemeanor and shall be punished by a mandatory fine of one thousand dollars ($1,000), and in addition to such fine may be punished by imprisonment in the County Jail for a period of not more than six months. Each violation shall constitute a separate offense.

Section 4. FINDINGS. The Board of Supervisors finds:

(a.) The District Attorney"s office reports that, while investigating illegal evictions, it has become aware that a landlord sometimes threatens to file an Ellis Act eviction notice in order to recover a rental unit from a tenant, without actually filing the notice. If the tenant vacates the unit in anticipation of receiving the notice, and the Ellis Act notice is not actually filed or recorded, the landlord can re-rent the unit at market rate without any of the consequences of an Ellis Act eviction.

(b.) The District Attorney"s office also reports that it has encountered cases where tenants subjected to owner move-in evictions or Ellis Act evictions waived their rights without any legal representation. signing settlement agreements stating that the landlord could re-rent the property at market rate. Some tenants subjected to owner move-in evictions signed agreements stating that the owner or his or her intended family member was not required to occupy the property. In some cases, these settlement agreements also barred the evicted tenant from cooperating with the Rent Board or the District Attorney"s office in the event of an administrative or criminal investigation or prosecution.

(c.) The District Attorney"s office further reports that prosecution of illegal evictions has been further hampered by post-eviction sale of properties, with no notice to the new buyers of the constraints on future use.

(d.) In order to address these issues identified by the District Attorney"s office, and in order to more effectively insure enforcement of the City"s Residential Rent Stabilization and Arbitration Ordinance (Administrative Code Chapter 37), the Board of Supervisors enacts the amendments set forth herein.

Section 5. SEVERABILITY. If any part or provision of this Ordinance, or the application thereof to any person or circumstance, is held invalid, the remainder of this Ordinance, including the application of such part or provision to other persons or circumstances, shall not be affected thereby and shall continue in full force and effect. To this end, provisions of this Ordinance are severable.

APPROVED AS TO FORM:

DENNIS J. HERRERA, City Attorney

By:

MARIE CORLETT BLITS

Deputy City Attorney

Supervisor Hall's Tenant Ownership Program for Everyone Proposed Legislation 3/ 28/02

SUPERVISOR HALL"S TENANTINITIATED HOME OWNERSHIP PROGRAM

Although the Rent Ordinance is not directly amended by the proposed legislation which was introduced on March 25th and is awaiting committee assignment (unknown at this time), Rent Ordinance provisions will still remain in effect for those units that opt for a life-time lease.

The text of the proposed legislation is provided below. The Rent Board provides the text as a convenience only. Questions concerning the legislation should be directed to the Supervisor"s office as this is not under the jurisdiction of the Rent Board.

[Tenant-Initiated Home Ownership Program for Everyone]

Ordinance amending the San Francisco Subdivision Code by adding Article 11, consisting of Sections 1399.1 through 1399.16 to permit the conversion of existing residential buildings to residential condominium or other ownership subject to certain requirements.

Note: Additions are single-underline italics Times New Roman; deletions are  strikethrough italics Times New Roman. Board amendment additions are double underlined. Board amendment deletions are strikethrough normal.

Be it ordained by the People of the City and County of San Francisco:

Section 1. FINDINGS. The Board of Supervisors of the City and County of San Francisco hereby finds and declares as follows:

A. The proposed amendments encourage and ensure the development of residential subdivisions consistent with the objectives of the California Subdivision Map Act and the San Francisco General Plan.

B. The City reasserts its policy, stated in section 1302(c)(2), of the San Francisco Subdivision Code, of promoting the meaningful expansion of homeownership opportunities for existing tenants and preventing the displacement of existing tenants by requiring a high degree of tenant intent to purchase their rental units as a condition of approval of applications for residential conversion.

C. The number of permitted condominium conversions is low compared to the current demand for home ownership in the City. It promotes the health, safety and welfare of residents to expand home ownership opportunities above and beyond the current limits while balancing this need for ownership housing against the displacement of tenants. The immediate effects on tenants of converting rental housing to condominiums can be minimized through a variety of mechanisms including the discouragement of evictions and the provision of life-time leases to existing tenants.

Section 2. The San Francisco Subdivision Code is hereby amended by adding Article 11,

consisting of Sections 1399.1 through 1399.16 to read as follows:

Article 11

TENANT- INITIATED HOME OWNERSHIP PROGRAM FOR EQUITY

Sec. 1399.1. PURPOSES. This Article 11 is enacted to establish an alternative method for subdividing parcels containing existing residential units. The conversions allowable under this Article 11 are intended (i) to promote the expansion of home ownership opportunities for existing tenants by creating opportunities for a substantial number of them to purchase their units, and (ii) to balance the interests of new home ownership opportunities with the need to protect tenants in place.

Sec. 1399.2. MODIFICATIONS TO CODE. This Article 11 is entirely new. It modifies the applicable provisions of this Code in the case of conversions that submit applications under Section 1399.8. The requirements and restrictions of Article 9 of this Code, including but not limited to the annual conversion limitation set forth in Section 1396, do not apply to conversions under this Article. The provisions of Sections 1332 (a), 1341 and 1385 of this Code do not apply to conversions under this Article.

Sec. 1399.3. DEFINITIONS APPLICABLE TO THIS ARTICLE. As used in this Article 11:

(a) "Application Packet" means the tentative map and other documents required under this Article to initiate the subdivision into condominiums or other form of common interest subdivision under this Article. The "date the Application Packet is submitted" is the date on which an Application Packet in first delivered to the San Francisco Department of Public Works in connection with a subdivision under this Article.

(b) "Code" means the San Francisco Subdivision Code.

(c) "Director" means the Director of the Department of Public Works.

(d) "Eligible purchaser" means a tenant or an owner who has continuously occupied a unit at the property for at least two years prior to the date the Application Packet is submitted and who occupies a unit in the property on the date the Application Packet is submitted. A person may qualify as an eligible purchaser only one time in a seven year period.

(e) "Housing Stock" means the total number of housing units reported as "San Francisco Housing Stock" in the "Housing Inventory" published by the Planning Department as it may be updated or republished from time to time.

(f) "Intent to Purchase" means a form indicating an eligible purchaser"s intent to purchase a unit in the form set forth in Section 1399.6(j).

(g) "Permitted Eviction" means an eviction on one of the following grounds:

(1) the tenant has failed to pay the rent to which the landlord is lawfully entitled under the oral or written agreement between the tenant and the landlord or habitually pays the rent late or gives checks which are frequently returned because there are insufficient funds in the checking account;

(2) the tenant has violated a lawful obligation or covenant of tenancy other than the obligation to surrender possession upon proper notice and failure to cure such violation after having received written notice thereof from the landlord, provided further that notwithstanding any lease provision to the contrary, a landlord shall not endeavor to recover possession of a rental unit as a result of subletting of the rental unit by the tenant if the landlord has unreasonably withheld the right to sublet following a written request by the tenant, so long as the tenant continues to reside in the rental unit and the sublet constitutes a one-for-one replacement of the departing tenant(s). If the landlord fails to respond to the tenant in writing within fourteen (14) days of receipt of the tenant"s written request, the tenant"s request shall be deemed approved by the landlord; or

(3) the tenant is committing or permitting to exist a nuisance in, or is causing substantial damage to, the rental unit, or is creating a substantial interference with the comfort, safety or enjoyment of the landlord or other tenants in the building, and the nature of such nuisance, damage or interference is specifically stated by the landlord in the written notice to quit to the tenant; or

(4) the tenant is using or permitting a rental unit to be used for any illegal purpose; or

(5) the tenant has, after written notice to cease, refused the landlord access to the rental unit as required by state or local law.

(h) "Owner" means a person, firm, corporation, limited liability company, partnership or association that owns at least a 10% record title interest in the property for which an Application Packet has been submitted.

(i) "Rent Board" and "Rent Ordinance" mean, respectively, the San Francisco Residential Rent Stabilization and Arbitration Board and the San Francisco Residential Rent Stabilization and Arbitration Ordinance, San Francisco Administrative Code Section 37.1 et seq.

(j) "Subdivider" means a person, firm, corporation, limited liability company, partnership or association that proposes to divide, divides or causes to be divided real property for himself or for others, and any successor in interest. Where a subdivider acts only as an agent for the owner, the term "subdivider" includes the owner where the context requires.

(k) "Tenant" means an individual residing in the property on the date the Application Packet is submitted who has an express oral or written agreement directly with the owner.

(l) "Unit" means a legal residential dwelling unit.

(m) Other Definitions. Except as provided above, the definitions and terminology found in Article 2 of this Code apply to this Article 11.

SEC. 1399.5 LIFETIME LEASES.

(a) A lifetime lease arises as to each tenant on the date that the subdivision map for the property is recorded.

(b) The initial rent payable under the lifetime lease shall not exceed the rent charged on the date the Application Packet is submitted, plus any increases permitted under the Rent Ordinance since that date. In consideration of the benefits provided by this Article, the subdivider shall agree to waive any right to any rent increase other than as provided in this subsection that may be permitted under the Costa Hawkins Rental Housing Act, Civil Code Sections 1954.50 et seq. or by any other provision of law. The lease shall provide that rent increases shall be subject solely to the provisions of the Rent Ordinance, including the approval of the Rent Board for any increase requiring such approval, and that any dispute between the landlord and the lifetime lease tenant concerning the rent shall be determined by the Rent Board. In the event the Rent Ordinance is no longer in effect, then rent may be increased not more than once a year in an amount equal to the percent increase in the U.S. Bureau of Labor Statistics Consumer Price Index-All Urban Consumers-San Francisco-Oakland-San Jose, CA, or any succeeding index, from the date of the last rent increase.

(c) The lease shall contain a provision allowing the lifetime lease tenant to terminate the lease and vacate the unit on thirty days written notice.

(d) The lease shall terminate on the death of the tenant or the date on which the tenant ceases to actually and continuously reside in the unit as his or her principal residence, whichever occurs first. The landlord may terminate the lease during its term only for a Permitted Eviction.

(e) There shall be no decrease in maintenance of the unit occupied by a tenant under a lifetime lease.

(f) If, on the date the Application Packet is submitted, the tenant occupies the unit with a person who is not a tenant but who is a related party, at the request of the tenant the related party shall become a tenant under lifetime lease. A "related party" is an adult who is a grandparent, grandchild, parent, child, brother, sister, spouse, or person registered as a Domestic Partner of the tenant pursuant to San Francisco Administrative Code 62.1-62.8.

(g) A tenant"s rights under a lifetime lease are not transferable, and any attempted transfer shall be of no force or effect. The foregoing does not prevent a tenant with a lifetime lease from allowing other persons to occupy the unit with him or her to the same extent as allowed under the existing agreement between the landlord and the tenant, provided that (i) the lifetime lease tenant continues to actually reside in the unit as his or her principal residence, and (ii) no other person residing in the unit shall have the rights of a lifetime lease tenant on account of any acts of, or oral representations made by the landlord or the lifetime lease tenant to any other person occupying the unit. A tenant must provide the landlord with the name of each person who occupies the unit with the tenant as well as emergency contact information for that person in writing. The tenant must also give any other occupant of the unit a written notice that the occupant is not a tenant and has no rights under the lifetime lease.

(h) The owner of a unit subject to a lifetime lease or his or her successor in interest may require a lifetime lease tenant to enter into a written agreement documenting the tenant"s lifetime lease rights. The lifetime lease shall include the terms set forth in this Section and shall also include the terms of the existing written rental agreement between the landlord and the tenant to the extent those terms do not conflict with this Section. If there is no existing written rental agreement, the written agreement shall include the usual and customary terms of residential rental agreements in the City that do not conflict with the terms of this Section. Where the tenant has the right to use certain common areas of the property, as, for example, parking or storage, or the right to have pets, those rights shall be included in the written agreement. Any controversy between the landlord and the tenant over the terms of the written agreement shall be decided by the Rent Board. If either a landlord or a tenant refuses to execute a written agreement after a decision by the Rent Board, the decision of the Rent Board shall serve as the agreement.

(i) A Notice of Right to Lifetime Lease shall be in the following form, printed in 12 point type or larger:

NOTICE OF RIGHT TO LIFETIME LEASE

TO: (name of tenant)

RE: (address of unit)

This Notice of Right to Lifetime Lease is given to you as required by Section 1399.5 of the San Francisco Subdivision Code. If the property in which you live becomes condominiums and you do not purchase your unit, you will have a lifetime lease.

A. The lifetime lease will start on the date that the subdivision map for the condominium is recorded with the San Francisco Recorder.

B. The following terms will be incorporated into your lifetime lease.

1. The initial rent payable under the lifetime lease shall not exceed the rent charged on the date the Application Packet is submitted, plus any increases permitted under the Rent Ordinance since that date. In consideration of the benefits provided by Article 11 of the San Francisco Subdivision Code, the subdivider shall agree to waive any right to any rent increase other than as provided in this subsection that may be permitted under the Costa Hawkins Rental Housing Act, Civil Code Sections 1954.50 et seq. or by any other provision of law. The lease shall provide that rent increases shall be subject solely to the provisions of the Rent Ordinance, including the approval of the Rent Board for any increase requiring such approval, and that any dispute between the landlord and the lifetime lease tenant concerning the rent shall be determined by the Rent Board. In the event the Rent Ordinance is no longer in effect, then rent may be increased not more than once a year in an amount equal to the percent increase in the U.S. Bureau of Labor Statistics Consumer Price Index-All Urban Consumers-San Francisco-Oakland-San Jose, CA, or any succeeding index, from the date of the last rent increase.

2. You have a right to terminate your lifetime lease at any time on thirty days prior written notice to your landlord.

3. The lifetime lease terminates only on the death of the last person named as a tenant in the lease or when you no longer actually and continuously reside in the unit as your principal place of residence.

4. Your landlord may terminate the lifetime lease during its term only if:

a. you fail to pay the rent to which the landlord is lawfully entitled under the oral or written agreement between you and the landlord or you habitually pay the rent late or give checks which are frequently returned because there are insufficient funds in the checking account;

b. you have violated a lawful obligation or covenant of tenancy other than the obligation to surrender possession upon proper notice and you have failed to cure the violation after having received written notice of it from the landlord; provided that notwithstanding any lease provision to the contrary, your landlord shall not endeavor to recover possession of your unit as a result of your subletting the unit if your landlord has unreasonably withheld the right to sublet following a written request from you, so long as you continue to reside in the rental unit and the sublet constitutes a one-for-one replacement of the departing tenant(s) as set forth in Rent Board Regulations 6.15A(d) and 6.15B(b).

c. you are committing or permitting to exist a nuisance in or are causing substantial damage to the rental unit, or you are creating a substantial interference with the comfort, safety or enjoyment of the landlord or tenants in the building;

d. you are using or permitting the unit to be used for any illegal purpose;

e. you have, after written notice to cease, refused the landlord access to the unit as required by state or local law;

5. If, on the date the application for condominiums is submitted to the San Francisco Department of Public Works, one of the following persons lives with you at the unit and is an adult, at your request the landlord must name that person as a tenant on the lifetime lease, even if the landlord has not previously accepted that person as a tenant: your grandparent, grandchild, parent, child, brother, sister, spouse, or domestic partner.

6. You may not assign or transfer the lifetime lease. However, you may allow other persons to occupy the unit with you to the same extent as allowed under the existing agreement between you and your landlord so long as you actually and continually reside in the unit as your principal place of residence and you give the landlord the name of each person who resides in the unit with you and emergency contact information for that person. You must give any person who resides in the unit with you notice that he or she is not a tenant and has no rights under the lifetime lease.

C. At your landlord"s request, you must enter into a written lease with your landlord that includes those terms of your existing rental agreement that do not conflict with your rights under the lifetime lease. If you do not have a written rental agreement, the written lifetime lease will contain provisions usually and customarily found in a residential rental agreement in San Francisco that do not conflict with your rights under the lifetime lease. If you and the landlord are unable to agree on the terms of the written agreement, the terms will be decided by the San Francisco Residential Rent Stabilization and Arbitration Board. If either you or the landlord refuse to sign a written agreement on the terms decided by the Rent Board, the decision of the Rent Board will serve as the agreement.

Date:__________________________

_______________________________

Signature of Subdivider

SEC. 1399.6 TENANT PURCHASE RIGHTS.

(a) Each tenant at the property has the right to purchase the unit he or she occupies provided the tenant continues to reside in the unit up to and including the date of close of escrow on the purchase.

(b) If one tenant purchases a unit and another tenant who resides in the same unit with the purchasing tenant does not jointly purchase the unit, the purchasing tenant takes the unit subject to the lifetime lease rights of the non-purchasing tenant.

(c) Within thirty calendar days following the issuance by the California Department of Real Estate of the Final Subdivision Public Report for a property containing five or more units, or the recording of the Parcel Map for a property containing four or fewer units, the subdivider shall notify each tenant in writing of the right to purchase the unit in which that tenant resides. The written notice shall be served in person or by certified or registered mail, and shall include the price at which the unit may be purchased and the date on which the offering period expires.

(d) The tenant"s right to purchase expires 180 calendar days following the date the offer to purchase is made to the tenant. The offering period may be extended by an agreement in writing between the subdivider and the tenant.

(e) With respect to a tenant who signed an Intent to Purchase, the right to purchase shall be at the price stated in the Intent to Purchase and on the other terms negotiated between the subdivider and the tenant in connection with the purchasing tenant"s Intent to Purchase. Where more than one tenant executes an Intent to Purchase for a unit, the tenants who executed the Intent to Purchase shall purchase the unit jointly.

(f) With respect to a tenant who did not sign an Intent to Purchase, the selling price for the unit shall be determined by the subdivider at the time the offer is made to the tenant, which price shall be no greater than the price at which the unit would be offered to the general public.

(g) A tenant may not assign his or her right to purchase a unit, except as follows: (i) a tenant may jointly purchase a unit with another person who resides in the unit with that tenant; and (ii) a tenant may add a person to title who is a co-signer on a first or second loan secured by the unit.

(h) To effectuate a purchase, a tenant must, before the offering period expires, execute a binding, non-contingent purchase and sale agreement that includes all material terms negotiated between the subdivider and the tenant, such other usual and customary terms found in an agreement for the purchase and sale of residential real property in the City and, where a Final Subdivision Public Report from the California Department of Real Estate is required, all terms required by that agency. Unless the subdivider and the tenant have agreed otherwise: (i) close of escrow shall be 60 days from the date the purchase and sale agreement is executed by the tenant; (ii) brokerage, attorney and inspection fees incurred in connection with execution of the purchase and sale agreement and closing escrow shall be paid by the party who incurred the fee; and (iii) documentary transfer tax, title insurance, and escrow fees and costs shall be paid according to custom in the County of San Francisco.

(i) A signed Intent to Purchase is irrevocable by the signing tenant for purposes of establishing the subdivider"s compliance with the qualifications for conversion under this Article 11 unless the Director finds, after hearing as described in Section 1399.10, that the subdivider obtained the signature by fraud or duress.

(j) An Intent to Purchase required for a conversion under this Article shall be in the following form, in 12 point type or larger.

INTENT TO PURCHASE

Definitions:

"Eligible purchaser" means a tenant or an owner who has continuously occupied a unit at the property for at least two years prior to the date the Application Packet is submitted and who occupies a unit at the property on the date the Application Packet is submitted. A person may qualify as an eligible purchaser only one time in a seven year period.

"Tenant" means an individual residing in the property on the date the Application Packet is submitted who has an express oral or written agreement directly with the owner.

The undersigned states that:

1. I reside at ____________________________________________, Unit ____. By

signing below, I indicate my intent to purchase this unit at the price of ________________.

2. I am an eligible purchaser, as defined above. I have not executed an Intent to Purchase with respect to any other property within the last seven years.

3. I have read and understand my right to purchase my unit at the price stated above and on the terms set forth in Section 1399.6 of the San Francisco Subdivision Code.

4. I have received a Notice of Right to Lifetime Lease and have read and understand my right to a lifetime lease as stated in that Notice.

5. I understand that any person who lives in my unit with me, who does not purchase the unit with me and who is a "tenant" of the current owner has a right to remain in the unit under a lifetime lease. Once I become the owner of the unit, I will become the landlord under the lifetime lease.

6. I am buying my unit with the intent of residing in it for at least two years. I understand that if I resell my unit within 12 months after the date that escrow closes on the purchase of my unit, I will be required to pay 20% of my net profit to a housing fund administered by the Rent Board, and that if I resell my unit between 13 and 24 months after the date that escrow closes on the purchase of my unit, I will required to pay 10% of my net profit to that fund. This payment is due unless I can demonstrate that I did not know or could not reasonably foresee at the time that escrow closes on my purchase of the unit that I might be required to resell the unit within 24 months of purchase.

7. I understand that signing this Intent to Purchase does not create a contractual obligation. However, as of this date, it is my intention to purchase my unit at the time that the unit is available and offered for sale.

8. I understand that this Intent to Purchase will be filed with the City and County of San Francisco in order to establish that the building qualifies for conversion, and that my signed Intent to Purchase is irrevocable for establishing that purpose unless my signature was obtained by fraud or duress.

9. I have been advised that I have a right to seek legal or other professional assistance in connection with my rights to purchase my unit or to have a lifetime lease, and either have obtained counsel or have waived my right to do so.

I/We declare, under penalty of perjury, that the foregoing statements are true and correct.

_______________________________ ____________________________

Eligible Purchaser Eligible Purchaser

[Completed Notary Acknowledgment must be attached.]

SEC.1399.7 RESTRICTION ON EVICTIONS DURING CONVERSION. An owner or subdivider may not endeavor to recover possession of a unit from any tenant in a building for which an Application Packet has been submitted unless possession of the unit is sought based upon a ground for a Permitted Eviction.

SEC. 1399.8 ADDITIONS AND DELETIONS TO APPLICATION PACKET FOR

SUBDIVISIONS UNDER ARTICLE 11.

(a) Application Packets for conversions under this Article 11 shall contain the following items in addition to those required by Sections 1322, 1323 and 1324 of this Code:

(1) Intent to Purchase forms from the following percentage of the total number of units;

Buildings of 2 to 6 units at least one eligible purchaser from 40% of the units

Buildings of 7 - 12 units at least one eligible purchaser from 33% of the units

Buildings of 13 or more units at least one eligible purchaser from 25% of the units

(2) A declaration of the subdivider, executed under penalty of perjury, stating that

(A) each tenant has been offered the right to execute an Intent to Purchase with respect to his or her unit and has been served with a Notice of Right to Lifetime Lease;

(B) escrow on the sale of a unit to the general public may not close until escrows have closed on the sales of until at least 25 percent of the units to eligible purchasers or to persons who will have been tenants at the property for at least two years preceding the date of close of escrow;

(C) a notice of intent to withdraw rental units from rent or lease under the Ellis Act, California Government Code Sections 7060 et seq. has not been filed with the Rent Board for a period of ten years preceding the date the Application Packet is submitted, nor has a notice of termination of tenancy seeking to obtain possession of a unit in the property because the landlord wishes to withdraw from rent or lease all rental units at the property as provided in Section 37.9(a)(13) of the Rent Ordinance been served on a tenant at the property or filed with the Rent Board for a period of ten years preceding the date the Application Packet is submitted;

(D) within five years preceding the date the Application Packet is submitted, no notice of termination of tenancy seeking to obtain possession of a unit in the property for occupancy by an owner or a related party of an owner, as provided in Section 37.9(a)(8) of the Rent Ordinance, has been served on a tenant at the property or filed with the Rent Board;

(E) after reasonable inquiry and to the best of subdivider"s knowledge, within the five years preceding the date the Application Packet is submitted, no tenant has accepted compensation to vacate the property, and has vacated the property based upon a representation by the owner or the owner"s agent that the owner intended to withdraw from rent or lease all residential rental units at the property under Section 37.9(a)(13) of the Rent Ordinance and under the Ellis Act, California Government Code Sections 7060 et seq.

(F) all of the information in the application is, to the best of the subdivider"s knowledge, true and correct.

(3) The materials required by Section 1381(a)(1) and (2).

(b) The statements required by Section 1323(a), paragraph 1 shall not be included in an Application Packet for conversion under this Article.

SEC. 1399.10 NOTICE OF APPLICATION; HEARING. Not more than 15 days after the date an Application Packet is submitted, the Director shall mail to each tenant residing at the property (i) notice that the application has been submitted and that the tenant has the right to request a hearing on the application, and (ii) a copy of the subdivider"s declaration submitted as part of the Application Packet. A tenant who wishes to request a hearing shall, within ten days of the date that the Director"s notice is mailed, make a written request for a public hearing to the Director. The Director shall hold a public hearing with respect to the application within 21 days of the date the tenant"s request for a hearing is made. Notice of the hearing shall be mailed to each tenant by the Director at least ten days prior to the hearing.

SEC 1399.11 ACTION ON APPLICATION PACKET; CONDITIONS OF APPROVAL. The Director shall review an Application Packet for completeness within 15 days after the date the Application Packet was submitted. An application shall be considered filed when the Director determines that it is complete. If the Director fails within the 15 day period to notify the applicant of the items required to make an Application Packet complete, the Application Packet will be deemed filed on the 15th day after it has been submitted.

(a) The Director shall approve or conditionally approve an application within 50 days after filing unless the Director finds that:

(1) the application fails to meet the requirements of Section 1399.8; or

(2) the signature on any Intent to Purchase was obtained as the result of fraud or duress; or

(3) within the five years preceding the date the Application Packet was submitted, one or more tenants has accepted compensation to vacate the property, and has vacated the property based upon a representation by the owner or the owner"s agent that the owner intended to withdraw from rent or lease all residential rental units at the property under Section 37.9(a)(13) of the Rent Ordinance and under the Ellis Act, California Government Code Section 7060 et seq.

(4) any of the other statements in the subdivider"s declaration are false; or

(5) the application fails to meet any mandatory requirement of the Subdivision Map Act, Government Code Section 66410, et seq.

(b) If the Director disapproves a Tentative Map, no Application Packet for the same property may be submitted for eighteen months following the date of disapproval.

(c) If the Director fails to approve, conditionally approve, or disapprove a Tentative Map within 50 days after it has been filed, the Tentative Map is deemed approved.

(d) A Tentative Map filed under this Article 11 shall be approved subject to the condition that, concurrently with recording of the final map, the subdivider shall record against the property a Notice of Conditions of Approval, signed and notarized by the City and the subdivider, that:

(1) effective as of the date of recording the final map, each unit is subject to the lien of a lifetime lease, on the terms set forth in Section 1399.5, in favor of each tenant who does not purchase his or her unit and who was a tenant on the date the Application Packet was submitted and who has actually and continuously resided in the unit as his or her principal residence from the date on which the Application Packet was submitted to and including the date of recording the final map;

(2) escrow on the sale of a unit to the general public may not close until escrows have closed on the sales of until at least 25 percent of the units to eligible purchasers or to persons who will have been tenants at the property for at least two years preceding the date of close of escrow; and

(3) each unit is subject to a lien in favor of the City for payments of the fees required by Section 1399.15.

The recorded conditions of approval also constitute an agreement between the subdivider and any successors in interest and the City. The City and each tenant have the right to specific enforcement of the agreement in addition to any other remedies provided by law.

SEC. 1399.12 NOTICE TO NEW TENANTS. Notice of the proposed conversion must be given to all tenants who take occupancy of a unit in a property after the date an Application Packet is submitted for the property. Such new tenants are not entitled to a lifetime lease.

SEC. 1399.14 ADMINISTRATIVE FEE

(a) The Department of Public Works is authorized to collect a fee of $3,800 for applications of 4 units or less, and $6,600 for 5 units or more for the administration of this Article 11. These are the current fees as of March, 2002 for administration of Article 9.

(b) Within one year after the date this Section becomes effective, and every three years thereafter, the Director shall review the proceeds of the administrative fee, and the costs of administering and monitoring Article 11 and any new information that shall become available and prepare a report to the Board of Supervisors. Based upon the result of the review, the Director shall recommend to the Board of Supervisors any necessary adjustments to the fee, along with written justification for the recommended adjustment and any necessary legislation. In the event that the fee proceeds have exceeded, or are anticipated to exceed, the costs of administering and monitoring Article 11, the Director shall recommend legislation to the Board of Supervisors that modifies the applicable fee to ensure that fee proceeds do not exceed the costs of administration. In the event that fee proceeds have undercollected, or are anticipated to undercollect, the Director may recommend legislation to the Board of Supervisors that modifies the applicable fee to more accurately recover the costs for administration and monitoring.

SEC. 1399.15 ANTI-SPECULATION FEE.

(a) In order to discourage tenants and other purchasers from purchasing units primarily for the purpose of resale, as to each unit converted under this Article that is resold within 24 months from the date of close of escrow on the initial sale of that unit by the subdivider, the seller shall pay at close of escrow to the special fund maintained by the Controller called the Citywide Affordable Housing Fund. The receipts in the Fund are hereby appropriated in accordance with law to be used solely to increase the supply of housing affordable to qualifying households subjection to the conditions of this Section. The Fund shall be administered and expended by the Director of the Mayor"s Office of Housing, who shall have the authority to prescribe rules and regulations governing the Fund which are consistent with this Section. The fee shall be an amount equal to 20% of the net profit realized on the sale if the unit is resold up to and including 12 months after the date of close of escrow on the initial sale of the unit by the subdivider, and (ii) an amount equal to 10% of the net profit realized on the sale if the unit is resold 13 months and up to and including 24 months after the date of close of escrow on the initial sale by the subdivider.

For purposes of this subsections: (i) the date a unit is resold is the date of close of escrow on the sale of the unit; and (ii) net profit realized on the sale of a unit is the difference between (A) the gross purchase price paid by the seller on the initial purchase of the unit, and (B) the sale price of the unit reduced by the costs of improvements made to the unit, real estate commission or attorney"s fees incurred in connection with the sale not to exceed 6% of the purchase price, and transfer tax and other sales expenses customarily paid by a seller in the County. The costs of improvements made to a unit include, without limitation, the costs of structural improvements to the unit, new fixtures, cabinets and appliances, and cosmetic improvements such as carpet, paint, and floor refinishing. The Mayor"s Office of Housing shall determine the amount of gross profit and may request reasonable documentation of gross purchase price, sale price and all costs and expenses by which a seller seeks to reduce the sale price.

(b) A seller may be exempted from payment of the fee required under this Section upon a showing that the he or she resold the unit within 24 months of purchase due to circumstances which were beyond the control of the seller and could not have reasonably been foreseen by the seller at the time of purchase. Examples of such circumstances include job transfer, loss of employment, health- related issues and other circumstances which the seller did not know or could not reasonably have foreseen at the time of purchase. A seller who seeks an exemption from the fee required under this Section shall file a written request for exemption with the Mayor"s Office of Housing and shall have the burden of proving the basis for the exemption.

Sec. 1399.16. Conversion Limitation; Lottery.

For a period of 25 years from the effective date of this legislation, not more than 1% of the housing stock in San Francisco may be approved for conversion under this Article in any calendar year, subject to the carry-over of unused conversions. Thereafter, not more than 200 units may be approved for conversion under this Article in any calendar year, subject to the carry-over of unused conversions. As used below, "Permitted Conversions" means a number equal to 1% of the housing stock in San Francisco as reported by the Planning Department in the "Housing Inventory" in the most recent available calendar year for a period of 25 years from the effective date of this legislation, and 200 unit per year in any calendar year thereafter.

Within 90 days from the effective date of this legislation and on March 1 of each calendar year after the year in which this legislation becomes effective (or on the next business day if March 1 falls on a Saturday or Sunday) the Director shall hold a lottery and shall select at random tickets representing buildings containing the number of Permitted Conversions. Buildings containing units equal to the number Permitted Conversions shall be placed on the Regular List. After selection of the Regular List, the Director shall continue to select tickets and shall establish a Standby List containing any remaining units in the lottery. Placement of an application on the Standby List does not vest in the Subdivider any right to file an application for conversion if the number of units for which conversion has been granted equals or exceeds the number permitted under this Article.

When applications can be accepted for filing from the Standby List because of the withdrawal or denial of other applications, the passage of time, or other circumstances, the Director shall accept Applications Packets in order, beginning with the first on the Standby List. The Director shall continue to call applications from the Standby List until the number of Permitted Conversions have been approved under this Article. No Application Packet shall be accepted that, if approved, would result in the conversion of units in excess of the number permitted under this Article.

If fewer than the number of Permitted Conversions apply for the lottery in any year, the Director shall accept Applications Packets after the lottery until the number of Permitted Conversions have been approved in that calendar year. If fewer than the number of Permitted Conversions are approved in any calendar year, the unused Permitted Conversions shall be carried over into the next and, if applicable, into subsequent calendar years.

Section 3. SEVERABILITY

The severability provision of Subdivision Code Section 1305, and the Subdivision Map Act Provisions of Section 1398 shall apply to this Ordinance.

APPROVED AS TO FORM:

DENNIS J. HERRERA, City Attorney

By:

SUSAN S. CLEVELAND

Deputy City Attorney

Ord. authorizing 12-Month Extension for Certain Capital Improvement Passthroughs Passes (effective 3/24/02)

Housing Study Databook Available 2/1/02

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