If it's obvious that your rent has been wrongfully increased (for example, the allowable increase is 1% and the landlord is trying to raise it 3%), you can file a Summary Petition at the Rent Board.

This petition alleges a wrongful rent increase and requires the Rent Board to hold a hearing. If the Rent Board determines that the increase is illegal, the rent will be reset to the correct amount and the landlord will be ordered to refund the entire increase for the period it was incorrect. Rents can be re-funded going back three years.

UTILITY PASSTHROUGHS

Landlords can increase tenants' rent to cover increases in the cost of utilities such as electricity and water. Utility increases do not require rent board approval.

If landlords pay the PG&E and water bill and can show that these costs have gone up, they are allowed to pass the increase in costs onto the tenant. Also, if the landlord pays the water bill and is fined because too much water was used in the building, the landlord is allowed to charge the tenants in the building a portion of that penalty, as long as there are water conversion devices installed in the bathrooms.

The Rent Ordinance rules specifically state how these pass-throughs are calculated. It is a good idea to check the rules to make sure the increase has been calculated properly. A tenant is entitled to proper notice before paying for a utility pass-through. Ask the landlord to provide documentation, i.e. the bill of past and current months, that proves that the rates have gone up significantly. The law requires that landlords disclose any shared utility arrangement to tenants before they sign any rental agreement.

A landlord may petition the Rent Board to pass on to tenants the costs of renovations to the property. This includes work that prolongs the life of the building, such as roof replacement, exterior painting, seismic retrofitting, etc. Capital improvement rent increases cannot occur without the Rent Board’s approval. In order to pass on these costs, the landlord must first petition the Rent Board and receive approval. The Rent Board sets up a hearing before it grants approval. Tenants have the opportunity at the hearing to argue against the petition.

Tenants can be evicted temporarily for a period of up to three months for capital improvement work which will make the unit uninhabitable while this work is being done. The landlord can request written extensions. The tenant must be allowed to reoccupy the unit once the work is completed. Prior to the work, all necessary permits must be obtained before the tenant can be asked to leave.

A proper eviction notice must be given for this type of eviction. Tenants must be paid relocation costs (they're the same as for owner move-in, see our eviction page). The tenant must let the landlord know before moving that she is interested in re-occupancy.

After the work is finished, you’ll receive a rent increase notice with the passthrough info. You're not obligated to pay it until the Rent Board approves it. Note: Once the increase is approved, it will be retroactive back to when you received the notice.

The landlord must submit a petition for a capital improvement increase to the Rent Board before she can pass it on to tenants. A landlord must provide proof of the cost of the project. Info on what work was done and to which tenant the increase applies must also be included. The Rent Board then sets a hearing date and notifies affected tenants by mail at least 10 days prior to the hearing. The tenant may file a written response at any time before the hearing.

It’s important that as many tenants in your building as possible attend the hearing. Information from both landord and tenants and/or their representatives may be submitted. The Hearing Officer will question the landlord and review the documents, then open the record to tenant questions and evidence. The Hearing Officer will consider the past history of rent increases, as well as failure to perform ordinary repairs, and to comply with applicable state and local law.

At the hearing, raise objections. Allowable objections to the landlord’s petitions include:
The work was not done at all, was shoddy, was done without permits, was done a long time ago, or was never completed.
The work was either necessary only because of deferred maintenance (the landlord neglected repairs), or was unnecessary and only undertaken for purposes of  “gold plating.”
You moved in within six months of the landlord doing the work and therefore do not have to pay.
You objected to the work; it was not done in response to health or safety concerns or to reduce maintenance costs.
The landlord didn’t spend as much as he claims or got insurance money to cover the costs.
The work is overly luxurious or more costly than required.

Note: A landlord cannot pass on the cost of replacing appliances s/he owns and that she charges a use fee for, e.g., coin-operated washers and dryers. Appliances may be amortized when part of a remodeled kitchen or if they are new services or appliances the tenant did not previously have. If the appliance is a replacement for a current one, the cost will not be amortized as a capital improvement, but will be considered part of operating and maintenance expenses (except for EPA-energy-star compliant appliances.

The Hearing Officer will write a decision within 30 days and send copies to all parties. Both sides have 15 days from the notice of the decision to appeal.

If you believe the hearing decision is in error, that an abuse of discretion occurred or that a financial hardship will arise if the decision stands, you can request an appeal  for consideration by the Rent Board Commission. The Commission ONLY reviews written submissions at this point. No oral arguments can be made at the appeal. The Commission’s decision is final unless a writ is filed with Superior Court within 90 days of the decision.
 
A tenant can appeal a capital improvement increase on the basis of hardship. The criteria used is HUD guidelines, ie., rent payments should compose no more than 30-35% of gross income. If the appeal is accepted, you’ll be required to submit financial documentation.

100% of the certified costs of capital improvements may be passed through to the tenants. Amortization (period over which payments are stretched) schedules are 10, 15 and 20 years. Capital improvement rent increases are limited to 5% of base rent at the time the petition was filed or $30, whichever is greater, in any 12-month period.

Only 50% of the costs of improvements can be passed through. Amortization schedules remain 7 and 10 years; rent increases limited to 10% of the tenant’s base rent at the time the petition was filed or $30, whichever is greater, in any 12-month period. In place of the above, a tenant may elect to have 100% of the costs passed through to the tenant, with an annual limitation of 5% and a total limitation of 15% of the tenant’s base rent applicable to the capital improvement rent increases. (Note: This option may be chosen within 15 days after a decision on a 50% passthrough is mailed to tenant.)

Rules applicable to ALL buildings regardless of size

100% of the certified cost of seismic work required by law (and other work required by laws enacted after 11/14/02) may be passed through, subject to the 10%/$30 limit. Amortization schedule is 20 years. (Note: Seismic work not required by law follows the regular scheduled according to building size.) 100% of the cost of energy conservation work approved by the Commission on the Environment may be passed through and there is no annual limit on amount of the passthrough. (At present, EPA energy-star-compliant refrigerators are the only items approved for certification.) All capital improvement petitions which request certification of more than $25,000 in costs must include copies of either competitive bids for the work or copies of time and materials billing for work performed by all contractors and subcontractors. Otherwise, landlord must pay for an estimator hired by the Rent Board. Rent Board may not certify work required to correct code violations for which an NOV (Notice of Violation from the Dept. of Building Inspections) remained unabated for 90 days unless the landlord made timely good faith efforts to complete the work within the 90-day period.