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19-010 Chantler Law Offices, Hearing Examiner Services
CITY OF a HEARING EXAMINER SERVICES AGREEMENT BETWEEN CITY OF CUPERTINO AND CHANTLER LAW OFFICES CUPERTINO This Hearing Examiner Agreement is made and entered into on February 1, 2019 ("Effective Date") by and between the City of Cupertino, a municipal corporation ("City"), and Chantler Law Offices ("Hearing Examiner"). 1. INTENT 1.1 WHEREAS, Section 19.172 of the Below Market Rate (BMR) Program, Ordinance No. 14- 2125 of the City of Cupertino, and their respective enabling regulations allow for the hearing, review and determination of BMR and other housing disputes; and 1.2 WHEREAS, under these Ordinances the procedures for hearing appeals for disputes are similar and include a multitude of housing related disputes and matters; and 1.3 WHEREAS, in order to carry out the purposes of the BMR Program and the ordinances referenced above, City desires and needs the services of Hearing Examiner; and 1.4 WHEREAS, Hearing Examiner has the necessary skill and expertise and is willing to serve as a Hearing Examiner under the above referenced laws and regulations relating thereto as promulgated by City; NOW, THEREFORE, CITY AND HEARING EXAMINER DO HEREBY AGREE AS FOLLOWS: 2. SERVICES 2.1 Hearing Examiner shall conduct petition hearings and provide relevant hearing officer services as set forth in the Scope of Work, attached and incorporated herein as Exhibit A. Hearing Examiner shall perform, in a timely and professional manner, all duties and responsibilities. 2.2 The foregoing duties and responsibilities shall be performed in a fair and impartial manner without prejudice or bias toward any party to a hearing. 2.3 The continued retention of the Hearing Officer under this Agreement is not, in any way, contingent upon the outcome of any decision(s) by the Hearing Officer in the course of carrying out his or her duties under this Agreement. 3. TIME OF PERFORMANCE 3.1 This Agreement begins on the Effective Date and ends on Tune 30, 2020 ("Contract Time"), unless terminated earlier as provided herein: Contractor's Services shall begin on February 1, Sel ect one Pag e I of 8 Professional/Co ns ul ling Contrac ts /Ve rsion : May 22, 20 18 2019 and shall be completed by Tune 30, 2020. 3.2 Schedule of Performance. Contractor must deliver the Services in accordance with the Schedule of Performance, attached and incorporated here Exhibit B . 3.3 Time is of the essence for the performance of all the Services. Contractor must have sufficient time, resources, and qualified staff to deliver the Services on time. 4. COMPENSATION 4.1 Maximum Compensation. City will pay Contractor for satisfactory performance of the Services an amount that will based on actual costs but that will be capped so as not to exceed $75,000 ("Contract Price"), based upon the scope of services in Exhibit A and the budget and rates included in Exhibit C, Compensation attached and incorporated here. The maximum compensation includes all expenses and reimbursements and will remain in place even if Contractor's actual costs exceed the capped amount. No extra work or payment is permitted without prior written approval of City. 4.2 Invoices and Payments. Monthly invoices must state a description of the deliverable completed and the amount due for the preceding month. Within thirty (30) days of completion of Services, Contractor must submit a requisition for final and complete payment of costs and pending claims for City approval. Failure to timely submit a complete and accurate payment requisition relieves City of any further payment or other obligations under the Agreement. 4.3 Nothing in this Agreement shall be deemed to require City to assign Hearing Officer to any particular number of cases arising under Chapter 19.172: BMR Program, and City may limit case assignments to the Hearing Officer. 5. INDEPENDENT CONTRACTOR 51 Status. Contractor is an independent contractor and not an employee, partner, or joint venture of City. Contractor is solely responsible for the means and methods of performing the Services and for the persons hired to work under this Agreement. Contractor is not entitled to health benefits, worker's compensation or other benefits from the City. 5.2 Contractor's Qualifications. Contractor warrants on behalf of itself and its subcontractors that they have the qualifications and skills to perform the Services in a competent and professional manner and according to the highest standards and best practices in the industry. 53 Permits and Licenses. Contractor warrants on behalf of itself and its subcontractors that they are properly licensed, registered, and/or certified to perform the Services as required by law and have procured a City Business License . Select on e Page 2 of 8 Prof essional/Consultin g C ontrac ts /Ve rs ion: May 22, 2 018 5.4 Subcontractors. Only Contractor's employees are authorized to work under this Agreement. Prior written approval from City is required for any subcontractor, and the terms and conditions of this Agreement will apply to any approved subcontractor. 5..5 Tools, Materials and Equipment. Contractor will supply all tools, materials and equipment required to perform the Services under this Agreement. 56 Payment of Taxes. Contractor must pay income taxes on the money earned under this Agreement. Upon City's request, Contractor will provide proof of payment and will indemnify City for violations pursuant to the indemnification provision of this Agreement. 6. PROPRIETARY/CONFIDENTIAL INFORMATION In performing this Agreement, Contractor may have access to private or confidential information owned or controlled by the City, which may contain proprietary or confidential details the disclosure of which to third parties may be damaging to City. Contractor shall hold in confidence all City information provided by City to Contractor and use it only to perform this Agreement. Contractor shall exercise the same standard of care to protect City information as a reasonably prudent contractor would use to protect its own proprietary data. 7. OWNERSHIP OF MATERIALS 7.1 Property Rights. Any interest (including copyright interests) of Contractor in any product, memoranda, study, report, map, plan, drawing, specification, data, record, document or other information or work, in any medium ( collectively, "Work Product"), prepared by Contractor in connection with this Agreement will be the exclusive property of the City and shall not be shown to any third-party without prior written approval of City. 71 Copyright. To the extent permitted by Title 17 of U.S. Code, all Work Product arising out of this Agreement is considered "works for hire" and all copyrights to the Work Product will be the property of City. Alternatively, Contractor assigns to City all Work Product copyrights. Contractor may use copies of the Work Product for promotion only with City's written approval. 73 Patents and Licenses. Contractor must pay royalties or license fees required for authorized use of any third party intellectual property, including but not limited to patented, trademarked, or copyrighted intellectual property if incorporated into the Services or Work Product of this Agreement. 7.4 Re-Use of Work Product. Unless prohibited by law and without waiving any rights, City may use or modify the Work Product of Contractor or its sub-contractors prepared or created under this Agreement, to execute or implement any of the following: Select one (a) The original Services for which Contractor was hired; (b) Completion of the original Services by others: Page 3 of 8 Professional/Consulting Con tra c ts /Ve rsion : May 22, 2018 (c) Subsequent additions to the original Services; and/or (cl) Other City projects. 7.5 Deliverables and Format. Contractor must provide electronic and hard copies of the Work Product, on recycled paper and copied on both sides, except for one single-sided original. 8 . RECORDS Contractor must maintain complete and accurate accounting records relating to its performance in accordance with generally accepted accounting principles. The records must include detailed information of Contractor's performance, benchmarks and deliverables, which must be available to City for review and audit. The records and supporting documents must be kept separate from other records and must be maintained for four years from the date of City's final payment. 9. ASSIGNMENT Contractor shall not assign, sublease, hypothecate, or transfer this Agreement, or any interest therein, directly or indirectly, by operation of law or otherwise, without prior written consent of City. Any attempt to do so will be null and void. Any changes related to the financial control or business nature of Contractor as a legal entity is considered an assignment of the Agreement and subject to City approval, which shall not be unreasonably withheld. Control means fifty percent (50 %) or more of the voting power of the business entity. 10. PUBLICITY/ SIGNS Any publicity generated by Contractor for the project under this Agreement, during the term of this Agreement and for one year thereafter, will reference the City's contributions in making the project possible. The words "City of Cupertino" will be displayed in all pieces of publicity, including flyers, press releases, posters, brochures, public service announcements, interviews and newspaper articles. No signs may be posted, exhibited or displayed on or about City property, except signage required by law or this Contract, without prior written approval from the City. 11. INDEMNIFICATION 11.1 To the fullest extent allowed by law, and except for losses caused by the sole and active negligence or willful misconduct of City personnel, Contractor shall indemnify, defend and hold Se lect one Pag e 4 of 8 Profess iona l/Consulting Con tra cts /Ve rs ion: May 22, 201 8 harmless City, its City Council, boards and commissions, officers, officials, employees, agents, servants, volunteers and consultants ("Indemnitees"), through legal counsel acceptable to City, from and against any and all liability, damages, claims, actions, causes of action, demands, charges, losses, costs and expenses (including attorney fees, legal costs and expenses related to litigation and dispute resolution proceedings) of every nature, arising directly or indirectly from this Agreement or in any manner relating to any of the following: (a) Breach of contract, obligations, representations or warranties; (b) Negligent or willful acts or omissions committed during performance of the Services; (c) Personal injury, property damage, or economic loss resulting from the work or performance of Contractor or its subcontractors or sub-subcontractors; (d) Unauthorized use or disclosure of City's confidential and proprietary Information; (e) Claim of infringement or violation of a U.S. patent or copyright, trade secret, trademark, or service mark or other proprietary or intellectual property rights of any third party. 11.2 Contractor must pay the costs City incurs in enforcing this provision. Contractor must accept a tender of defense upon receiving notice from City of a third-party claim, in accordance with California Public Contract Code Section 9201. At City's request, Contractor will assist City in the defense of a claim, dispute or lawsuit arising out of this Agreement. 11.3 Contractor's duties under this section are not limited to the Contract Price, workers' compensation payments, or the insurance or bond amounts required in the Agreement. Nothing in the Agreement shall be construed to give rise to an implied right of indemnity in favor of Contractor against City or any Indemnitee. 11.4. Contractor's payments may be deducted or offset to cover any money the City lost due to a claim or counterclaim arising out of this Agreement, a purchase order, or other transaction. 12 . INSURANCE Contractor shall comply with the Insurance Requirements, attached and incorporated here as Exhibit D, and must maintain the insurance for the duration of the Agreement, or longer as required by City. City will not execute the Agreement until City approves receipt of satisfactory certificates of insurance and endorsements evidencing the type, amount, class of operations covered, and the effective and expiration dates of coverage. Failure to comply with this provision may result in City, at its sole discretion and without notice, purchasing insurance for Contractor and deducting the costs from Contractor's compensation or terminating the Agreement. 13. COMPLIANCE WITH LAWS 13.1 General Laws. Contractor shall comply with all local, state and federal laws and regulations applicable to this Agreement. Contractor will promptly notify City of changes in the law or other conditions that may affect the Project or Contractor's ability to perform. Contractor is responsible for verifying the employment authorization of employees performing the Services, Page 5 of 8 Professional/Cons ulting Contracts /Ve rs ion: May 22, 201 8 as required by the Immigration Reform and Control Act. 13.2 Labor Laws. Contractor shall comply with all labor laws applicable to this Agreement. If the Scope of Services includes a "public works" component, Contractor is required to comply with prevailing wage laws under Labor Code Section 1720 and other labor laws. 13.3 Discrimination Laws. Contractor shall not discriminate on the basis of race, religious creed, color, ancestry, national origin, ethnicity, handicap, disability, marital status, pregnancy, age, sex, gender, sexual orientation, gender identity, Acquired-Immune Deficiency Syndrome (AIDS) or any other protected classification. Contractor shall comply with all anti-discrimination laws, including Government Code Sections 12900 and 11135, and Labor Code Sections 1735, 1777 and 3077.5. Consistent with City policy prohibiting harassment and discrimination, Contractor understands that harassment and discrimination directed toward a job applicant, an employee, a City employee, or any other person, by Contractor or its employees or sub-contractors will not be tolerated. 13.4 Conflicts of Interest. Contractor shall comply with all conflict of interest laws applicable to this Agreement and must avoid any conflict of interest. Contractor warrants that no public official, employee, or member of a City board or commission who might have been involved in the making of this Agreement, has or will receive a direct or indirect financial interest in this Agreement, in violation of California Government Code Section 1090 et seq. Contractor may be required to file a conflict of interest form if Contractor makes certain governmental decisions or serves in a staff capacity, as defined in Section 18700 of the California Code of Regulations. Contractor agrees to abide by the City's rules governing gifts to public officials and employees. 13.5 Remedies. Any violation of Section 13 constitutes a material breach and may result in City suspending payments, requiring reimbursements or terminating this Agreement. City reserves all other rights and remedies available under the law and this Agreement, including the right to seek indemnification under Section 11 of this Agreement. 14. PROTECT COORDINATION City Project Manager. The City assigns the Senior Housing Planner as the City's representative for all purposes under this Agreement, with authority to oversee the progress and performance of the Scope of Services. City reserves the right to substitute another Project manager at any time, and without prior notice to Contractor. Contractor Project Manager. Subject to City approval, Contractor assigns the Senior Housing Planner as its single Representative for all purposes under this Agreement, with authority to oversee the progress and performance of the Scope of Services. Contractor's Project Manager is responsible for coordinating and scheduling the Services in accordance with the Scope of Services and the Schedule of Performance . Contractor must regularly update the City's Project Manager about the progress with the work or any delays, as required under the Scope of Services. City written approval is required prior to substituting a new Representative. Page 6 of 8 Profe ss ional/Consulting C ontracts /Ve rs ion: May 22, 201 8 15. ABANDONMENT OF PROTECT City may abandon or postpone the Project or parts therefor at any time . Contractor will be compensated for satisfactory Services performed through the date of abandonment, and will be given reasonable time to assemble the work and clos e out the Services. With City's pre-approval in writing, the time spent in closing out the Services will be compensated up to a maximum of ten percent (10 %) of the total time expended to date in the performance of the Services. 16 . TERMINATION City may terminate this Agreement for cause or without cause at any time. Contractor will be paid for satisfactory Services rendered through the date of termination, but final payment will not be made until Contractor closes out the Services and delivers the Work Product. 17. GOVERNING LAW. VENUE AND DISPUTE RESOLUTION This Agreement is governed by the laws of the State of California. Any lawsuits filed related to this Agreement must be filed with the Superior Court for the County of Santa Clara, State of California. Contractor must comply with the claims filing requirements under the Government Code prior to filing a civil action in court. If a dispute arises, Contractor must continue to provide the Services pending resolution of the dispute. If the Parties elect arbitration, the arbitrator's award must be supported by law and substantial evidence and include detailed written findings of law and fact. 18. ATTORNEYFEES If City initiates legal action, files a complaint or cross-complaint, or pursues arbitration, appeal, or other proceedings to enforce its rights or a judgment in connection with this Agreement, the prevailing party will be entitled to reasonable attorney fees and costs. 19. THIRD PARTY BENEFICIARIES There are no intended third party beneficiaries of this Agreement. 20. WAIVER Neither acceptance of the Services nor payment thereof shall constitute a waiver of any contract provision. City's waiver of a breach shall not constitute waiver of another provision or breach. 21. ENTIRE AGREEMENT Page 7 of 8 Profe ssional/Con sulting Contracts /Ve rs ion: May 22, 201 8 This Agreement represents the full and complete understanding of every kind or nature between the Parties, and supersedes any other agreement(s) and understanding(s), either oral or written, between the Parties. Any modification of this Agreement will be effective only if in writing and signed by each Party's authorized representative. No verbal agreement or implied covenant will be valid to amend or abridge this Agreement. If there is any inconsistency between the main Agreement and the attachments or exhibits thereto, the text of the main Agreement shall prevail. 22. INSERTED PROVISIONS Each provision and clause required by law for this Agreement is deemed to be included and will be inferred herein. Either party may request an amendment to cure mistaken insertions or omissions of required provisions. The Parties will collaborate to implement this Section, as appropriate. 23. HEADINGS The headings in this Agreement are for convenience only, are not a part of the Agreement and in no way affect, limit or amplify the terms or provisions of this Agreement. 24. SEVERABILITY/PARTIAL INVALIDITY If any term or provision of this Agreement, or their application to a particular situation, is found by the court to be void, invalid, illegal or unenforceable, such term or provision shall remain in force and effect to the extent allowed by such ruling. All other terms and provisions of this Agreement or their application to specific situations shall remain in full force and effect. The Parties agree to work in good faith to amend this Agreement to carry out its intent. 25. SURVIVAL All provisions which by their nature must continue after the Agreement expires or is terminated, including the Indemnification, Ownership of Materials/Work Product, Records, Governing Law and Attorney Fees, shall survive the Agreement and remain in full force and effect. 26. NOTICES All notices, requests and approvals must be sent in writing to the persons below, which will be considered effective on the date of personal delivery or the date confirmed by a reputable overnight delivery service, on the fifth calendar day after deposit in the United States Mail, postage prepaid, registered or certified, or the next business day following electronic submission: Page 8 of 8 Professional/Consulting Contracts /Version: May 22, 2018 To City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Attention: Kerri Heusler Email: kheusler@cupertino.org 27. VALIDITY OF CONTRACT To Contractor: Chantler Law Offices PO Box 50430 East Palo Alto, CA 94303 Attention: Derek W. Chantler Esq. Email: derek@chantlerlaw.com This Agreement is valid and enforceable only if (a) it complies with the purchasing and contract provisions of Cupertino Municipal Code Chapters 3.22 and 3.23, as amended from time to time, (b) is signed by the City Manager or an authorized designee, and (c) is approved for form by the City Attorney's Office. 28. EXECUTION The person executing this Agreement on behalf of Contractor represents and warrants that Contractor has full right, power, and authority to enter into and carry out all actions contemplated by this Agreement and that he or she is authorized to execute this Agreement, which constitutes a legally binding obligation of Contractor. This Agreement may be executed in counterparts, each one of which is deemed an original and all of which, taken together, constitute a single binding instrument. IN WITNESS WHEREOF, the parties have caused the Agreement to be executed. CONTRACTOR y.J]_([ffat;Y By __________ _ Name Derek W. Chantler Title Partner Date January 28, 2019 Tax I.D . No .: 625-39-7297 CITY OF CUPERTINO A Municipal Corporation By ~~ 7 Name Aarti Shrivastava Title Assistant City Manager Date CJ~ Page 9 of 8 Professional/Consulting Contrac ts /Vers ion : May 22 , 2018 APPROVED AS TO FORM: t2_ erc_,,i/Qu I. -= ROCIO V. FIERRO Cupertino Acting City Attorney ATTEST: (:>f GRACE SCHMIDT City Clerk Page IO of Pr ofessional/Cons ulting Co ntracts /Ve rs ion: May 22 , 20/8 ~ Add attachment A scope of work Petition Hearings: i. Conduct petition hearings in response to petitions filed with the Below Market Rate (BMR) Program), including ruling on motions during such hearings and making factual and legal determinations based on findings of fact and conclusions of law, in accordance with Chapter 19.172: BMR Program and any regulations promulgated to implement these ordinances; ii. Perform such hearing officer services in accordance with the applicable provisions of Chapter 19.172: BMR Program; iii. Provide within the required time limit a final, typed, decision in a form approved by the City Attorney and BMR Program Administrator, which shall include at a minimum a summary of testimony, evaluation of the evidence, the parties' positions on factual and legal issues, findings of fact and conclusions of law, and other pertinent information as prescribed by the City from time to time and; iv . All hearings shall be conducted at City offices, 10300 Torre Ave., Cupertino, CA 95014, or such other locations as may be directed by the BMR Program Administrator. ~ Add attachment B Schedule of Performance, if any ~ Add attachment C -Budget/Payment schedule ~ Add attachment D -Insurance requirements Page 11 of Professional/Consulting Co ntracts /Ve rsion: May 22, 20 18 -' ·., December 11, 20 18 Chantler Law Offices 2225 East Bayshore Road, Suite 200 PO Box 50430 Palo Alto, CA 94303 (V) 650-250-5332 (F ) 650-618-0394 www.chantler law.com BY EMA IL AND USPS MA IL Ms. Keri Heus ler Senior Hous ing Planner C ity of Cupertino 10300 Torre Avenue Cupertino, CA, 95014 kerrih@cupertino .org V : (408) 777 3251 Ms. Abby Ayende Management Ana lyst City of Cupertino 10300 Torre Avenue Cupertino , CA , 95014 Abigaila@cupertino .org V: (4 08) 777 7601 Re: Proposa l for Hear ing Exam iner Services for t he City of Cupertino Ms. Heusler and Ms. Ayende, Thank you for your interest in contracting w ith our office to provide the City of Cupert ino (hereinafter "the City") w ith hearing exam iner serv ices in con j unction with the City 's Be low Market Rent housing program (hereinafter "the Program"). We are pleased to provide the fol lowing information for your cons ideration . We are happy to provide add it iona l informat ion at your request. One of the key components of our pract ice is our comm itment to affordable hous ing. A large part of our practice is ded icated to support ing and encourag ing loca l go vernments to mai ntain, expa nd and/or protect their programs which further this important soc ieta l benefit. For example, we have worked c lose ly with other c it ies to ·support loca l init iatives such as good cause eviction ordinances and other measures related to ensur ing the ava il ab il ity of affordable hous ing in the Bay A rea. G iven our comm itment and pr ior experience we are un iquely su ited to provide hear ing examiner services to the City further ing these policy objectives . As requested, p lease f ind attac hed as Exhibit A to this letter doc umentat ion reflecting our proposed scope of work, list ing specific del iverables as requested. A lso inc luded as part of Exhibit A are cop ies of recent dec is ions o ur office has issued as part of our services to other jurisdictions . The first decision , reached fo ll owing a hearing in a matter involving the recently-enacted rent control ordinance in the City of A lameda, is our off ice's first decision to be upheld following an appl ication for a Writ of Mandate in the County of A lameda Superior Court. The second decision inc luded is a dec ision from a different j ur isdiction that reflected a complex interaction of the City's local ordinance w ith state law, and also required an exhaust ive consideration of t he evidence presented by the parties to reach a dec ision. Each Page 11 Chantler Law Offices of these prior decisions shows the general nature and format of the decisions we would propose to issue for the City. Exhibit 8 is the proposed "Serv ice Order " form to be used by the City to engage our services on a particular matter. We anticipate that this form would be used by the City to engage our services on a specific matter on an as -needed basis . Once we and the City hav e agreed on an acceptable form , it may be transmitted to our office in hard copy , via USPS or simi la r delivery serv ice to our office address above , by facsimile transmission to our office (650-618-0394) or in electronic /PDF format via e-mail. Exh ibi t C to this letter provides details about the annual ma ximum amounts we propose be payable to our office for services rendered under this contract and our proposed hourly rate for services. As previously discussed with Ms. Heusler, our office is happy to offer the City a discounted hourly rate for our services of $250.00 per hour. Included as part of Exhibit C is a sample invoice we would propose be used by our office for work under the anticipated contract. Obviously, every individual hear ing is different and will contain different issues to be adjudicated , however , the overall format of our invoic es would remain the same . We are happy to work with you as necessary to ensure that our invoices satisfy the prerequisites for payment currently used by the City 's Finance Department. Finally , Exh ibi t D to this letter contains confirmation of the insurance coverage requ ired by the City as a condition of the proposed contract. As reflected by the documents contained in Exhibit D, our office holds a Professional Malpractice Coverage policy in excess of the limits requested by the City , with a "general aggregate" limit of $3 ,000,000. A true and correct copy of the Certificate of Liability Insurance for this policy is attached to this lett er . Similarly , Ex hibit D confirms that our office also maintains automobile coverage in excess of the limits of liability required by the City , with "bodily injury" coverage of $1,000,000 . Finally, our office also maintains Commercial General Liability Insurance with coverage in excess of the limits requested by the City. Our coverage for this policy was recently raised to meet the requirements of the City with a coverage level of $2,000,000 per occurrence and a total General Aggregate coverage of $4,000 ,000. As previously discussed with Ms . Heusler, our office has no employees and thus does not carry , nor is required to carry , any worker 's compensation insurance . Please let Renee and I know if the re are any further documents or information that the City requires to proceed with the proposed contract for hearing examiner services . We look forward to working with you both in 2019 . Very Truly Yours , Derek W . Chantl e r Page I 2 Exhibit A Exhibit A Scope of Work: Provide se rvices to the City in the capacity as a contract hearin g examiner for Be low Market Rate ("BMR") program. Key Deliverables: l. As needed , draft and publi s h a ny standin g orders necessary to ensure the timely and equitab le adm ini stration of any h earings required ; 2. Sc h ed ul e hear in gs in conjunction with City e mployees based on s ubmi ssio n date of a pp eals to be considered and avail abi lity of space at C ity Hall and avai labi lity of staff of Chantl er Law Offices; 3. Co ndu ct evidentiary hearings at City Hall ; 4. Receive evid en ce su bmitted by the parties either prior to or during the hearing; 5. Research , review and app ly le gal ly binding state or federal law as necessary to adjudicate appeals und er the BMR program ; and 6. Draft a nd distribute written decision with in a reasonabl e time of the conclusion of the hearing and the s ubmi ss ion of all relevant ev id e nce. Thirty days is to be presumptively considered a "reasonable time " in the absence of good cause to extend this deadline, or provisions in the Ordinance or correspond in g Regulations adopted by the City. 7. Provide support and legal services related to the BMR program to the City if requested by the City. 2 3 4 5 6 7 8 9 IO 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 HOUSING AUTHORITY OF THE CITY OF ALAMEDA CITY OF ALAMEDA LANDMARK REALTY LLC , Appellant, vs. CITY OF ALAMEDA , Respondents. I. HEARING Administrative Citation No.: AC 02381 DECISION AFTER HEARING On May 22 , 2017, a hearing was held pursuant to the Rent Stabilization and Limitations on Eviction Ordinance of the City of Alameda (2016) (hereinafter "RSO ") 1• Appellant LANDMARK REALTY LLC was represented at the hearing by Dan Piccini , Esq and Joe Vargo. Respondent CITY OF ALAMEDA was represented at the hearing by Michael Roush , Esq. and John Le , Esq from the Alameda City Attorney 's Office. Also present at the hearing (although taking no part in the proceedings) were Ms. Megan Livernoche , a tenant residing in the property at issue , and Mr. Jeff Cambra from the City of Alameda Residential Rent Advisory Committee. 28 The RSO was codified in the Alameda Municipal Code Chapter VI , Article XV 6-58.10 et se and was approved by the voters of the City of Alameda on November 8, 2016. Landmark Realty v. City of Alameda-Case# AC 02381 Decision. -Page 1 II. UNDERLYING FACTS 2 The facts underlying this matter are not in dispute. The parties agree that Appellant owns 3 and manages a property located at 1901 Shore Line Drive, Unit 105 , Alameda, California , 4 94501. 5 The RSO contains a provision requiring that any landlord offer a one-year fixed term 6 lease to any existing tenant when the first notice of rent increase following the adoption of the 7 RSO is served on the tenant. RSO § 6-58.35. 8 A notice of rent increase was issued by Appellant to the tenant, Ms. Livernoche, in the 9 propetty at issue in this case with an effective date of September 1, 2016. Appellant did not offer 10 a fixed term one-year lease to Ms. Livernoche. 11 On or about November 21 , 2016 the City issued an administrative citation to Appellant 12 for failing to comply with the one-year fixed term lease requirement in the RSO. The citation 13 assessed a fine of two hundred and fifty dollars ($250.00) against Appellant. 14 Appellant deposited the proposed fine of two hundred and fifty dollars ($250.00) and 15 filed this instant appeal on or about December 19 , 2016. 16 III. ISSUE PRESENTED 17 The only issue presented in this Appeal is a challenge to the validity of the one year fixed 18 term lease requirement in the RSO in section 6-58.35(C). This section of the RSO reads , in 19 pe1tinent part: 20 "6-58.35. Off er of a One Year Lease 21 A landlord shall offer one time a one year lease to: 22 23 24 25 26 27 28 A. Any Prospective Tenant. B. Any current Tenant with a lease at the first time the Landlord served a notice of Rent Increase following the effective date of this Ordinance unless (1) the current lease is not a fixed term lease and the landlord has served on the Tenant a Notice to Vacate or (2) the tenant is in default under the lease and offering a lease to the Tenant may waive any claims the Landlord has regarding the default. lf the current lease is not a fixed term lease , the landlord shall not offer the Tenant a fixed term lease unless the Tenant requests such a lease. The Landlord must offer a Tenant a lease that has terms materially the same as the terms in the current lease as to duration , Housing Services and household composition provided such terms do not conflict with this Atticle. Landmark Realty v. City of Alameda -Case# AC 02381 Decision. -Page 2 2 3 4 5 6 7 8 9 IO II 12 13 14 C. Any c u rre nt Ten a nt o n a month to m o nth tenancy at the first t im e the Landlord served a notice of Rent Increase fo ll owin g the effect ive date of this Ord in ance unl ess the Landlord has notifi ed the Tenant that the Tenant is in defau lt und er the month to month t e na ncy a nd offering a lease to the Tenant m ay waive any c la im s t h e La ndl o rd h as regard in g the default." Alam eda Mun i. Code § 6-58.35. IV. RELIEF REQUESTED Appe ll ant requests that the fine imposed against LANDMARK REALTY LLC be waived and that the requirement und er th e RSO that a la ndl ord offer a fixed term lease be str icken or withdrawn from the Municipal Cod e . V. LEGAL ARGUMENT At the hearin g, A pp e llant advanced several arguments to s upport Landmark Realty 's contention that the one year lease req uire m e nt of the RSO should be deemed in valid . A. The Ordinance Precludes A Landlord From Pursuing An Eviction Even If Good Cause To Evict Exists. 15 Appe ll a nt contends that a juri sdiction w hi c h has an ordinance w hi c h seeks to regul ate 16 and control both rents and ev ictions effectively gra nts a t e nant an ind e finite right to remain in a 17 rental property ind efi nite ly if there is no good caus e to ev ict them from the property. This 18 co ntention is c learly true but that is the e ntire purpose of a n RSO suc h as the o n e in place in this 19 jurisdiction. This alone , do es not m a ke the ordinance invalid , or require that the section of th e 20 RSO at iss ue in this m atte r be stri cken. 2 1 The ord in a nce, on it s face , however, specifically c reates an exempti o n fo r a landl ord w ho 22 has "good cause" du e to a default on the paii of th e tenant, from the requirement to offer a one- 23 year lease if t he la ndlord has issued a notice regarding the d efault to the t enant prior to t h e date 24 of the rent in crease . RSO § 6-58.35(C). 25 In o rd e r for there to be a va lid not ice of default iss ued in the City there mu st be good 26 cause to do so. Appe ll ant 's argu m ent that a land lo rd is prevented from pursuing a n evictio n due 27 to thi s requirement is therefore invalid. 28 Landmark Realty v . City of A la meda -Case # AC 02381 Decision. -Page 3 B. The One Year Lease Provision Effectively Creates An "Option Right" Which Amounts To An Unconstitutional Taking Without Due Process. 2 The Fifth Amendment of the United States of America prohibits the taking of any 3 property by the government without due compensation. US Constitution Y 1 Amendment. The 4 fourteenth amendment of the constitution of the United States of A merica, in relevant part, 5 prohibits the deprivation of I ife, liberty or property without due process. US Co nsUtution 1411, 6 Amendment. 7 Appellant contends that the ordinance, as written constituted a violation of both the Fifth 8 Amendment of the United States Constitution (as a regulatory taking). It also contends that the 9 ordinance violates the Fourteenth Amendment as it does not provide what Appellant contends is 10 the required level of due process required prior to effectuating such a taking. 11 The question of whether or not a rent control ordinance is an unconstitutional taking has 12 been considered by the Coutts , and has been resolved against Appellant's position for many 13 years. In particular, the Supreme Coutt of California has examined this issue and concluded that 14 a rent stabilization ordinance of the type that exists in Alameda (which controls both rents and 15 ev ictions) is not a regulatory taking. Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129 see 16 also Fisher v. City of Berkeley (1984) 37 Cal.3d 644. The question of whether an RSO is aper 17 se taking has therefore been resolved 2. 18 19 20 2 1 22 24 25 26 27 28 C. The One-Year Lease Requirement Is Preempted By State Law California law permits a landlord to increase rent during a month to month tenancy upon proper, written notice to the tenant during the tenancy. Ca l. C iv. Code§ 827. Appellant argued that Civil Code § 827 creates a right in the landlord of a property to increase monthly rents conditioned only upon the issuance of proper notice to the tenant. Appellant contends that the additional requirement of the RSO that a landlord offer a one year lease before raising the rent is therefore preempted by Section 827 , and invalid. It is possible, however , for an RSO to be invalid "as applied" to a particular property, however Appellant did not raise this issue in his papers , or present such argument at the h earing, so this decision will not address this issue further. Hensler v. City of Glendale (1994) 8 Ca l. 4tn 1. Landmark Realty v. City of Alameda -Case# AC 02381 Decision. -Page 4 In response , Respondent cited the case of Roble Vista Associates v. Bacon , 97 2 Cal.App.4th 335 (2002), which directly addressed the contention raised by this Appeal -to wit, 3 whether a municipal requirement to offer a tenant a one-year lease and providing a defense to 4 eviction for a landlord's failure to do so is preempted by state law. Respondent contends that the 5 Roble Vista Associates court's rejection of the position that Appellant advances here is 6 controlling. 7 Appellant sought to factually distinguish Roble Vista Associates at the hearing. Appellant 8 argued that the Roble Vista case arose from an unlawful detainer complaint, whereas the instant 9 appeal arises from an administrative citation. While Appellant is correct that there are 10 differences in the type and nature of this appeal from the procedural posture of Roble Vista, 11 those differences are immaterial to the ultimate question in this hearing: whether or not Civil 12 Code section 827 preempts the requirements of the RSO. The Roble Vista Associates decision is 13 binding precedent on that question: Civil Code section 827 does not preempt a provision of a 14 municipal law that requires a landlord to offer a one year lease to a tenant. Id. at 342. 15 D. The Ordinance Does Not Provide Any Specific Guidelines For The Contents Of 16 The Lease To Be Offered. 17 Appellant asse1ied , correctly, that the terms of the RSO only require that a lease be 18 offered but that it does not make any attempt to control the contents of that lease . According to 19 Appellant, this results in the ordinance encouraging landlords to act in bad faith, merely by 20 offering a lease with terms and conditions that are sufficiently outrageous that any rational tenant 21 would refuse to sign a new lease. According to Appellant, the 1-year lease requirement, 22 therefore , merely adds inefficiency and unnecessary delay. 23 Respondent City conceded , in opposition , that this section of the ordinance could hav e 24 been written more effectively, but argued that the RSO presumes good faith on the part of 25 landlords within the City when they offer the I-year lease which is required by the RSO. 26 Respondent also argued that the intent of the voters of the City and of the City Council was to 27 provide stability to both landlords and tenants within the City. Counsel for Respondent also 28 stated that many landlords within the City have offered alternative lease agreements to tenants. Landmark Realty v. City of Alameda-Case# AC 02381 Deci s ion . -Page 5 Counsel argued that it was permissible to offer a lease with a shorter duration but a lower rent 2 increase or a longer duration with a larger monthly rent increase and still be in comp liance with 3 the RSO. 4 Appellant 's argument that there is no restriction upon the actual contents of the offered 5 lease is supported by the plain language of this provision of the ordinance. 6 The omission from the RSO of language controlling the contents of the required one-year 7 lease therefore does not invalidate the requirement that a lease be offered. It merely leaves the 8 content of the lease agreement actually up to the discretion of the parties and the "good faith " of 9 the landlord. 10 II 12 VI. 1. DECISION Section 6-58 .35 of the Ordinance does not constitute a restr iction on landlords from 13 regaining possession of their property, where good cause exists under the terms of the Ordinance 14 to do so. 15 2. Section 6-58.35 of the Ordinance, specifically, and Rent Stab il ization Ordinances 16 in general , are not taki ngs and therefore they are not unconstitutional. 17 3. Section 6.58.35 of the Ordinance is not preempted by state law, specifically 18 California Civil Code section 827. 19 4. Section 6-58.35(C) of the Ordinance does not conta in language t hat seeks to control 20 the contents of the required one-year lease. 2 1 5. The adm inistrative citation issued to Appe l lant sha ll be uphe ld and the fine of two 22 hundred and fifty do ll ars ($250.00) is a lso upheld as previously imposed. 23 24 25 26 27 28 DATED: June 20, 2017 Landmark Realty v. City of Alameda-Case# AC 02381 DEREK W. CHANTLER Hearing Officer Decision. -Page 6 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 24 25 26 RENT STABILIZATION BOARD CITY OF EAST PALO ALTO JEFFEREY ALAN WILSON, Petitioner, vs. WORKING DIRT LLC , SUE KAREN BROCK AND PATRICK BROCK , Respondents. I. HEARING Case No: 20170005, 20170006 & 20170007 DECISION AFTER HEARING Petitioner JEFFEREY ALAN WILSON (hereinafter, "Petitioner") filed his petition with the Rent Stab ili zation Program (hereinafter "th e RSP") against Respondents WORKING DIRT R2 , LLC (hereinafter "Working Dirt"), SUE KAREN BROCK (hereinafter "Ms. Brock") and PATRICK BROCK (hereinafter "Mr. Brock; col lective ly Mr. Brock, Working Dirt and Ms . Brock shal l be referred to hereafter as "Respondents") on February 15 , 2017. As of Apri l 7 , 2017 , Petitioner was a tenant at 475 Bell Street, East Palo A lto , California, 94303 1• Ms. Brock is 27 Respondent Brock submitted a stipulation and order from the San Mateo County Superior Court as a Respondent's exhibit in response to Wi ls on's petition. T he stipu lati on for entry of 28 judgment, dated March 23 , 2017 and filed in the San Mateo County Superior Court , contained a provision w herein Petitioner agreed to surrender possession of the Bell Street property to Wilson v. Working Dirt LLC et a l -Case # 20170005 , 20170006 & 20 170007 Decision. -Page I Petitioner's landl ord and subl eases a room in the aforementioned property to Petitioner, as of the 2 date of this hearin g. Working Dirt is the owner of the property a nd leases th e e ntire property to 3 Ms . Brock2. 4 A hearin g o n this petition was sc hedul ed and he ld on Ap ril 7 , 2 0 J 7 at 9:30 AM . Prese nt s at the hearin g was Petit io ner, Respondent Ms. Brock3, a nd Lau ra Gi n g he r and W hitn ey 6 Ballestrazze, representativ es of Respondent Working Dirt. Mr. Victor Ramirez , RSP 7 Ad mini strator for the C it y of East Palo Alto (he rei n after "the C it y"), was a lso present and gave 8 testimony . Mr. Donald Timoteo , a code e nforce m e nt officer for the C it y was present pursuant to 9 a c iv il s ubpo e na iss ued pursuant to East Palo A lto Municipal Code§ 14.04.070(D) a nd RSP 10 Regulation§ 1500(A)(13)(f)(i), testifying in his offic ia l capac it y. 11 Fo llo wi ng the h earin g , th e record was left open for ten (10) days , until April 17 , 20 17 , to 12 a ll ow time for Respondent Working Dirt LLC to submit the wr itte n res id e nti a l lease agreem e nt 13 as an ex hibit for cons id eratio n in thi s petition. This document was rece ived , via e m a il to Mr. 14 Ramirez, o n Apr il 10 , 2 017. 15 16 II. ISSUES PRESENTED 17 Petitioner so u g ht a re nt re du ction for a ll eged violations of the Rent Stabili zation and Ju st 18 Cause for Eviction O rdin ance of the C it y of East Palo A lto (20 10) (hereinafter "RSO ") and the 19 Rules and Regulations (hereinafter "th e Regulations") adopted b y the C it y purs ua nt to th e RSO. 20 Petitioner a ll eged that Respondents ha ve violated the RSO by (a) failing to registe r the 21 property with the RSP; (b) d e mandin g a nd retaining re nt in excess of th e permitted rent ce ilin g 22 for th e rental unit ; (c) reducing hou si n g services , m a inte nan ce a nd (d) v io lation of the warra nty 23 of habitability . Spec ifica ll y , Petiti o ne r a ll eged the following ex istin g iss ues w ith the property: 24 Respondent Brock o n or before Apri l 13 , 20 17 . This doc um e nt was m a rke d as Respondent's Exhibit A a nd considered as ev id e nce in thi s petition. 25 2 Petitioner and Respondent Workin g Dirt LLC eac h presented a co p y of a facia ll y valid writ 26 of possession , pursua nt to a San Mateo Co unty S uper io r Co urt judg m e nt that was e nte red in favor of Working Di11 a nd against Ms. Brock on March 2 1, 20 17 , this Writ of Possession was marked as 27 Petitioner's Exhibit 19 a nd Respondent's -Exhibit Band admitted into evidence . 28 3 Ms. Brock appeared o n h er own behalf a nd on behalf of h e r hu s ba nd , nam ed Respondent Patrick Brock. Wilson v. Working Dirt LLC et a l -Case# 20 170005 , 20 1700 06 & 20 17000 7 Decision . -Page 2 I. Loss of, and/or insufficient, hot water or water supp ly; 2 2. Defective, and/or broken heater or gas facilities; 3 3. Unsafe, and/or or inoperative, e lectrical lighting, wiring or outlets ; 4 4. lnfestation of the building with ants and vermin , including rats and/or mice ; 5 5. Missing stairways , or stair railings that are broken, rotting or missing; and 6 6. Missing fire extingui shers. 7 Working Dirt LLC filed a response to t he petition on March 6 , 2017 . Working Dirt 8 opposed the petition on the gro und s that the rental property in question is a single-family 9 residence and , therefore, exempt from the registration requirements of the RSO. 1 o Ms. Brock fi led no response to the petition prior to the hearing. II 12 13 14 III. RELIEF REQUESTED In the petition , Petitioner requested several specific rent reductions , as fo ll ows: 1) A rent reduction of twenty one percent (21%) from February, 2015 to April 2015 15 for a n a ll eged ly inefficient water heater; 16 2) A rent reduction of twenty one percent (2 1 %) for an allegedly broken h eater for 17 the month s of October, 20 14 to present ; 18 3) A rent reduction of four percent (4%) for inoperative o r defective wiring from 19 April , 2015 toDecember2016 ; 20 4) A rent reduction of seven percent (7%) for ant and rodent infestation during the 2 1 months of October, 20 14 to present; 22 5) A rent reduction of two percent (2%) for broken stairs or rai lin gs for the months 23 of October, 20 14 to present, 24 6) A rent reduction of fifteen percent (15%) for an a ll eged inoperative stove during 25 the months of October, 20 14 to December, 2016 , 26 7) A rent reduction of fifteen percent (15%) for an a ll eged inoperative refrigerator 27 for the months of October, 20 14 to present and a rent reduction of fifteen percent (15%) for a 28 Wilson v . Working Dirt LLC et a l -Case # 20 170005 , 20170006 & 20 170007 Decision. -Page 3 redu ction of housing services based on inoperative laundry facilities from February 20 16 to 2 February2017 4 . 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 IV. EVIDENCE A. Petitioner's evidence regarding reduction in services. Petitioner submitted the following exhibits in support of his rent reduction request: 1. Exhibit 1: Unlawful Detainer Answer Filed by Petitioner February 14 , 2017 San Mateo County Case Number 17-UDL-00079, Memorandum of Points and Authorities dated February 14 , 2017 , Aerial Photographs of Property at issue in this case, Administrative Repo1t for instant petitions prepared by staff at the Rent Stabilization Program, Counter Request to Set for Trial in San Mateo County Case Number 17-UDL- 00079 and asso1ted documents related to Respondent Working Dirt LLC. 2. 3. Exhibit 2: Aerial view of property labelled with three separate rental units. Exhibit 3: Typewritten page titled "House rules " signed by Petitioner and by Ms. Brock, along with partial lease agreement (Page 1 of 3 and Page 3 of 3). 4. Exhibit 4: Rent receipts for eight hundred dollars ($800.00) for the month s of October, 2014 through July , 2015 inclusive. Rent receipt for August, 2015 for eight hundred and fifty dollars, rent receipts for May, June, October and December, 2 016 for nine hundred and fifty dollars ($950.00). Notice of rent increase dated July 27 , 2015 stating intention to increase rent stating August I , 2015 to nine hundred and fifty dollars ($950.00) per month. 5. Exhibit 5: A series of emails between counsel for Ms. Brock, James Frangos , Esq., Jason Tarricone , Esq. (counsel assisting Mr. Wilson at that time) and Petitioner regarding settlement agreements to resolve unlawful detainer disputes . 6. Exhibit 6: Photographs of vehicle accident and injuri es suffered by Petitioner 26 also photographs of dead mice , dated November 24, 2016 a thanksgiving turkey with the 27 4 Petitioner also presented evidence in suppo1t of a claim for lost wages. The RSO does not confer the authority to adjudicate tort or damages claims arising the patties. None of them are direct! 28 authorized under the Ordinance. This decision will not make any finding of fact or conclusion of la regarding this claim. Wil so n v. Working Dirt LL C et al -Case# 20170005 , 20170006 & 20170007 Deci s ion. -Page 4 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 caption that it was cooked on a BBQ due to a broken stove, a broken thermostat, dated November 28 , 20 16 with a caption a lle g in g that the thermostat had been broken for two years , a photograph of a portable space heater dated November 28 , 2016 and a photograph of an alleged ly blown electrica l out let in Petitioner 's room dated November 28 , 2016. 7. Exhibit 7: Medical records from Stanford University containing details pf Petitioner 's medical issues. 8. Exhibit 8: Payro ll records from All C iti es Limousine Inc , Dated November 17 , 2015 and emp loyee payroll log for Petitioner dated February 9 , 2016. 9. Exhibit 9: Summons, Comp laint and Civ il Case Cover Sheet for San Mateo County case number 17-UDL-00079 dated January 25 , 2017 , Prejudgment C laim to Right of Possession and other court documents related to same unlawful detainer case. Emai l from Petitioner to Mr. Ramirez and Ms. Kriegh (also an RSP emp lo yee), along with a response from Mr. Ramirez to Petitioner. 10. Exhibit 10: Answer -Un lawfu l Detainer dated October 24 , 2016 San Mateo County Case Number 16-UDL-00422 and other co urt documents related to the same unlawful detainer case. 11. Exhibit 11: Req uest for Dismissal dated November 22 , 2016 for San Mateo County case number 16-UDL-00482, along with multiple court documents from same unlawful detainer case. Letter from James Frangos, Esq. dated October 27 , 2016 12. Exhibit 12: Request for restraining order dated Apri l 10 , 2015 filed by Petitioner against Mr. Brock, a lon g with s upportin g documentation and futiher medical records of Petitioner. 13. Exhibit 13: Form Interrogatories for San Mateo Co unty Case N umber 17-UDL- 0079 propounded by Pet ition er upon Ms. Brock dated February 22 , 2017, a lon g with Ms . Brock 's responses to same, dated March 15 , 2017 . 14. Exhibit 14: Counter Request to set for Tr ial filed by petitioner in San Mateo County Case Number l 7-UDL-00079 dated February 22 , 2017 (patiia l duplicate of Wilson v. Working Dirt LLC et a l -Case # 20 170005 , 20 170006 & 20 170007 Decision. -Page 5 2 3 4 5 6 7 8 9 10 11 12 13 documents contained in Exhibit 1), City of East Palo Alto Code E nforcem e nt Complaint Form signed by Petitioner and dated February 21 , 2017 , Notice of Entry and Inspection sent to Petitioner by counsel for Ms. Brock specifying entry on February 23 , 2017 relating to defects alleged in unlawful detainer case 17-UDL-00079, Notice of Violation issued to Working Dirt by Code Enforcement dated February 27 , 2017 and Menlo Park Fire Protection District fire safety inspection report, dated February 27 , 2017. 15. Exhibit 15: Photographs taken by City of East Palo Alto Code Enforcement on February 27 , 28 , March 24 and April 3 , 2017 showing conditions in the property. 16. 17. Exhibit 16: A series of emails between Petitioner and multiple other persons. Exhibit 17: Photographs taken by Petitioner showing the conditions in the property. 18. 19. Exhibit 18: Documents charting the recent weather conditions in East Palo Alto.5 Exhibit 19: At the hearing Petitioner also submitted a duplicate of a Writ of 14 Possession issued by San Mateo County in unlawful detainer case number 17-UDL- 15 00238 requiring that possession of the property be restored to Working Dirt and evicting 16 Ms. Brock from possession of the property, dated March 21, 2017. 17 Rent Stabilization Program Administrator, Mr. Victor Ramirez, presented the following 18 exhibits for consideration in the hearing from the files of the Rent Stabilization Program. 19 20 21 22 23 24 20. Exhibit 20: Administrative report of the RSP prepared in advance of this hearing, dated March 30 , 2017. 21. Exhibit 21: Civil Subpoena served upon Mr. Donald Timoteo , Code Enforcement Officer for the City dated March 30, 2017 requiring Mr. Timoteo 's presence at the hearing. 25 5 Despite being accorded two separate opportunities during the hearing to make a "closing statement" Petitioner also submitted a link to a YouTube video to RSP Administrator, Mr. 26 Ramirez, on April 13 , 2017, after the close of the hearing. While the record was left open so that Working Di1i could submit a copy of the lease agreement between Working Dirt and Ms. Brock, 27 with Petitioner 's agreement, it was not left open more generally for the submission of any other evidence. To consider this late-submitted ev idence absent extraordinary circumstances would be 28 prejudicial to Respondents. The YouTube v ideo was therefore not viewed or considered in reaching this dec ision . Wilson v. Working Dirt LLC et a l -Case# 20 170005 , 20170006 & 20170007 Decision . -Page 6 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 24 25 26 27 28 22. Exhibit 22: Photograph , taken by Mr. Ramirez on February 28 , 2017 , of bathroom area in third hou s in g unit o n the property showing indicia that someone was living in the third unit. Petitioner testified that the Stipu lati o n and Order for Entry of Judgment in San Mateo County Case Number l 7-UDL-00079 , dated March 23 , 2017 (Respondent's Exhibit A), specificall y reserved the right to proceed with this hearing and to investigate and adjudicate the rights afforded to residents of the City under the RSO and other app li cab le ordinances of the City. This was not disputed by Respondent. Rental Un its at the Property Mr. Wilson testified that there were three separate structures o n the property which were being used as dwelling units until recently. These three structur es were (1) the main residential structure; (2) a detached garage that was being used as a converted dwelling unit ; and (3) a third structure known as the "hobby room" which has also been converted to u se as a separate swel lin g unit. Each room in t he main house had a separate apartment number and that his room was designated as Apmiment 4. These apartment numbers were removed by Ms. Brock or her agents , subsequent to the commencement of the unlawful detainer proceedings brought by Ms. Brock agai nst Mr. Wi lson. Mr. Wilson testified that it was very confus in g about what the appropriate rent for his room shou ld have been , as the prope1iy was never registered with the RSP and Ms. Brock's pleadings in the unlawful detainer cases cla im ed that varying amounts of rent were due. Mr. Wi lson did not know how many people were residing in the main house with him because people wou ld move in and out of the property frequently. He estimated that approximately e ight people lived in the main house. At one point, there were fourteen people li ving on the property in total with him , including in the converted garage and the converted hobby room. This number included one or more persons who were residing on the property in a "too l shed "6 . According to Mr. Wi lson , there was an individual named Mark who once li ved in the converted garage, but has since moved into one of the downstairs bedrooms in the main house at the time of this hearing. There was an additional occupant of the converted garage, 6 Although no other ev idence of the "tool shed " on the property being used as a dwelling unit was presented , this al legation , if true , wo uld const itute a fourth dwelling unit on the property. Wilson v. Working Dirt LLC et al -Case # 20170005 , 20170006 & 20170007 Decision . -Page 7 named Jerry , who resid ed with Marl<. Mr. Wilson testifi ed that neith er Mr. or Mrs. Brock ever 2 resided at the property. 3 Mr. Wilson stated that an individual was residing in the "hobb y room " at the time that the 4 City conducted a code enforcement inspection and that Ms. Brock instructed that individual to s leave , so as to give the impression that the "hobby room " was not being used as a dwelling unit. 6 Mr. Wilson stated that he did not know this individual 's name , but knew that he worked as a 7 security g uard employed by Mr. Brock. Mr. Wilson stated that this individual was still living 8 there at the time of the inspection by the City. 9 Rent Paid bv Petitioner 10 According to Mr. Wilson , when he first moved in during August 2014 , he shared a room 11 downstairs with another individual and paid five hundred dollars ($500.00) per month in rent. 12 Shortly thereafter , in approximately November 1, 2014, Mr. Wilson moved upstairs into a 13 private room. He began paying eight hundred dollars ($800.00) per month in rent at that time . 14 Mr. Wilson test ified that there was a verbal agreement about his assigned parking space, 15 the household chores assigned by Ms. Brock, and the kitchen and laundry facilities which are not 16 recorded in the written residential lease agreement. 17 The second rent increase ( dated July 28, 2015) was given to Mr. Wilson, in writing , by 18 being slipped under his door , with only four days ' notice in advance of the intended date of the 19 rent increase , which was August 1, 2015.7 The notice ofrent increase , dated July 28, 2015, was 20 simply signed by "The Management". Mr. Wilson testified that he did not know who had sent it 21 to him and if it was actually valid. Mr. Wilson began paying the increased amount of rent as 22 demanded , despite his misgivings. 23 Mr. Wilson was confused about who his landlord actually was. At times it seemed to be 24 Working Di1t and at times it appeared to be Mr. & Mrs. Brock. Mr. Wilson testified that he sent 25 letters to Working Dirt care of a post office box in Menlo Park after he dis cove red that Working 26 Mr. Wilson Also Presented Argument And Evidence Regarding State Law Requirements 27 To Register A "Clean And Sober Living" House , S uch As Documents Submitted In Suppo1t Of This Petition Appear To Show That Mr. & Mrs. Brock Were Running At The Property. This Issue 28 Is Beyond th e Jurisdiction of This Hearing and Therefore Will Not Be Addressed in This Decision. Wil so n v. Working Dirt LLC et al -Case# 20 17000 5, 20170006 & 2 0170007 Decision. -Page 8 Dirt was the property owner. Mr. Wilson paid his rent directly to Mr. or Mrs. Brock and not to 2 anyone representing Working Di11. Mr. Wilson described Mrs. Brock 's reluctance to give him a 3 written rental agreement and stated that he "had to force her" to give him one. Mr. Wilson also 4 testified that he had drafted an updated rental agreement, to be used by Mr. & Mrs. Brock with 5 all of the tenants in the property, but that it was never used by either Mr. or Mrs. Brock. Mr. 6 Wilson stated that he did not remember ever seeing either Ms. Gingher or Ms. Ballestrazze at the 7 property prior to the inspection by the city on February 27, 2017. 8 Conditions at the Rental Unit 9 Mr. Wilson testified that , during his tenancy, he and the other tenants often had no hot Io water. Sometimes, the water was shut off completely. He also testified that the heater never 11 worked , until it was repaired after he filed the instant petition and shortly after red tags and 12 orange tags were issued by the City. During the times when the heater was broken, residents 13 would often light the broiler on the stove and use that to heat the house. According to him , after 14 the heater was repaired , gas service to the property was subsequently shut off. Because the 15 property has gas heating , and gas cooking appliances , Mr. Wilson was again unable to make use 16 of either. 17 The utilities , such as water and gas , began being disconnected about a year after he 18 moved into the property. There were attempts made to repair the deficiencies at the property but 19 those attempts were unsuccessful. Wilson testified that Ms. Brock was a good landlord and that 20 he and the other residents were happy, even though there may technically have been violations of 21 tenant laws or similar. 22 Petitioner testified that, around the time that the garage conversion was completed, he 23 started experiencing issues with the electricity in his room. Mr. Wilson has a computer in his 24 room that he uses to design a computer game in his spare time. He had been using the same 25 computer in that room successfully before the garage conversion was completed. After the 26 garage conversion , however, the circuit breakers began to trip when he used the computer. 27 Mr. Wilson testified that, by using the computer, a space heater and personal heating pads 28 to attempt to stay warm, he "kept melting wires ". Mr. Wilson was very concerned about an Wilson v. Working Dirt LLC et al-Case# 20170005 , 20170006 & 20170007 Decision . -Page 9 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 26 27 28 electrical fire. At around the same time as the final unlawful detainer complaint was filed Mr. Brock brought an electrician to attempt to make repairs to the electrical circuit in Petitioner 's room. As part of those repairs the electrician opened up a hidden panel in the wall to access the wiring. Once the hidden panel was opened Mr. Wilson testified that he began experiencing issues related to mold , mice and the smell of mouse urine in his room. Mr. Wilson testified that there has been an ant problem in the property ever since he moved in. He has woken up in the middle of the night, in his bed , covered in ants. Mr. Wilson stated that he attempted to spray raid and other insecticides but that did not solve the problem. Mr. Wilson knew that there were mice and that he had spoken to other tenants who told him about mice in their rooms but that he didn 't personally experience any issues relating to the mice until the hidden panel in his room was opened to repair the wiring, which was shortly before this petition was filed. He would wake up in the mornings and there would be mouse feces on his bedsheets , which indicated to him that there were a lot of mice present. Mr. Wilson stated that he hasn 't seen any mice at the property for a few weeks, so the problem may have been resolved. Mr. Wilson stated that the stairs leading up to his room were damaged and that there was one broken section of railing on the stair. On occasion when Mr. Wilson is forced to use a cane to get around he has slipped on the stairs. He does not consider the stairs to be "handicap friendly". Mr. Wilson also expressed his opinion that there ought to be fire extinguishers installed in the property and also discussed the failure of the kitchen refrigerator appliance and the loss of his food which was caused by it. Additionally, Mr. Wilson discussed the parking situation at the propetiy and the problem with damage being caused by other residents to his work limousine. Mr. Wilson also discussed the lack of laundry facilities in the property. There was a washer and dryer present in the property when he moved in , but the dryer was broken for a long time , despite many tenants (including Mr. Wilson) reporting it to Mr. Brock and asking for a repair to be made. Wi lson v. Working Dirt LLC et al -Case# 20170005 , 20170006 & 20170007 Decision. -Page 10 Mr. Wilson testified that, for the last few months , the mold problem in the property was 2 so bad that he cou ld smel l it as he came in the door. For approx im ate ly eighteen months the 3 upstairs bathroom , located next to Mr. Wilson 's room , was leaking water into the walls and floor 4 which he believes is the cause of the mold infestation. Mr. W il son testified that you could see 5 the mold growing under the staircase leading up to his upstairs room. He first noticed the mold 6 issue in approximately July of 2016. Mr. Wilson does not believe that the mold issue has been 7 resolved. 8 The garage and the hobby room were "red tagged " by the City as a result of the 9 inspection and the main house was issued a different tag8, which gave ninety (90) days to repair 10 the conditions specified as defects and/or code vio lations . 11 Testimony ofRent Stabilization Program Administrator 12 Mr. Ramirez authenticated the Administrative repoti marked as Exhibit 20 which t 3 included a code enforcement inspection of the prope1iy on February 28 , 2017 and the associated 14 findings contained therein. Mr. Ramirez testified that the prope1iy at issue in this petition had 15 never been registered with the RSP, that Working Dirt are the legal owners of the prope1iy , that 16 the county records indicate that the property is a single-family residence and that, at the time that 17 Exhibit 20 was completed there were three residential dwelling units on the prope1iy. 18 At the time of the site visit, on February 28 , 2017 , all three dwelling units on the property 19 appeared to be in use as a dwelling unit. At the time of the inspection , there was an individual 20 present in the converted garage whom Mr. Ramirez later found out was residing in that garage. 21 Mr. Ramirez testified that he later discovered that there were at least two males residing in the 22 converted garage at the time that the red tag was issued by Code Enforcement. He subsequently 23 spoke to them at the RSP office and informed each that they had the right to file a petition , just 24 as Mr. Wilson had done. Neither of these individuals had filed a petition with the RSP as of the 25 date of this hearing. 26 27 8 Mr. Wilson identified the tag placed on the main house as a "green tag", however 28 according to the testimony of Mr. T im oteo , the tag placed on the property was formally identified as an "orange tag ", despite the green co lor of the paper on which it was printed. Wilson v. Working Dirt LLC et al -Case# 20170005 , 20170006 & 20170007 Decision . -Page 11 Mr. Ramirez testified that he a lso inspected the property on April 6 , 2017 , the day before 2. this hearing was held , and confirmed that the two additiona l dwelling units-the garage and 3 "hobby room" -had been unconverted . The garage had been reco nverte d for us e as a garage and 4 the back unit known as the "hobby room ", which was in use as a separate dwelling unit at the 5 time of Mr. Ramirez ' first visit, also been reconverted to its normal use as part of a single-family 6 residence. 7 During Mr. Ramirez ' testimony, and a break in the hearing, he examined the files of the 8 RSP for the names of the males who were residing in the converted garage . The individual for 9 whom a name existed in RSP records was named Mark (no last name given).9 1 o Testimonv by East Palo Alto Code Enforcement 11 Mr. Dona ld Timoteo , a code enforcement official employed by the City, testified that he 12 first learned about complaints involving the property when Mr. Wilson came into the Code 13 Enforcement Office and filled out a complaint form. Mr. Timoteo's recollection was that this 14 occurred in late February, 2017. Mr. Timoteo testified that he helped Mr. Wilson personally on 15 that occasion , and assisted him filling out the complaint paperwork. 16 After receiving the complaint from Mr. Wilson , Mr. Timoteo investigated the property on 17 February 28 , 2017. Prior to that date , Mr. Timoteo researched the property in the records of San 18 Mateo County and confirmed that the registered owner of the property was Working Dirt. 19 During his investigation Mr. Timoteo researched archived permits for the property , including any 20 identifying which structures were should be on the property according to government records. 21 He also researched any prior cases involving the property. He learned that there was one former 22 Co de Enforcement case involving the prope1ty which was , according to him , from a long time 23 ago. Mr. Timoteo did not recall the exact year of that case. Mr. Timoteo testified that, to the best 24 of his recollection , based upon his investigation the only permits issued for the property 25 previously had been for repairs and not for new construction , specifically to replace a water 26 heater and to repair fire damage to one of the structures. 27 28 9 "Mark" had also provided hi s contact information to Mr. Ramirez. Wilson v. Working Dirt LLC et al -Case# 20170005 , 20170006 & 20170007 Decision . -Page 12 Mr. Timoteo inspected the main house at the property. He found significant damage in 2 the living room area; evidence of a rodent infestation in the kitchen area ; a water heater that was 3 not secured according to code and missing smoke and carbon monox ide detectors. He also 4 concluded that the gas pipes in the laundry room were not up to code ; the dryer was not properly 5 gro unded and that and that not all windows on the property were sufficient to allow proper 6 emergency egress. Mr. Timoteo testified that he observed multiple dead rodents in the attic 7 space next to Mr. Wilson 's room upstairs 8 On his second or third inspection of the property, Mr. Timoteo had access to , and was 9 able to inspect, the converted garage and the "hobby room." When the garage was inspected he 10 found that it had been converted into a living area and that it contained furniture and personal 11 effects that indicated to Mr. Timoteo it was being used as a dwelling. Mr. Timoteo found the 12 same indicia of habitation in the hobby room. Menlo Park Fire Department also assisted with the 13 investigation and inspection. 14 After conduct in g his inspections , Mr. Timoteo concluded that the converted garage and 15 the hobby room were unsafe for habitation. Both structures were then "red tagged" by the C ity. 16 According to the testimony, "red tag" means that the structure is unsafe for human habitation or I 7 occupancy. A "red tag", requires all individuals to immediately exit the structure, and that repairs I 8 must be carried out before anyone may re-enter the property. Notifications to former tenants 19 about relocation assistance , a long with the red tags themselves, were posted on the exterior of 20 both the converted garage and the hobby room. 2 1 Mr. Timoteo also concluded as a result of his inspections t hat the main house was unfit 22 for human habitation. As a result, the main house was "orange tagged." According to Mr. 23 Timoteo, an "orange tag" m eans that entering and exiting the structure temporarily is permitted , 24 but that any noted conditions must be repaired within ninety (90) days from the date of the 25 "orange tag." Mr. Timoteo noted that the "orange tag" that was placed upon the main hou se was 26 printed on green paper, but that the contents of the notice were those that normally are in c luded 27 in an "orange ta g." 28 Wil so n v . Workin g Dirt LL C et al-Case# 20170005 , 20170006 & 20170007 Decision. -Page 13 The orange tag was posted on the exterior of the main house , a lth ough the relocation 2 ass istance information was not posted. 3 S in ce the properties were tagged , but prior to the hearing, Mr. Timoteo returned to the 4 prope11y for a fu11her in spection . At that time , he visually confirmed that t he garage has been 5 unconve11ed , the hobby room has been returned to it s origina l co nfi gurat ion and the unsafe 6 conditions in both structures which led to their tagging hav e been rectified. 7 8 B. Evidence Submitted by the Brock Respondents regarding reduction in services and excess rent received. 9 Respondent Mrs. Brock submitted the following exhibits in opposition to Petitioners' rent 1 o reduction request: 11 1. Exhibit A: Un lawful Detainer Stipul ation for E ntry of Judgment dated March 12 23 , 2017 , San Mateo Co unt y Case Number 17-UDL-00079 (Brock v . Wilso n). 13 Ms. Brock testified that s he first rented the prope1iy from Working Dirt during 20 13. 14 Mrs. Brock did not recall the initial rent amou nt due to Working Dirt, o nl y that it was a one yea r 15 agreement. The rent was in creased in 2015 , when pursuant to a written notice of rent increase 16 Working Dirt raised it by approximate ly $165.00 per month. As of the date of the hearing , the 17 rent due fro m Mrs. Brock to Working Dirt was three thousand five hundred and fifty dollars 18 ($3 ,550.00) per month. Mrs. Brock testified that she told Working Dirt that the purpose of her 19 renting the property was to run a c lean a nd sober li v in g hous e at the time that the original lease 20 agreement was signed . Mrs . Brock testified that all residents/tenants are referred to her by 2 1 another organizati on , Free At Last. Mrs. Brock testified that her intention was to he lp people so 22 sh e ch arged residents/tenants a flat fee of five hundred dollars ($500.00) per month for a shared 23 room and eight hundred dollars ($800 .00) per month for a single room. A ll she wanted to do was 24 to make sure that she had the re nt to pay to Working Dirt. Mrs. Brock testified that, whe n a 25 tenant is late paying the rent, s he did habitually c harge a late fee of fifty dollars ($50.00). The 26 main house has fo ur rooms , two are single rooms and two rooms are shared . 27 Mrs. Brock testified that the garage and the hobby room had a lr eady been converted to 28 contain their own bathrooms a nd cooking facilities when she first leased the prope11y from Wilson v. Working Dirt LLC et a l-Case# 20 170005 , 20170006 & 20170007 Decision. -Page 14 Working Dirt. Mrs. Brock denied spending any money to convert the garage and the hobby 2 room into dwelling spaces. 3 Mrs. Brock testified that she doesn 't raise the rent on the tenants , except for Mr. Wilson , 4 because Mr. Wilson was often late paying his rent. Ms. Brock testified that the total amount of s the rent collected each month was three thousand five hundred and fifty dollars ($3 ,550.00) and 6 that Mrs. Brock paid the utility bills. Mrs. Brock stated that the tenants in the garage and in the 7 hobby room were not paying any rent. 8 9 C. Respondent Working Dirt LLC's evidence regarding reduction in services and excess rent. 1 o Respondent submitted the following exhibits in opposition to Petitioners' rent reduction 11 request: 12 13 14 15 16 17 18 19 20 21 22 23 1. Exhibit B: Writ of Execution issued on March 21 , 2017 in San Mateo County Superior Court, case number 17-UDL-00238 (Working Dirt v. Brock). [This document is a duplicate of Petitioner's Exhibit 19]. 2. Exhibit C: Receipt for service of hallway and living room heater at property from M I C Heating and Cooling, Inc dated March 16 , 2017. 3. Exhibit D: Letter from ZFA Structural Engineers to Working Dirt dated March 22 , 2017. 4. 2017. 5. Exhibit E: Invoice issued to Working Dirt by Clark Pest Control dated March 3 , Exhibit F: Lease agreement and cover letter regarding property between Working Dirt LLC and Ms. Brock dated March 18 , 2013. 6. Exhibit G: Demolition Permit issued by the City to Working Dirt regarding 24 conve1ied garage and hobby room on subject property. 25 Working Dirt, through their representatives Ms. Gingher and Ms. Ballestrazze gave 26 testimony at the hearing. 27 Ms. Gingher testified that Working Dirt Management manages this property on behalf of 28 the owner and that Working Dirt rented the entire property to Ms. Brock so that she could Wilson v . Working Dirt LLC et al -Case# 20170005 , 20170006 & 20170007 Decision . -Page 15 operate a c lean and sober living hous e. According to Ms. Gingher, Ms. Brock rents three 2 separate properties within the City from Working Dirt and ran her clean and sober living 3 program in each. Ms. Gingher testified that in her opinion , Mrs. Brock runs them well and has 4 run these types of accommodations for years. Ms. Gingher also testified , however, that Working 5 Dirt is not involved in the running of Mrs. Brock 's housing services. Ms. Gingher testified that, 6 despite the Writ of Possession s ubmitted and marked as Respondent's Exhibit A , Ms. Brock's 7 actual posses s ion of the property had not yet been terminated by Working Dirt. 8 Ms. Gingher testified that Working Dirt Management never hears from Ms. Brock unless 9 there is a problem. According to Ms. Gingher, the first time Working Dirt learned of any issues 10 with the property was when they received a call from the City asking Working Dirt to meet at the 11 property on February 27, 2017. When Ms. Gingher arrived , she saw that the garage and the 12 hobby room were being used as rental units. Ms. Gingher testified that, at the time of the 13 inspection , Mrs. Brock informed her that there were six residents in the main house, but none in 14 either the converted garage or the hobby room. She was told that Ms. Gingher was free to I 5 change the locks on those structures. Ms. Gingher said that she had no idea, prior to this date , 16 that Mrs. Brock was using the additional structures as rental units because she had not visited the I 7 property personally for a number of yea rs. At that time Ms. Gingher was unaware of any history I 8 between Mr. Wi Ison and Mr. & Mrs. Brock. Ms . Gingher testified that she met Mr. Timoteo for 19 the first time during that visit and Mr. Timoteo went through all the code violations noted by his 20 office during that visit. Ms. Gingher testified that Working Dirt immediately began correcting 2 1 the code violations. 22 Ms. Gingher argued that a circuit drawing power for space heaters and computers might 23 trip the circuit even in a new office building and that this did not necessarily indicate any fault or 24 defect with the property. 25 Ms . Gingher testified that a three-day notice was issued to Mrs. Brock on March l , 2017 26 for failure to pay rent and that matter was resolved on or about March 2 1, 2017. 27 Ms. Ballestrazze testified on behalf of Working Dirt that when the he aters at the property 28 were inspected, one was in good working order but th e other one was broken and needed a Wilson v. Working Dirt LLC et al -Case# 20 170005 , 20 170006 & 20 17000 7 Decision. -Page 16 replacement gas valve. She described the heaters as "simple area heaters" that do not have 2 ductwork carrying heated air from where they are located to other parts of the house , such as Mr. 3 Wilson 's room upstairs. Ms. Ballestrazze testified , based upon pe rsonal knowled ge, that, 4 whenever PG&E inspects a gas heater, PG&E will tag it as unsafe immediately to avoid 5 dangerous conditions , so that, in her opinion , the malfunctioning heater is unlikel y to hav e been 6 unsafe. 7 Ms. Ballestrazze stated that Mrs. Brock contacted her office a couple of months before 8 the February 27 , 2017 call from the City, and informed her that the sewerage was backing up and 9 that there were plumbing issues with the property. Working Dirt called their plumber who went 10 out a few days later, but he was informed that Prestige Plumbing (another plumbing contractor) 11 had already been to the property and resolved the issue . 12 Ms. Ballestrazze testified that as soon as Working Dirt was made aware of the mouse 13 infestation they took immediate steps to treat the issue by calling Clark Pest Control. 14 Ms. Ballestrazze also that she was informed that the unit numbers on the doors in the 15 main house were only added by Mrs. Brock, at the advice of Mrs. Brock's counsel, in order to 16 make proper service of process of the unlawful detainer complaint upon Mr. Wilson possible. 17 18 19 V. DISCUSSION A. Registration of The Property 20 The Rent Stabilization and Just Cause for Eviction Ordinance of the City of East Palo Alto 21 (2010), (hereinafter "RSO ") specifically grants the authority for the Rent Stabilization Board to 22 require registration of all rental units within the City and to set appropriate fees for such 23 registration. RSO § 7(D)(2) codified as EPA Muni . Code§ 14.04.0 70(D)(2). Any property within 24 the city th at is not exempt is therefore required to register under the RSO. Regulations § 600(B). 25 Several exemptions exist for various types of properties. Single family residences , for example 26 are exempt from registration. RSO § 5(B)(l) codified as EPA Muni. Code§ 14.04.050(B)(l). 27 Propetiies with two or three dwellin g units where the landlord also resides are s imilarl y exempt 28 from the registration requirements. RSO § 5(A)(5) codified as EPA Muni. Code § 14. 04. 050(A)(5). Wilson v. Workin g Dirt LLC et al -Case# 2 0170005 , 20170006 & 20170007 Decision. -Page 17 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 24 25 26 Although City and County records indicate that only a single large single-family residence is supposed to exist at the property at issue in this petition , the evidence at the hearing showed that additional separate structures (the garage and the "hobby room") were on the property. The evidence at hearing was conclusive that the property was in fact being used as three separate dwelling units. Mr. Wilson , Mr. Ramirez and Mr. Timoteo were all convincingly unanimous in that the main house, the conve11ed garage and the· hobby room were all being used as dwelling units. Indeed , Mrs. Brock, in her own testimony admitted that people were residing in the conve11ed garage and the hobby room , although she denied that those persons were paying her rent to stay there. Accordingly, therefore , the property does not qualify as exempt under the RSO's single-family residence exemption 1°. Additionally, the owner-occupier exemption does not apply because the evidence presented is clear that neither any employee of Working Dirt LLC resided in the prope11y , neither did Mr. or Mrs. Brock. Testimony presented by Mrs. Brock at the hearing, which was corroborated by both Ms. Gingher and Ms. Ballestrazze, indicated that Working Dirt knew that Mrs. Brock wanted to use the property for a clean and sober living house when they agreed to rent it to her. Similarly, Mrs. Brock's testimony that the garage and the hobby room had been converted into dwelling units prior to the property being rented to Mrs. Brock, was not challenged, or disputed , by Ms. Gingher or Ms. Ballestrazze. It is clear therefore, that both respondents knew the configuration and the intended use of the prope11y as multiple rental units at the time that their initial lease agreement was executed. The burden of registration under the RSO therefore falls upon both the Brocks and Working Dirt, the respondents to this petition. Mr. Ramirez produced unrefuted ev idence that the property had never bee n registered with the RSP. No evidence of any attempt to register the prope11y was presented by either Working Dirt or the Brocks, either before or after, the hearing. As there was no evidence received at the 10 There was additional testimony provided by Mr. Wilson and Mrs. Brock that the individual 27 rooms within the main house were assigned their own "apa11ment numbers". Whether or not these individual rooms would constitute separate dwelling units under the RSO is unclear, but a 28 determination on this matter is not necessary to adjudicate this dispute , given the existence of the converted garage and the hobby room and the use of those separate structures as dwelling units. Wilson v. Working Dirt LLC et al -Case# 20 170005 , 20170006 & 20170007 Decision. -Page 18 hearing to indicate that the property qualifies for exemption to the registration requirements under 2 the RSO the property was required to have been registered with the RSP and the annual fees paid 3 accordingly. 4 5 B. Rent Demanded and Retained in Excess of Permissible Rent Ceiling 6 Having established that the property ought to have been registered under the RSO , the 7 matter now becomes whether there is any liability to Petitioner for that failure. 8 The RSO and the Regulations prohibit a landlord from demanding, accepting, receiving, 9 or retaining rent payments in excess of the Maximum Allowable Rent (hereinafter "MAR") 10 permitted by the RSO. RSO § 17 codified as EPA Muni . Code§ 14.04.180(8) see also 11 Regulations § 1500 (C)(l). 12 As the property has never been registered under the RSO there has never been an Initial I 3 Certificate of Maximum Allowable Rent (hereinafter "ICMAR") and therefore there had never 14 been any amount ofrent set as the Maximum Allowable Rent (hereinafter "MAR"). However, 15 the Ordinance is clear that when an ICMAR has not been issued because the prope1iy has not I 6 been registered with the RSP, the MAR for a rental unit is equal to the rent charged at the time 17 that the tenancy began. RSO § 4(J)(2) codified as EPA Muni. Code§ 14 .04.040(2). No rent 18 increases above that level are permitted under the RSO unless and until a dwelling unit is 19 properly registered. RSO § lO(H)(l) codified as EPA Muni Code§ 14.04.lOO(H)(l). 20 In this case the evidence is undisputed that the initial rent charged to Mr. Wilson upon his 21 commencement of his tenancy in the single , upstairs room was the sum of eight hundred 22 ($800.00) dollars per month , and that it increased by $165 .00 a month beginning August 1, 2015. 23 The patiies stipulated , prior to the hearing, that Mr. Wilson had not paid rent for seven (7) 24 months in the Stipulation and Order resolving the unlawful detainer complaint against Mr. 25 Wilson dated March 23 , 2017 which was entered in San Mateo County Case Number 17-UDL- 26 00079. The increased rent in excess of the MAR was therefore demanded , collected , and 27 retained by Mrs. Brock from August 1, 2015 through August 31 , 2016. 28 Wilson v. Working Dirt LLC et al -Case# 20170005 , 20170006 & 20170007 Decision. -Page 19 Petitioner, therefore , is entitled to a refund of the difference between the initial rent 2 charged ($800.00) per month , and the amount actuall y c harged and retained by Mrs. Brock 3 ($950.00) for each month since the unpermitted rent increase until the date on which the parties 4 stipulated Mr. Wilson had failed to pay rent. Petitioner is therefore entitled to a rent refund of 5 One Thousand Nine Hundred and Fifty Dollars ($1 ,950.00) for Respondent Brock 's retention of 6 rent in excess of the MAR. 7 8 C. Reduction of Housing Services, Maintenance Issues and Habitability Violations 9 In any petition for a rent rebate based on the reduction of housing serv ices, maintenance 10 issues or violations of the warranty of habitability w ithin the meaning of the RSO and the 11 Regulations, the burden of proof lies with the Petitioner to show, by the "preponderance of the 12 evidence", that grounds exist for a reduction of rent. Regulations§ 1500 (E)(2)(c).11 In this case, 13 therefore, Petitioner was required to s how that it is more likely than not that either Working Dirt, 14 the property owner, or Mrs . Brock, as a master tenant, provided him reduced housing services 15 such that, as a result of this reduction in services , Petitioner is entit led to a rent reduction. 16 The testimony presented by Mr. Wilson , Mr. Ramirez and Mr. Timoteo about conditions 17 at the property, including Mr. Wilson's rental unit, is c lear and uncontroverted by either Working 18 Di11 or Mrs. Brock. A number of habitability issues existed within the main house on the 19 prope11y during Mr. Wilson's tenancy. The evidence shows c learly that there was a rodent 20 infestation from October, 2014 until just after the treatment by C lark Pest Contro l during March , 2 1 2017 ; an ant infestation from October, 2014 to the date of the hearing on this petition; problems 22 with the electrical wiring in the main house from October, 2014 to the date of the hearing; and 2 3 problems with the heating in Mr. Wilson 's room from October, 2014 to the date of the hearing. 24 The parties do not dispute that there has been no reduction in rent to offset the reduction 25 in housing services and the habitability issues above. 26 27 11 While no firm definition for this standard exists, it is most often described as requiring that 28 the party who carries the burden of proof, in th is case the Petitioner, must show that something is more likely than not to be true. See California Civil Jury Instructions (CACI)# 200. Wilson v. Working Dirt LLC et al -Case# 20170005 , 20170006 & 20 170007 Decision. -Page 20 Pet iti o n er, t he refore, has carr ied hi s burden of proof for these spec ifi c a ll eged defects and 2 has sho wn that Respondent has reduced ho usin g serv ices and/or failed to maintain the property 3 so as to comp ly w ith the impli e d warranty of habitab ility. T here has been n o correspond in g 4 decrease in re nt. Respo nd ent has , therefore , v iol ated RSO § l 3(B). 5 The remaining question is , therefore , th e qu estio n of damages. Petitioner requested a 6 co mbin ed rent rebate of thi1ty-two percent (32%) for the above v io lations of the RSO a nd 7 warranty of hab ita bility. Given the serio us n ess of the v iol ation s of ha bitabi I it y , the iss uan ce of 8 "red tags " for the converted garage and the hobb y room and th e "orange ta g " iss u ed by the City 9 for the m ai n ho u se , the rebate so ug ht by Mr. Wilson is obj ect ive ly reasonable. 10 Both Working D irt and Mr. & Mrs. Brock h ad a duty to e ns ur e that the property was 11 maintained an d safe for h ab itat ion. Mr. & Mrs. Brock were respon s ible because t hey direct ly 12 rented the prope1ty to Mr. W il son . Working Dirt is eq ua ll y liabl e because they knew the 13 physical layo ut of th e pro petty (including the conversions to both the garage a nd the "h o bb y 14 room") a nd because they k new the purpose for w hi c h Mrs . Brock inte nd ed to use the propetty 15 w he n they leased the property to Mrs . Brock during 20 13 . 16 G iven th e MAR of $8 00 .00 pe r month , Petitioner is th e refore e ntitl ed to a re nt refund of 17 Two H undred and F ifty-Six Dollars ($256.00) per month from Octo be r 1, 20 14 t hrou g h A ug ust 18 3 1, 2 016 (the date on w hi c h M r. Brock and Mrs. Brock stipul ated that Mr. W il son ceased to pay 19 re nt). The total of thi s rent rebate is F iv e T housand E ig ht Hundred and Eighty-Eight Dollars 20 ($5 ,888.00), representing $256.00 per month for twenty-three months. 2 1 22 D. Other Claims 23 Pet iti o ner raises several oth er m atte rs in the documentation s upportin g his Petition . T hi s 24 hearing m akes no finding as to any overall li ab ility as between Petitio ner, e ith er Respond e nt 25 a nd /or a n y in vo lve d third parties b eyond the scope of the jurisdictio n of this heari ng . T hi s 26 hea rin g does not have juri sdiction to address , and does not attempt to ad dress , issues s uc h as , for 27 exampl e , lost wages. ft is possible that some or a ll of the parti es m ay have c la im s agai nst each 28 ot he r, o r agai nst other third parties. Wilson v . Working Dirt LLC et al-Case# 20 170005 , 20 170006 & 20 170007 Decision. -Page 2 1 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 2 1 22 23 24 25 26 27 28 VI. DECISION 1. 2. 3. 4. 5. At the time of the fi ling of this petition the property contained at least three separate dwe llin g units and should have been registered with the RSP. The property was not registered with the RSP according to the requirements of the RSO. The MAR was therefore the initial rent of Eight Hundred Dollars ($800 .00) per month. Respondents Mr. & Mrs. Brock must issue a rebate to Petitioner for the rent demanded and retained in excess of the MAR in the amount of One Thousand Nine H undred and Fifty Do ll ars ($1,950.00). Respondents Working Dirt and Mr. & Mrs. Brock are jointly li able for the rent rebate due for the conditions w ithin the prope11y during Petitioner's tenancy in the amoun t of Five Thousand Eight H undred and Eighty-E ight Do ll ars ($5,888.00). DA TED: June 15 , 2017 DEREK W. CHANTLER Hearing Examiner W il so n v. Working D irt LLC et al -Case# 20 170005, 20 170006 & 20 170007 Decis ion. -Page 22 Exhibit B Exhibit B CUPERTINO Date Submitted: City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Service Order Form Date Due: ( 408) 777-3308 Plamling (408) 777-3228 Building (408) 777-3228 Public Works --------------------- Applicant Name: -------------------------- Project Address/ APN: ------------------------ Project Description: Consultant's Scope of Work: ---------------------- Other: ------------------------------ Deposit Receipt #: ______ _ Amount: ---------- Transmitted by: --------------------------- Phone No. --------------- Exhibit C Exhibit C l(;J. Chantler Law Offices P.O . Box 50430 East Palo Ah o, CA 94303 C iry of C upertin o 10 300 To rr e Ave nu e Cupe rtin o, CA 950 14 City-2018-00018 Fake Matter for Billing Sample Purposes. Type Attorney Date Notes Serv ice D C 12/04/2018 Review documents submitted by rh e parti es in adva nce of hea rin g. Serv ice DC 12 /04/2 018 Leg al Researc h and Analys is: res earc h so mething criti cal in adva nce of hea rin g. Serv ice D C 12/04/201 8 Tr av el to C iry hal l and co ndu ct hearin g on the merits. Rece ive ev iden ce p res ented at hearin g. E xpense DC 12/04/2018 Reimbursa bl e expe ns : Parkin g at C ity Hall fo r H ea ring Se rvice D C 12/04/2018 Revie w an d Fin alize decis io n o n th e merit s. Send to C ity and to parti es. Detailed Statement of Account Current Invoice Quantity 0.50 0 .7 5 2.00 1.00 1.00 Invoice Number Due On Amount Due Payments Received 153 01/03/2019 $1,072.5 0 INVOICE In voice# 153 Dare: 12/04/20 18 Due On : 01/03/2019 Rate Total $25 0 .00 $125 .00 $25 0 .00 $187 .50 $25 0.00 $5 00.00 $10 .00 $1 0 .00 $25 0.00 $25 0.00 Total $1,072.50 Balance Due $0.00 Outstanding Balance Total Amount Outstanding $1,072.5 0 $1,072.50 $1,072.50 Page l of2 P lease mak e all amounts payab le to: C h a ntl e r Law Offices Pl ease pay w ithin 3 0 d ays . Page 2 of 2 In vo ice # 153 -12/04/201 8 Exhibit D Exhibit D LAWYERS' MUTUAL INSURANCE COMPANY PROFESSIONAL LIABILITY POLICY THE DECLARATIONS POLICY NUMBER LPLC14613 RNL. OF POL. NO.: LPLB14613 1. NAMED INSURED AND ADDRESS: CHANTLER LAW OFFICES PARTNERSHIP P.O. BOX 50430 PALO ALTO, CA 94303 2. LAWYERS WHO ARE PARTNERS OF, STOCKHOLDERS IN, OR EMPLOYEES OF THE NAMED INSURED: SEE PRIOR ACTS INCLUSION ENDORSEMENT ATTACHED 3. PREDECESSOR FIRM: NONE 4. EFFECTIVE DATE OF THIS POLICY: 12:01 A.M. PACIFIC STANDARD TIME 5. EXPIRATION DATE OF THIS POLICY: 12:01 A.M. PACIFIC STANDARD TIME 6. POLICY PREMIUM: 7. LIMITS OF LIABILITY: LIMIT OF LIABILITY EACH CLAIM LIMIT OF LIABILITY POLICY AGGREGATE DEDUCTIBLE (CLAIMS EXPENSES & DAMAGES): 08-16-2018 08-16-2019 1,000,000 3,000,000 5,000 -SEE POLICY PROVISIONS FOR FULL DESCRIPTION - 8. FORMS AND ENDORSEMENTS FORMING A PART OF THIS POLICY: FORM 1 REVISED 6/87 PAIE CYBER TRIA -2002 $11,564 THESE DECLARATIONS, FORM 1 REVISED 6/87 AND ENDORSEMENTS AS LISTED IN ITEM 8 ABOVE, CONSTITUTE THIS POLICY, NUMBERED ABOVE. LAWYERS' DATE OF TRANSACTION: 08-24-2018 LPL-R Re v. 8/1997 ' ACORD® I CERTIFICATE OF LIABILITY INSURANCE DATE {MMIDD/YYYY) ~ 12/10/2018 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on th is certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PROD UCER CONTACT NAME: Hiscox Inc. d /b/a/ Hiscox Insurance Agency in CA PHONE (888) 202-3007 I FAX IA/C No Ext\· IA/C Nol : 520 Madison Avenue E-MA IL contact@hiscox.com 32nd F loor ADDRESS : New York , NY 10022 INS URER{S) AFFORDING COVERAGE NA IC# INS URER A: H iscox Insurance Company Inc 10200 INSURED INS URER B: D E REK CHANTLER DBA: C HANTLER L AW OFF ICE INS URER C : 444 BE L L ST PALO ALTO , CA 94303 INSURER D : INS URER E : INS URER F: COVERAGES CERTIF ICATE NUMBER: REVISION NUMBER: T HI S IS TO CERTIFY THAT THE POLIC IES OF INSURANCE LI ST ED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED . NOTWITHSTANDING ANY REQU IREMENT, TERM OR COND ITI ON OF AN Y CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH T HIS CERTIF ICAT E MAY BE ISSUED OR MAY PE RTAIN , T HE INS U RANCE AFFORDE D BY THE PO LI C IES DESCR IBED HEREIN IS SUBJECT TO ALL THE TERMS , EX CLUS IONS AND CONDITIONS OF SUCH POLIC IES . LIM ITS SHOWN MAY HAVE BE E N REDUCED BY PAID CLAIMS. INSR ADDL SUBR POLI CY EFF POLI CY EXP LTR TYPE OF INS URANCE 1.i~n WVD POLI CY NUMBER I MM/DD/YYYY \ I MMIDD/YYYY \ LI MITS X COMMERCIAL GENERAL LIABILITY EACH OCC URREN CE $ 2 ,000 ,000 -=:J CLA IMS-MADE [8J OCCUR DAMAGE TO RENTED PR EMI SES /Ea occurrence\ $ 100,000 -MED EXP {A ny one person) s 5 ,000 A -y UDC-2185333-CG L-18 02/26/2 018 02/26/2019 PER SONA L & ADV IN JU RY $ 0 GEN'L AGGREGATE LI MIT APP LI ES PER: GENER AL AGGR EGA TE $ 4 ,000,000 ~ DPRO-O we PRODUCTS -COMP/OP AGG s SIT Gen. Agg POLI CY JECT OT HER : · s AUTOMOB ILE LIAB ILITY COMBI NED SING LE LIMIT s fEa accident\ - ANY AU TO BODILY INJUR Y (Per person ) $ --ALL OWNED SCHEDULED AUTOS AUTOS BODILY INJU RY (Per accident) $ --NON-OWNED PROPERTY DAMAGE HIRED AUT OS AUTO S f Per accident\ $ -- $ UMBRELLA LI AB H OCCUR EAC H OCCURRENCE $ - EXCESS LI AB CLAIMS -MADE AGGREGATE $ OED I I RE TE NTI ON$ $ WORKERS COMPENSATION I PER I I OTH- AND EMPL OYERS' LI AB ILI TY STATU TE ER Y/N ANYPRO PRIETOR/PAR TNER /EXECUTIVE D N/A EL EACH ACC IDENT $ OFF ICER /MEMBER EXC LUD ED ? (Mandatory In NH) EL DISE ASE -EA EMPLOYEE $ If yes , describe under DESCRIPTION OF OPERAT IONS below EL DI SEASE -POLICY LIMIT $ DESCRIPTION OF OPERATIONS/ LOCATIONS/ VEH ICLES (ACORD 101, Additiona l Remarks Schedu le, may be attached if more space is required) The City of Cupertino , it subsidiary agencies , directors, officers , e mp loyees , agents , independent co ntra ctors and volunteers sha ll be named as additiona l insured on the Hiscox ge neral liability po licy subject to the policy terms and conditions. CERTIFICATE HOLDER CANCELLATION The City of Cupertino SHOULD ANY OF THE ABOVE DESCR IBED POLIC IES BE CANCELLED BEFORE 10300 Torre Ave Cuperti no , CA 95014 THE EXP IRATION DATE THEREOF, NOTICE W ILL BE DELIVERED IN ACCORDANCE W ITH THE POLICY PROVIS IONS. AUTHOR IZED REPRESENTATIVE ~J. (l. 1.J/1-· I © 1988-2014 ACORD CORPORATION. All rights reserved. ACORD 25 (2014/01) The ACORD name and logo are registered marks of ACORD I ' GEICO Washington DC MAILING ADDRESS DEREK W CHANTLER AND RUTH IE R CHANTLER 444 BELL ST E PALO AL TO CA 94303-1509 To whom it may concern : GEICO INDEMNITY COMPANY VERIF ICATION OF COVERAGE (SEE BELOW UNDER CAUTIONARY NOTE) Policy Number: 4134067372 Effective Date: 08-12-18 Expiration Date: 02-12-19 Registered State: CALIFORNIA This letter is to verify that we have issued coverage under the above policy number for the dates indicated in the effective and expiration date fields for the vehicle listed. This should serve as proof that the below mentioned veh icl e meets or exceeds the financial responsibility requirement for your state. This verification of coverage does not amend, extend or alter the coverage afforded by this policy. Vehicle Year: 2017 Make: TOY OT A Model: RAV4 VIN: JTMDJR EV8HD120902 COVERAGES Bodily Injury Liability Each Person/Each Occurrence State Minimum $15 ,000/$30 ,0000 Property Damage Liability State Minimum $5,000 Uninsured & Underinsured Motorists Each Person/Each Occurrence Comprehensive Collis ion Rental Reimbursement Lien holder CITY OF CUPERTINO 10300 TORRE AVE CUPERTIN O , CA 95014-0000 Additional Information: Issued 12/4/2018 Additional Insured LIMITS $500 ,000/$1 MIL $100,000 $30,000/$60,000 $50 Per Day / $1,500 Max ~ Interested Party If you have any additional quest ion s, please call 1-800-841-3000. DEDUCTIBLES $1,000 Ded $1,000 Ded CAUTIONARY NOTE : THE CURRENT COVERAGES, LIMITS , AND DEDUCTIBLES MAY DIFFER FROM THE COVERAGES, LIMITS AND DEDUCTIBLES IN EFFECT AT OTHER TIMES DURING THE POLICY PER IOD . THIS VERIFICATION OF COVERAGE REFLECTS THE COVERAGES, LIMITS, AND DEDUCTIBLES AS OF THE ISSUED DATE OF THIS DOCUMENT WHICH IS SHOWN UNDER "ADDITIONAL INFORMATION" OR IF AN ISS UED DATE IS NOT SHOWN, THE DATE OF THIS FACSIM ILE . U-33 10-07 ~'~ HISCOX Hiscox Insurance Company Inc. Policy Number: UDC-2185333-CGL-18 Named Insured: DEREK CHANTLER OBA: CHANTLER LAW OFFICE Endorsement Number: 19 Endorsement Effective: December 28, 2018 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED -DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following : COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Organization(s) The City of Cupertino 10300 Torre Ave Cupertino.CA 95014 Information required to complete this Schedule, if not shown above, will be shown in the Declarations . Section II -Who Is An Insured is amended to in- clude as an additional insured the person(s) or organi- zation(s) shown in the Schedule, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omis- sions of those acting on your behalf: A. In the performance of your ongoing operations; or B. In connection with your premises owned by or rented to you . CG 20 26 07 04 © ISO Properties, Inc ., 2004 Page 1 of 1 State of California County of Santa Clara City of Cupertino Contractor/Consultant Affidavit of No Employees I, the undersigned, declare as follows: I am an independent contractor and the owner of Chantler Law Offices I wish to enter into a services contract with the City of Cupertino. I am fully aware of the provisions of section 3700 of the California Labor Code, which requires every employer to provide Workers' Compensation coverage for employees in accordance with the provisions of that Code. I am also aware that I must provide proof of workers' compensation insurance to the City of Cupertino for any and all employees I may have, pursuant to Section 12 of the City of Cupertino's contract. I hereby certify that I do not have any employees nor will I have any employees working for me or my business during the term of any service contract with the City of Cupertino. I am not required to have Workers' Compensation insurance. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on this 28thday of December 2018, at East Palo Alto California. Derek W. Chantler -Partner SIGNATURE Revised 1.05 .18