S.F. Prop. M rent reduction provision struck down

Bob Egelko, Chronicle Staff Writer

Friday, February 25, 2011

(02-24) 17:16 PST SAN FRANCISCO -- A state appeals court has struck down provisions of a voter-approved San Francisco law that allowed the city's rent board to reduce payments from tenants whose landlords harassed them.

The First District Court of Appeal in San Francisco left intact other parts of Proposition M, a November 2008 measure, but ruled that the city board has no constitutional authority to impose lower rents on landlords who mistreat their tenants or try to coerce them into leaving.

Prop. M, put on the ballot by city supervisors, was the latest of several measures seeking to strengthen San Francisco's rent control ordinance in the wake of a 1995 state law that allowed landlords to increase rents to market rates after a tenant moved out.

The measure defined a variety of landlord conduct as harassment that lowered the value of housing and entitled tenants to lower rents. Included were invading tenants' privacy, violating anti-discrimination laws, holding on to rent checks for more than 30 days, and using threats, fraud or coercion to get a tenant out of a rent-controlled apartment.

Prop. M allowed renters to seek reductions from the rent board or sue in court.

In Wednesday's ruling, the court said tenants subjected to such conduct suffer harm to their "emotional peace and psychic well-being," but not their pocketbooks.

An administrative agency such as the rent board can roll back excessive rents, the court said, but Prop. M was an attempt to "impermissibly endow the board with judicial power" to award damages for non-monetary losses.

Renters seeking such damages must sue their landlords, Justice Kathleen Banke said in the 3-0 ruling.

She said the board could reduce rents for landlord misconduct that caused financial harm, such as failing to perform repairs or maintenance required by law or by a rental contract.

The court upheld sections of Prop. M that prohibit landlords from using fraud or coercion to get tenants to leave. But a provision that forbids landlords from making repeat offers of money to induce departure violates the property owner's freedom of speech, the court said.

James Parrinello, a lawyer for apartment owners who challenged Prop. M, said the ruling removed the measure's most objectionable provisions by steering disputes into civil court, where proceedings are "more even-handed" than hearings before the city board.

But Deputy City Attorney Tara Steeley said the court had upheld "the vast majority of Proposition M, which will be able to provide powerful relief for tenants who face harassment."

The ruling can be read at links.sfgate.com/ZKWQ.

E-mail Bob Egelko at begelko@sfchronicle.com.

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/02/25/BAQV1HU6VQ.DTL

This article appeared on page C - 4 of the San Francisco Chronicle

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