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Mosser Companies v. San Francisco Rent Stabilization & Arbitration Board

California Court of Appeals, First District, Third Division

January 21, 2015

MOSSER COMPANIES, Plaintiff and Appellant,
v.
SAN FRANCISCO RENT STABILIZATION AND ARBITRATION BOARD, Defendant and Respondent.

Superior Court of the City and County of San Francisco, No. CPF-12-512697 Ronald E. Quidachay, Judge.

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COUNSEL

Fried & Williams and Clifford E. Fried, for Plaintiff and Appellant.

Dennis J. Herrera, City Attorney, and Wayne K. Snodgrass, Deputy City Attorney, for Defendant and Respondent.

OPINION

Pollak, J.

Mosser Companies (landlord) owns a nine-unit residential apartment building on Fell Street in San Francisco. The apartment is subject to rent control under San Francisco's Residential Rent Stabilization and Arbitration Ordinance (S.F. Admin. Code, § 37.1 et seq.; ordinance), which limits rent increases to tenants in occupancy (id., § 37.3, subd. (a)). Under Civil Code section 1954.53, which provides that “an owner of residential real property may establish the initial rental rate for a dwelling or unit” (id., subd. (a)), local jurisdictions are authorized to impose rent control limiting rate increases until “the original occupant or occupants who took possession of the dwelling or unit pursuant to the rental agreement with the owner no longer permanently reside there” (id., subd. (d)(2)). The question before us is whether the son of parents who years before rented a unit in landlord’s building, and who with landlord’s consent resided with his parents when the rental agreement was entered, is an “original occupant” within the meaning of the statute, precluding the landlord from establishing a new unrestricted rental rate for the apartment when the son remains in the apartment after the parents have departed. The San Francisco Rent Stabilization and Arbitration Board (rent board) and the trial court concluded that the son, although a minor when the rental agreement was entered and not a signatory to the rental agreement, is nonetheless an “original occupant” entitled to the continued protection of the rent control provision. Although a compelling policy argument can be made for qualifying rent control restrictions when a tenancy passes from one generation to the next, the current statute incorporates no such qualification. We therefore conclude that the rent board correctly prohibited landlord from increasing the rent to the son above the rent control limit when his parents vacated the apartment, and the trial court correctly denied landlord’s petition for a writ of mandate challenging the rent board’s action.

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I. Facts and Procedural History

In November 2003, Parmanathan and Marilyn Govender moved into a Fell Street apartment in San Francisco with their three children, Brian, Glendon and Michelle.[1] Brian was then 13 years old. A written lease, signed by Parmanathan and Marilyn, provided a term of 12 months to continue thereafter on a month-to-month basis until terminated by written notice. Parmanathan and Marilyn are the only tenants named in the lease. The lease provides “that the Premises is to be used exclusively as the primary and principal residence of the named Tenant(s) who are the only ‘Original’ Tenants of the Premises.” The children are not mentioned in the lease, but it is undisputed that the landlord approved their occupancy. The initial monthly rent was $1, 495.

The Govender family lived in the apartment for almost nine years. In August 2012, after two of their three children had left home, Parmanathan and Marilyn moved out of the apartment. Brian, then aged 23, did not move with his parents but continued to live in the apartment. A few days after Parmanathan and Marilyn moved out, the landlord served notice that it was raising the monthly rent from $1, 681.75 to $3, 295. This amount substantially exceeds the rental rate permitted by the ordinance so long as the original occupants reside in the premises.

A local rent control ordinance, such as the one in San Francisco, may not limit the amount of rent charged when “the original occupant or occupants who took possession of the dwelling or unit pursuant to the rental agreement with the owner no longer permanently reside there.” (Civ. Code, § 1954.53, subd. (d)(2).) The landlord asserted that he was permitted to raise the rent beyond local rent control limits because Parmanathan and Marilyn were the only original occupants under the lease and they no longer lived in the apartment.

In September 2012, Parmanathan, Marilyn and Brian filed a tenant petition with the rent board alleging that the proposed rent constituted an unlawful rent increase. The Govenders acknowledged that Parmanathan and Marilyn were no longer living in the apartment but asserted that Brian was an original occupant entitled to continued rent control.

An evidentiary hearing was conducted before a rent board administrative law judge in October 2012. The parties stipulated that Brian, then aged 13, moved into the apartment with his parents with the approval of the landlord when ...


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