Withdrawing Tenant Services

I am a property manager in a large apartment building that is currently undergoing construction on a remodeled lobby and fitness room. A number of tenants have complained about the noises from the construction, while others are complaining that the work is taking too long to be completed. But the work is taking a long time precisely because we are trying not to affect the tenants when most of them are at home. Both sides are threatening to ask the Rent Board for a rent reduction. Do either or both of them have a case?

The answer is “yes” and “yes.” Under local law, a tenant may file a petition for a reduction of base rent where a landlord, without a corresponding reduction in rent, has substantially decreased housing services, or failed to provide housing services reasonably expected under the circumstances. These petitions often arise where the landlord has taken away parking privileges or storage spaces without reducing the rent.

Yet tenants regularly file these decrease in services petitions when the building is undergoing rehabilitation work. Some file for the annoyance created by the work, and others seek relief for the deprivation of services caused by the rehabilitation. Until recently, the Rent Board was at liberty to grant reductions even when the project was commenced to effectuate repairs and capital improvements. In 1999, the California Court of Appeal, in a case entitled Golden Gateway Center v. San Francisco Rent Board, held that a landlord who performs reasonably and necessary repair and maintenance work on rental property, which has the effect of temporarily interfering with or preventing the tenant’s full use of housing services, but does not substantially interfere with the right to occupy the unit, will not give rise to a rent decrease. In Golden Gateway, tenants were precluded from using their decks during an exterior deck painting and restoration project at the Golden Gateway Center apartment complex. The Court of Appeal rejected the Rent Board’s contention that a decrease in rent was warranted in this situation.

However, tenants will still receive a temporary rent decrease if they show that the work either substantially interferes with their use and enjoyment of the unit, and/or the work is not reasonable and necessary but rather cosmetic and elective. Tenants have also successfully received rent decreases when they have shown that the projects were overly lengthy or unjustifiably burdensome on the residents. To complicate matters further, there is legislation pending before the Board of Supervisors that will, if passed, seriously impede a landlord’s right to withdraw services, even for a temporary period of time, without the tenant’s consent.

To prevent a petition from being filed, keep your residents informed from the onset about the work you are doing. Give them disclosure and opportunity for comment before the hammering begins. Oftentimes, tenants file these petitions because they feel ignored and left out of the loop. Thus, a good public relations campaign can, in many instances, diffuse the possibility of litigating at the Rent Board.

David Wasserman