T & A DROLAPAS & SONS, LP, Plаintiff and Appellant, v. SAN FRANCISCO RESIDENTIAL RENT STABILIZATION AND ARBITRATION BOARD et al., Defendants and Respondents; GERALD BORJAS, Real Party in Interest and Respondent.
No. A139432
First Dist., Div. Four.
June 16, 2015
238 Cal.App.4th 646
Fried & Williams and Clifford E. Fried for Plaintiff and Appellant.
Dennis J. Herrera, City Attorney, and Wayne K. Snodgrass, Deputy City Attorney, for Defendants and Respondents.
Opinion
STREETER, J.—In this case we must decide whether
STATEMENT OF THE FACTS
On September 3, 1995, Javier and Barbara Lara began renting the apartment at 3380 21st Street, unit 4, of a nine-unit building in San Francisco. The Laras took occupancy of the unit pursuant to a written rental agreement with the building‘s then owner, but no copy of that agreement now exists. Gerald Borjas (Borjas), the real party in interest and eldest of three Lara children, was six years old at the time he and his family moved into the apartment. There is no evidence that the occupancy by the entire family was in any manner inconsistent with the rental agreement or was without the landlord‘s permission. The initial rent on the apartment was $775.
Appellant, T & A Drolapas & Sons, LP (Drоlapas), purchased the building containing the unit rented to the Laras in approximately April 2000. During escrow the Laras signed and provided to Drolapas an “Estoppel Certificate: Landlord Questionnaire” in which they stated that Javier and Barbara Lara were the “tenants” but that the unit was “occupied” by two adults and four children, and this was the “number of allowable tenants.” Drolapas points out that the Estoppel Certificate was not signed by Borjas as the tenant, naturally enough, as he was approximately 11 years old at the time.
Javier and Barbara Lara bought a home in Daly City in December 2010 and began using that рroperty as their principal residence. Borjas did not move with his parents to Daly City and has continuously lived in the unit on 21st Street in San Francisco. Because Borjas‘s income is sometimes unstable, Javier and Barbara Lara have continued to pay rent for the apartment on 21st Street. Borjas pays thеm rent for the apartment when he is able to do so.
On May 10, 2011, Drolapas served Javier and Barbara Lara with a 60-day notice of a rent increase from $1,171.32 to $2,000 per month, effective July 15, 2011. The notice stated that the unit did not fall within the jurisdiction of the San Francisco Residential Rent Stabilization and Arbitration Ordinance because Javier and Barbara Lara no longer occupied it.
PROCEDURAL BACKGROUND
Drolapas filed a landlord‘s petition with the Rent Board on May 10, 2011, seeking a determination that the unit was not subject to rent control pursuant to Rent Board rules and regulations and the Costa-Hawkins Rental Housing Act (the Costa-Hawkins Act or the Aсt) (
Disputing that Borjas was an “original occupant,” Drolapas claimed it was allowed to raise the rent on the unit by any amount it desired under
A Rent Board administrative law judge (ALJ) heard the matter on September 15, 2011, and issued a decision on December 14, 2011. The ALJ agreed with Borjas, ruling that he “was an original occupant who took possession of the unit pursuant to the rental agreement in 1995, and that he continues to permanently reside in the unit.” The ALJ also concluded that “even assuming Mr. Borjas was not an original occupant, the undisputed evidence showed that he was a subtenant who resided in the unit prior to January 1, 1996. Thus, whether Mr. Borjas is an original occupant or a subtenant who resided in the unit prior to January 1, 1996,
On February 15, 2012, Drolapas filed in superior court a petition for writ of administrative mandamus and complaint for declaratory relief, under Code of Civil Procedure sections 1085 and 1094.5. The petition sought a writ compelling the Rent Board to set aside its decision and further sought a trial de novo in superior court, or in the alternative an order compelling the Rent Board to сonduct a new hearing with a declaration from the court that Borjas was not an original occupant or a subtenant who resided in the unit prior to January 1, 1996.
The matter was heard by Judge Ronald E. Quidachay on December 3, 2012, who denied the petition and the claim for declaratory relief in a written statemеnt of decision filed April 15, 2013, and reduced to judgment June 4,
DISCUSSION
On appeal, Drolapas contends Borjas did not qualify as an “original occupant” and, as a child, he did not “take possession” of the unit “pursuant to the rental agreement” in 1995. It further contends Borjas was not a “subtеnant who resided in the unit prior to January 1, 1996.”
Ordinarily we review the decision whether to grant a writ of administrative mandamus to determine whether there was “a prejudicial abuse of discretion in the administrative agency‘s decision.” (Cobb v. San Francisco Residential Rent Stabilization & Arbitration Bd. (2002) 98 Cal.App.4th 345, 350 [119 Cal.Rptr.2d 741]; see Code Civ. Proc., § 1094.5, subd. (b).) The arguments raised by appellant, however, present issues of statutory interpretation, pure questions of law on essentially undisputed facts, which are subject to de novo review. (Cassidy v. California Bd. of Accountancy (2013) 220 Cal.App.4th 620, 627 [163 Cal.Rptr.3d 346]; Danekas v. San Francisco Residential Rent Stabilization & Arbitration Bd. (2001) 95 Cal.App.4th 638, 643 [115 Cal.Rptr.2d 694].)
The Costa-Hawkins Act was enacted in 1995 to ameliorate the impact of local rent control efforts, and specifically vacancy control, through which rent controls in a few locales remained in place even when an apartment was voluntarily vacated and a new tenancy began. The legislation was billed by proponents as a “moderate approach to overturn extreme vacancy control ordinances which unduly and unfairly interfere into the frеe market.” (Assem. Conc. Sen. Amends. to Assem. Bill No. 1164 (1995-1996 Reg. Sess.) as amended July 20, 1995, p. 6 <http://www.leginfo.ca.gov/pub/95-96/bill/asm/ab_1151-1200/ab_1164_cfa_950724_180346_asm_floor.html> [as of June 16, 2015].) The Act preempts local rent control ordinances in some circumstances. “Its overall effect is to preempt local rent control ordinances in twо respects. First it permits owners of certain types of property to adjust the rent on such property at will, ‘[n]otwithstanding any other provision of law.’ (
Mosser Companies, supra, 233 Cal.App.4th 505, dealt with a similar set of facts and the identical statute. In Mosser Companies, Brian, the current occupant of a rent-controlled apartment on Fell Street in San Francisco, had moved into the apartment when his рarents took possession of it when he was 13 years old. (Mosser Companies, supra, at p. 509.) Nine years later, after two of their three children left home, Brian‘s parents moved to a different location, but Brian, who was then 23 years old, stayed on in the Fell Street apartment. (Ibid.) The landlord then announced it was raising the rent from $1,681.75 to $3,295 on the theory that the “original occupants“—Brian‘s parents—no longer lived in the apartment. (Ibid.) On the question of whether Borjas was an “original occupant,” we find Mosser Companies to be materially indistinguishable from the case before us.
Drolapas argues an “original occupant” must be a “tenant that is a party to the rental agreement.” Mosser Companies rejected that interpretation and decidеd that “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.” (Mosser Companies, supra, 233 Cal.App.4th at p. 508.) Mosser Companies 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 rеnt control provision.” (Ibid.)
That settles the first of the issues raised by Drolapas. “An ‘occupant’ is commonly defined as ‘one who occupies a particular place; esp[ecially]: RESIDENT.’ (Merriam-Webster‘s Collegiate Dict. (11th ed. 2007) p. 858, col. 1.) The plain meaning of an ‘original occupant . . . who took рossession of
Whether Borjas “took possession” of the unit “pursuant to the rental agreement,” (
Finally, we address a portion of the statutory language not at issue in Mosser Companies, namely the provision relating to subtenants who inhаbited the rent-controlled unit prior to the effective date of the Act. First, we find nothing inconsistent in the Rent Board‘s or trial court‘s ruling that Borjas was both an “original occupant” and a “subtenant.” Drolapas‘s argument to the contrary is based on the notion that an “original occupant” must be one who took рossession as a “tenant that is a party to the rental agreement.” Having rejected that premise, we also reject the notion that a single individual cannot be both an “original occupant” and a “subtenant.”
As we read the statute, when the original occupants have vacated a rent-cоntrolled unit,
Drolapas argues Borjas did not become a subtenant until 2011 because his parents continued as the tenants under the lease and continued paying the
Certain countervailing policy arguments might well counsel against allowing a rent-controlled apartment to be passed on “from friend to friend or generation to generation.” But it seems to us the risk of that happening can be overstated easily. “[T]he protection afforded here is limited in scope to lawful and original occupants. A rent-controlled apartment cannot, as landlord fears, be passed on freely ‘from friend to friend or generation to generation.’ Only those occupants who reside in the apartment at the start of the tenancy and do so with the landlord‘s express or implicit consent are protected from unregulated rent increases.” (Mosser Companies, supra, 233 Cal.App.4th at p. 516.)
In any event, as Mosser Companies pointed out: “Although a compelling policy argument can be made for qualifying rent сontrol 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 pаrents vacated the apartment, and the trial court correctly denied landlord‘s petition for a writ of mandate challenging the rent board‘s action.” (Mosser Companies, supra, 233 Cal.App.4th at p. 508.)
We too conclude: “Whether the application of rent control protection to occupants who begin their residency as minors is wisе economic policy is a question for legislative, not judicial, determination. Local and state legislators are free to make these public policy determinations provided the rent regulation does not deprive property owners of a fair return on their investment. (Galland v. City of Clovis (2001) 24 Cal.4th 1003, 1021 [103 Cal.Rptr.2d 711, 16 P.3d 130].) No clаim of a confiscatory taking is raised in this case. We must therefore apply the law as written, and the current law does not permit vacancy decontrol until all lawful occupants residing in a dwelling at the start of the tenancy vacate the premises. (
DISPOSITION
The judgment is affirmed.
Ruvolo, P. J., and Reardon, J., concurred.
Appellant‘s petition for review by the Supreme Court was denied September 16, 2015, S228088.