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September 10, 2015

Casa Luna SF LLC

816 Everett Avenue

Oakland, CA 94602

DEPARTMENT

NOTICE OF DECISION

SF Administrative Code Chapter 41A Short Term Residential Rental

Site Address: 406017th Street

Assessor's Block/Lot: 2623/015

Zoning District: RH-3 (Residential- House; Three Family) Zoning District

Complaint Number: 2015-007583ENF

Hearing Officer: Adrian C. Putra, (415) 575-9079 or adrian.~utra@sfgov.or~

DECISION

1650 Mission St.Suite 400San Francisco,CA 94103-2479

Reception:415.558.6378

Fax:415.558.6409

PlanningInformation:415.558.6377

The Director's appointed hearing officer, Adrian C. Putra, has determined that Casa Luna SF LLC, the

owners of 4060 17~ Street have violated Administrative Code Chapter 41A for illegally offering four

dwelling units for rent as a Tourist or Transient use (a.k.a. short-term rental). The details of the violation

and decision are discussed below.

This decision is based on the entirety of the record before the hearing officer, including but not limited to

testimony of witnesses and the responsible party and information submitted by Planning Department

staff, the responsible party/ies, and other witnesses. The record may be found at 1650 Mission Street,

Suite 400, San Francisco. Although factual information from the record is summarized below, this

decision is based on the record as a whole.

DESCRIPTION OF VIOLATION

The subject property contains four dwelling units (main building containing three legal units plus a

carriage unit at the rear of the property). The Planning Department received a complaint on June 24,

2015, alleging that the property was being used for short term rentals and doing business as "Casa Luna: '

UNLAWFUL CONVERSION

Chapter 41A of the San Francisco Administrative Code prohibits the offering of residential units for

Tourist or Transient use (which is a rental for less than 30 days), unless the units are registered on the

www.sfpianning.org

406017t" Street

Complaint No. 2015-007583ENF

Chapter 41A Notice of Decision

September 10, 2015

Short-term Residential Rental Registry. Under Administrative Code Section 41A.6, if the Hearing Officer

determines that a violation has occurred, an administrative penalty shall be assessed as follows:

1. For the initial violation, not more than four times the standard hourly administrative rate of

$121.00 for each unlawfully converted unit, or for each identified failure of a Hosting Platform to

comply with the requirements of subsection (g)(4), per day from the notice of Complaint until

such time as the unlawful activity terminates;

2. For the second violation by the same Owner(s), Business Entity, or Hosting Platform, not more

than eight times the standard hourly administrative rate of $121.00 for each unlawfully converted

unit, or for each identified failure of a Hosting Platform to comply with the requirements of

subsection (g)(4), per day from the day the unlawful activity commenced until such time as the

unlawful activity terminates; and

3. For the third and any subsequent violation by the same Owner(s), Business Entity,. or Hosting

Platform, not more than twelve times the standard hourly administrative rate of $121.00 for each

unlawfully converted unit or for each identified failure of a Hosting Platform to comply with therequirements of subsection (g)(4) per day from the day the unlawful activity commenced until

such time as the unlawful activity terminates.

COMPLAINT AND SUPPORTING DOCUMENTS

On June 24, 2015, Planning Department staff received a complaint that the subject property was operating

as an unauthorized short-term residential rental. Staff located listings on the websites VRBO(www.vrbo.com), Agoda (www.agoda.com), Trip Advisor (www.tripadvisor.com), and

www.casalunasf.com, which offered the dwellings units at the property as short term rentals.

NOTICE OF COMPLAINT AND APPARENT VIOLATION

On June 30, 2015, staff issued a Notice of Complaint to the property owner by certified and non-certified

mail.

On July 1, 2015, staff posted a notice at the subject property notifying the property owner of the hearing.

While posting on site, staff observed people .exiting the property. Upon questioning from staff, these

people confirmed to staff that they were visiting and staying at the site. Staff also witnessed pin padlocks on the property.

ADMINISTRATIVE HEARING

On August 12, 2015, the hearing officer convened the administrative hearing. All testifying witnesses

were sworn in and the hearing was audio recorded. The hearing was attended by the following people:

• Mr. Adrian Putra, hearing officer

• Ms. Laura Lynch, staff planner

• Mr. Christopher DeWys, attorney representing the owners

• Mr. Robert Pyburn, member of the public

• Ms. Sue Hector, member of the public

• Mr. Gregory Reynold, member of the public

SAN FRANCISCO ~ 2PLANNING DEPARTMENT

406017th Street Chapter 41A Notice of Decision

Complaint No. 2015-007583ENF September 10, 2015

Ms. Lynch, staff planner gave the following testimony:

• On June 24, 2015, staff located the listing on both VRBO and www.casalunasf.com advertising

short term rentals at the property for all four units.

• On July 3, 2015, staff found that the listing on VRBO was removed, and the listings on

www.casalunasf.com were altered to only accept 30 day minimum rentals.

• On July 14, 2015, the listing on VRBO resumed with the title of the listing stating a 30 day

minimum booking; however, in the description of the listings there was a monthly and daily rate

available and the statement "3-day minimum." Staff also found guest reviews on the property

dated as recently as July 2015.

• On August 10, 2015, staff discovered that as of July 14, 2015, the listings on VRBO resumed with

the listing's title stating a 30 day minimum booking; however, in the description of the listing

there was a monthly and daily rate available and the statement "3-day minimum:' On the same

day, staff contacted Danfoura Law Offices to inform them that the listing on VRBO are still has

language advertising stays of less than 30 days.

• On August 11, 2015, staff found that the property's listing on VRBO and Homeaway

(www.homeaway.com) were altered to remove references to 3-day minimum stay and nightly

and weekly rates.

Mr. D.eWys, representing the property owners (who were not present at the hearing) gave the following

testimony:

• That it was a clerical error that the VRBO listing was not in full compliance with Chapter 41A

following the issuance of the Notice of Complaint, because the title of the VRBO listing still said

"Not taking anything less than 30 days" and that the listing was changed to comply once this

issue was brought to their attention.

• That he was unfamiliar with the website, Agoda and said that he would look into the matter with

the owners after hearing.

• That the owners previously believed that Administrative Code Chapter 41A only applied to

buildings with four or more units and thus did not apply to the subject property.

• That the property was operating as a vacation rental property and claims that when the owners

purchased the property in December of 2012, it was already being used for short-term rentals.

• That no tenants have ever been evicted from the subject property by the owners.

• T'hat the owners were confused by the Notice of Complaint and were under the impression that

the purpose of the administrative hearing was to help the owners comply with the law rather

than to be assessed penalties by the City.

Additionally, Mr. DeWys submitted documentation of upcoming reservations that were cancelled by the

owners in response to the Notice of Complaint.

Mr. Pyburn stated that he is a neighbor living at 4050 17~ Street and testified that he believed that short-

term rentals occurred at the property due to his frequently observing people arriving and leaving the

property with suitcases.

Ms. Lynch read an email she received, from Ms. Judith Hoyem into the record, in which Ms. Hoyem

states, "I am a long-time resident at 4042 17~ Street, a few doors from the property, and have had ample

opportunity to observe that the 3 units of the property have been in constant use for short-term rental for

SAN FRANCISCO 3PLANNING DEPARTMENT

4060 17~ Street

Complaint No. 2015-007583ENF

Chapter 41A Notice of Decision

September 10, 2015

the past year or even two years. I do not believe that there is anyone in long-term residence at theproperty. Everyone I see going in and out is dragging a suitcase. I am concerned that this propertyseems to have been converted exclusively to short-term rental. I do not know if the owner is violation theShort-term Rental law in operating this property exclusively for Short-term Rental, but I am definitelyinterested in making sure that the law is enforced so as to prevent the undue removal of long-termhousing units from the general residential housing market."

Mr. Reynold stated that he has lived at 4050 17~ Street since 2001 and that he has also observed the sameactivity at 4060 17~ Street as described in Ms. Hoyem's email.

POST-HEARING SUBMISSION

The representative for Casa Luna, Mr. DeWys, submitted a packet of additional information on August24, 2015. A summary of the submittal is below:

• A statement from the property manager Jeff Wyatt.• Screenshots of listings from Homeaway, Vacation Home Rentals and VRBO showing 30 day

minimums.

• Email correspondence with Agoda.com showing the removal of the listing.• Email correspondence with booking.com showing cancelation of existing bookings.• Cancellation emails with individuals.• Spreadsheet of cancellation of 40 upcoming reservations.• ~ A photo of a sign on the property that stating that Casa Luna is closed.

FINDINGS

Based on the review of the record as a whole, the hearing officer finds as follows:

1. That four dwelling units at the subject property were offered for Tourist or Transient use until atleast July 2, 2015.

2. The property owner's representative Mr. DeWys has provided evidence that the four dwellingunits at the property were no longer being offered for tourist or transient use as of July 3, 2015,including that the VRBO listings had been removed and then modified to state "30 day minimumbooking" in their titles, and the listings on www.casalunasf.com were also altered to only accept30 day minimum rentals.

3. Although the propert~s listings on VRBO after July 3, 2015, still noted a three night minimumstay along with nightly and weekly rates in their descriptions, the owners resolved the matterafter being notified by staff.

4. The property owners's representative has provided evidence that outstanding reservations orrequests to book units at the property after July 2, 2015, were either cancelled or denied by theowners.

SAN FRANCISCOPLANNING DEPARTMENT 4

406017th Street

Complaint No. 2015-007583ENF

CONCLUSION AND ORDER

Chapter 41A Notice of Decision

September 10, 2015

Based on the above findings and the evidence in the record as a whole, the hearing officer determines that

four dwelling units at the property were offered for Tourist or Transient through July 2, 2015 in violation

of Administrative Code Chapter 41A. Because this is an initial violation, the hearing officer may assess

administrative penalties from the date of the Notice of Complaint (here June 30, 2015) until the date the

violation is cured (here July 3, 2015) on both a per diem and per unit basis. Thus, by this determination

the hearing officer assesses administrative penalties against the property owners for a total of 12 days

(three days per each unit) at a rate of $484 per day. Accordingly, administrative penalties for the total

amount of $5,808.00, is now due to the Planning Department. Please submit a check for the total

amount of $5,808.00, payable to "Planning Department Code Enforcement Fund" immediately.

Sincerely,

Adrian C. Putra

Hearing Officer

Cc: Danfoura Law Offices, Attn: Christopher DeWys, 1303 9th Avenue, San Francisco, CA 94122

Messrs. Pyburn &Reynold, 405017 Street, San Francisco, CA 94114

Laura Lynch, Planner, San Francisco Planning Department

SANFRANgSCO jrPLANNING DEPARTMENT