SAN FRANCISCO (KPIX 5) – Small property owners showed up in droves to the Rent Board this week to debate whether landlords should be required to disclose their finances to pass along any debt. Currently, they don’t have to, and tenants want that to change.

Small property owners like Salman Shariat say the ability to pass on this debt is what keeps them in business.

“When we purchased the property we relied on passing the 7% on,” Shariat said.

He’s even used discretion–an elderly tenant in his building is not being charged.

“We voided the check, sent it back, saying, ‘You’re a nice guy, we have a good relationship,'” Shariat said.

Shariat is who the concept known as “reasonable reliance” was written for. It’s meant to protect mom and pop landlords who reasonably rely on passing on their debt to stay in business, but increasingly, it’s large corporate landlords who have been passing on debt, pushing fixed income tenants out of San Francisco.

Stories from tenants who cannot afford to stay led the Board of Supervisors to direct the board to change the law.

As it stands right now, tenants like Greg Pennington have to apply for what’s called a hardship exemption if they cannot afford to pay a rent increase. The Board of Supervisors wants to flip that and force landlords to disclose their finances to prove they need to pass the debt on.

“I don’t know where I’m going to go because I’ve been my whole adult life in San Francisco,” Pennington said.

Pennington is one of several tenants who say they make just over the amount that would allow them to qualify for a hardship exemption.

114 cases regarding reasonable reliance have come before the rent board in the past year and 74 have been resolved. Veritas Investments, the city’s largest corporate landlord, withdrew 24 cases voluntarily. 40 cases are still pending, nine of which are from another large corporate landlord: Brick + Timber.

“They like to give us hard time to get out,” Ferris Ghanem, a Brick + Timber tenant said.

“What we’re missing in this whole case is the nuance and reasonableness in people,” Shariat said.

Tenants like Pennington say that’s the problem, large corporate landlords have broken their trust.

“All of a sudden when home doesn’t feel safe and you don’t have answers it’s a hopeless feeling,” Pennington said.

Brick + Timber declined our request for comment for this story.

Read the rest of Susie Steimle’s original series on the Bay Area housing crisis: Project Home.

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