SAN FRANCISCO

OFFICE OF SHORT-TERM RENTALS

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

October 23, 2015

Corey Lau
218 Melrose Avenue
Mill Valley, CA 94941

Francisco Gutierrez
M C Hall &Associates
605 Market Street, Floor 9
San Francisco, CA 94105

Peter Herrmann
458 Broadway
San Francisco, CA 94133

Reception:
415.558.6378
Website:
www.sfgov.org/OSTR
Inquiries:
415.575.9179
shorttermrentals~
sfgov.org

NOTICE OF DECISION
SF Administrative Code Chapter 41A Short Term Residential Rental

Property Owner:

Corey Lau
218 Melrose Avenue
Mill Valley, CA 94941

Site Address:
Assessor's Block/Lot:
Zoning District:
.Complaint Number:
Date of Notice of Complaint:
Hearing Officer:

458 Broadway
0144/013
NCD -Broadway Neighborhood Commercial
2015-005969ENF
June 30, 2015
Audrey Butkus,(415)575-9129 or audrey.butkus@sfgov.org

DECISION
The Director's appointed hearing officer, Audrey Butkus, has determined that Corey Lau, the owner of
458 Broadway, and Peter Herrmann, the tenant of 458 Broadway, have violated Administrative Code
Chapter 41A for illegally offering a dwelling unit 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.

Notice of Decision
Date: October 23, 2015

Complaint No. 2015-005969ENF

458 Broadway

DESCRIPTION OF VIOLATION
The subject property, athree-story building, is authorized as four-unit dwelling with commercial space
on the ground floors. On May 12, 2015, the Planning Department ("Department") received a complaint
alleging that an unauthorized short-term residential rental ("STR") was operating from the dwelling unit
at 458 Broadway, located on the top floor. On-line research, conducted by Department staff, found that
the subject property was being advertised for rent on a nightly and or weekly basis through numerous
STR hosting sitesz. Based on this and other information, the Department has determined that the subject
property is in violation of Administrative Code Section 41A.

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
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 the
requirements 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 May 12, 2015 the Department received a complaint for the subject property from the Office of Julie
Christensen, San Francisco Board of Supervisor, District 3, alleging illegal short-term rental acfivity. On
June 22, 2015, staff research produced at least 13 individual websites with listings advertising stays of less
than 30 days for the subject property.

i Department of Building Inspection's Report of Residential Building Record and Office of the Assessor-Recorder's Record.
z In addition to VRBO, the following other STR hosting sites were identified: Rent-Holiday-Homes, Wimdu, HomeAway, VRBO,
Roomorama, Vakast, Zilyo and HouseTrip. In addition; it was noted that listings on social media sites including Twitter (first
tweet December 15, 2014), Facebook (first post April 10, 2015), Google+ (first post December 15, 2014), and Pinterest(58 pins) were
established to promote the STR use for the subject property.

SAN FRANCISCO
OFFICE OF SHORT-TERM RENTALS

Complaint No. 2015-005969ENF

458 Broadway

Notice of Decision
Date: October 23, 2015

NOTICE OF COMPLAINT AND APPARENT VIOLATIO

r and to the tenant by certified

aint to the property owne

On June 30, 2015, staff issued a Notice of Compl
and non-certified mail.

On July 1, 2015, staff posted a notice at the

of the hearing.

subject property notifying the property owner

and the tenant

PRE-HEARING SUBMISSION
st 12,2015:
Pre-Hearing Submission for Hearing on Augu
Owner
Evidence submitted by Mr. Cory Lau,Property
ney, Mr. Francisco Gutierrez, .includes a
Evidence presented from Mr. Lau's attor
nally offer the subject property for STR use.
statement from Mr. Lau that he did not perso
tenant permission to establish an STR use,
However, Mr. Lau did state that he gave his
property for two weeks. This was noted in
and permission was granted to sublease the
ed into on October 18, 2013, by Mr.
the lease agreement for 458 Broadway, enter
lease states that the tenant, Mr. Herrmann,
Herrmann and Mr. Lau. More specifically this
r than 15 days at a time:'
"is allowed to have paying guests no longe
ant
Evidence submitted Robyn Reynolds, Complain
June 1, 2015 and July 2, 2015, which were sent
Ms. Reynolds submitted two letters, dated
-in eviction notices. The first letter states
by her to Mr. Lau in response to his owner move
, has not been seen for many years and
that Mr. Herrmann, the tenant in 458 Broadway
ment. The second letter explicitly stated
that there are many strangers staying at the apart
illegal STR and included approximately 250
that 458 Broadway was being used as an
various hosting sites and social media sites.
pages of screen shots, dated June 29, 2015, of
subject property.
The listings advertised nightly rates for the
rtment with an activity log and video
In addition, Ms. Reynolds provided the Depa
e with luggage came and went from the
evidence to show that various groups of peopl
2, 2015.. These groups appeared to have stayed
apartment between May 12, 2015 and July
and visitor log.
for less than 30 days based on video evidence
provided text messages between her and Mr.
As part of her submittal, Ms. Reynolds also
Ms. Kee appears to be the caretaker of the
Lau, Mr. Herrmann, and an Amy Kee.
ges, beginning in July 7, 2013, involve
property for Mr. Herrmann. The texts messa
Mr. Herrmann, and Ms. Kee regarding the
complaints from Ms. Reynolds to Mr. Lau,
irs apartment.
behavior of various guests staying in the upsta
Evidence submitted by Mr. Peter Herrmann
tted evidence that included a statement
On August 2, 2015, Mr. Herrmann submi
Marc Pa. In addition, per Mr. Herrmann, two
regarding a sublease of Unit 458 for Mr.
Pawel Wojcieszyn are currently staying in
individuals, Mr. Nelson Castellanos and Mr.
Herrmann did not specify the relationship
unit 458 for more than 30 days. Although Mr.
and himself or Mr. Pa, this stay of more than
between Mr. Wojcieszyn, Mr. Castellanos,
video evidence submitted by Ms. Reynolds.
30 days is collaborated by the visitor log and

3
SAN FRANCISCO
OFFICE OF SHORT-TERM RENTALS

Notice of Decision
Date: October 23, 2015

Complaint No. 2015-005969ENF

458 Broadway

Mr. Herrmann goes on to state that Mr. Pa informed him that he "made some marketing
experiments on some sites' and states that the ad that was provided in the hearing notice
is not proof that short-term tenants have stayed at the apartment.
Mr. Herrmann also included a sublease between him and Mr. Pa; the sublease began on
January 1, 2015. He also included an email to Department staff asking whether PDF
evidence can be submitted via email, and an email to Mr. Pa, dated July 31, 2015, to
terminate their sub-lease effective on August 18, 2015.

ADMINISTRATIVE HEARING
witnesses
On August 12, 2015, the hearing officer convened the administrative hearing. All testifying
people:
following
the
by
attended
were sworn in and the hearing was audio recorded. The hearing was

Ms. Audrey Butkus, hearing officer

Mr. Binh Nguyen, staff planner

Mr. Francisco Gutierrez, attorney representing the property owner, Corey Lau

Ms. Robyn Reynolds, the complainant

Mr. Tyson Redenbarger, attorney for the complainant, Ms. Robyn Reynolds

Mr. Nguyen gave the following testimony:

of
On May 12, 2015 the Department received a complaint for the subject property from the Office
Julie Christensen, San Francisco Board of Supervisor, District 3.
after
On May 21, 2015 a Notice of Complaint3 was issued to the property owner, Mr. Cory Lau,
receive
not
did
staff,
t
Departmen
the Department received a second complaint. Mr. Binh Nguyen,
a response to this notice.
t,
From June 17, 2015 June 22, 2015 Department staff contacted Robyn Reynolds, the complainan
n
informatio
more
who lives in the unit below 458 Broadway at 456 Broadway, to request
a
regarding the allegation of STR use operating from 458 Broadway. Ms. Reynolds provided list
of active short-term listings for the subject property.

On June 22, 2015 Department staff confirmed 13 active STR listings and continued to monitor
these listings from June 22, 2015, until August 10, 2015.
of the
On June 26, 2015 Department staff conducted an interior inspection to the common area
and
patio
the
that
verify
able
to
was
staff
t
subject property. During the inspection, Departmen
the
a
matched
Roomoram
furniture pictured in the listings on Wimdu, VRBO, HomeAway, and
only
patio and furniture in dwelling unit at 458 Broadway. In addition, staff found that there are
two dwelling units in the building.
On June 30, 2015 A Notice of Complaint, detailing a hearing date for August 12, 2015, was issued
issued
to Mr. Lau and the tenant of 458 Broadway, Peter Herrmann. Although Department staff
, only
procedure)
these notices via certified mail and regular mail (per the Departments standard

owners of a potential Planning Code

'Notice of Complaint is a courtesy notice issued by the Department to alert property
Violation and requests the property owner to contact the Planning Department.

SAN FRANCISCO
OFFICE OF SHORT-TERM RENTALS

Complaint No. 2015-005969ENF

458 Broadway

Notice of Decision
Date: October 23, 2015.

on July
notice was later posted at the subject property
the certified mail was returned. A hearing
1,2015.
hosting
od of the active listings, it was noted that the
On July 2, 2015 During the monitoring peri
s."
night
30
of
modified to include "a Minimum Stay
site known as "Rent-Holiday-Homes'.' was
inued to be
mum stay, nightly rates of $150.OQ cont
Although the site advertised a new mini
a, also
VRBO, HomeAway, Wimdu, and Roomoram
advertised. . Other hosting sites, including
continue to advertise nightly rates.
ng sites were
d the listings located on the above hosti
On July 16, 2015 Department staff note
ast". As
"Vak
ch sites4 known as "Housetrip" and
deleted; including, the listings on the metasear
known as
three are still active on the metasearch site
of 8/10/15, of 13 listings that were found,
"Zilyo."
in regards
Department received a response and evidence
From July 31, 2015 August 2, 2015 the
rrez,
wing interested parties: Mr. Francisco Gutie
to the Administrative Hearing from the follo
ence
evid
d
itte
Reynolds, complainant, and both subm
attorney for the property owner, Ms.Robyn
Herrmann submitted evidence.
to the Department and, on August 2, 2015, Mr.
r, gave the following testimony:
Mr. Gutierrez, attorney for the property owne
renewed each
Herrmann based on a lease that has been
The subject property is rented by Mr.
year.

t for short
, the lease allowed Mr. Herrmann to suble
In 2012 while rented out to Mr..Herrinaiui
n law at
know
any
st
stated he believed this to not be again
periods of time however; Mr. Gutierrez
k any
brea
to
sion was meant to allow Mr. Herrmann
the time and additionally no lease provi
known law.

to comply with
Notice of Violation and had asked him
Mr: Lau informed Mr. Herrmann of the
the law.
into compliance as Mr.
ty than Mr. Lau to bring the property
Mr. Herrmann has a greater abili
-term rental or
ty to either cease operation of the short
Herrmann is the person with the abili
matter due to the
Lau is limited in his ability to act in this
discontinue the activity, however Mr.
evicting Mr.
ol ordinance provisions preventing him from
lease allowing subletting and rent contr
Herrmann.
Mr. Herrmann could
inue the hearing to a later date. when
A formal request was made to conf
attend the hearing.

lainant, gave the following testimony:

Mr. Redenbarger, attorney for the comp

Gutierrez which are summarized below:

A series of questions were posed to Mr.
in contact
d to contact Mr. Herrmann, have you been
o You mentioned that you attempte
in the United States?
with him? Do you believe he is currently
believed
been in contact with Mr. Herrmann, he
Mr. Gutierrez replied that he had not
mann
Herr
and he did not know for how long Mr.
Mr. Herrmann to presently be abroad,
had been abroad.
le?
Mr. Herrmann or Marc Pa are not real peop
o Do you have any reason to believe
er search engine's data to produce their own

4 A metasearch tool is tool that uses anoth

results from the Internet.

SAN FRANCISCO
~TT A T C

Nofice of Decision
Date: October 23, 2015

Complaint No. 2015-005969ENF

458 Broadway

Mr. Gutierrez replied that he had no reason to believe Mr. Herrmann was not a real
person and that he could not speak to any other person as he was not aware of anyone
else involved in the case.
o

Why do you believe Mr. Herrmann needs to be at the hearing? Do you believe he could
respond to the violations in writing?
Mr. Gutierrez responded that Mr. Herrmann is the tenant in possession and is the
responsible party for the violation therefore he needs to be present to respond to the
violation. He believed Mr. Herrmann could respond to the violation in writing but he
believes the tenant should be present due to the severity of the measure at hand.

Do you believe Mr. Lau knew the short-term rentals were occurring, and has he ever said
anything to you that would indicate he knew the short-term rentals were occurring?
Mr. Gutierrez replied "no" on both counts.

Do you know where Mr. Lau works? Is it at 460 Broadway, the liquor store in the same
building as 458 Broadway?
Mr. Gutierrez stated he knew where Mr. Lau works. Mr. Lau bought the building
including the liquor store but he is not always present at that liquor store. He does work
at the liquor store pretty much all the time.

Do you know if Mr. Lau has ever been involved in the key exchange for guests who stay
at 458 Broadway?
Mr. Gutierrez responded that Mr. Lau has not been involved in any of the allegations
involved in the complaint.

Do you know who pays rent for 458 Broadway?

Mr. Gutierrez responded the rent should be paid by the tenant, Mr. Herrmann.

Ms. Reynolds, the complainant, gave the following testimony:

She is the tenant at 456 Broadway which is the unit between 458 Broadway and the liquor store,
"Broadway Liquors" which Mr. Lau runs every day. She sees Mr. Lau daily.
She believes Mr. Lau has multiple places in his lease with Mr. Herrmann wherein short-term
rentals are explicitly allowed but long-term subletting is not allowed.

She has only met Mr. Herrmann one time when he first moved in three years ago. He told Ms.
Reynolds that he runs Airbnb properties all over the world and the subject property would also
function as one of these uses. He stated to her that he might be there from time to time however
Ms. Reynolds has not seen him since that day.

Mr. Herrmann introduced Ms. Reynolds to Amy Kee who he stated was a friend of his. She
serves as the property manager for the short-term rental; taking care of trash, cleaning, etc. Ms.
Reynolds was instructed to contact Amy Kee with any concerns regarding the subject property.
In three years there has never been a consistent pattern of long-term tenancy in the subject
property, and she believes there is no way that Mr. Lau could have failed to notice the type of
activity that was occurring.

SAN FRANCISCO
OFFICE OF SHORT-TERM RENTALS

Notice of Decision
Date: October 23, 2015

Complaint No. 2015-005969ENF

458 Broadway

12, 2015, for the above referenced

At the conclusion of the administrative hearing held on August
period to allow for the submission of
property, I closed the hearing but left the record open fora 14 day
of open record, Ms. Reynolds stated
additional information by all interested parties. During the period
ng at the subject unit. Additionally, I
she believed the illegal short-term rental activity may still be occurri
the necessary information from the
found the open record period did not allow sufficient time to collect
ance. In the interest of providing
property owner and tenant to prove the subject property was in compli
and respond to new information
all parties adequate time to submit additional materials, and to review
continued it to October 14, 2015 to take
submitted, on September 10, 2015 I re-opened the hearing and
staff conducted a full re-notice of the
place at 1650 Mission Street, Suite 400, Room 431. Additionally,
hearing's continued date and time.

POST-HEARING SUBMISSION
Pre-Hearing Submission for Continued Hearing on October 14,

2015:

Evidence Submitted by Corey Lau

Francisco Gutierrez submitted into evidence the following:
t is allowed to have
A signed lease modification to remove the clause that states, "Tenan
25, 2015.
August
dated
was
paying guests no longer than 15 days at a time." This
nn, dated August 14,
A Thirty-Day Notice to Cure or Quit was issued to Mr. Herrma
2015.
14, 2015, in which Mr.
Communication between Mr. Lau and Mr. Herrmann dated July
from ALL websites."
Lau.stated that,"You[Mr.Herrmann] must remove your apartment

that the listing for the

Emails from Cory Lau to Zilyo on August 22, 2015 requesting
apartment be removed from Zilyo's site.

Evidence Submitted by Robyn Reynolds

Robyn Reynolds has submitted into evidence the following:
Active listings for the apartment on the site Zilyo.
Screen shots of several social media accounts for the unit.
into the apartment.
A video from August 17, 2015, which shows a new tenant moving

Evidence Submitted by Peter Herrmann

Peter Herrmann has submitted into evidence the following:

Emails for three cancelled bookings.

is accompanied by
One sublease for the period from July 2, 2015 to Augus# 18, 2015. This
nt's identification card.
records of rent payments made via PayPal and a copy of a subtena
er 18, 2015. This is
One sublease for the period from August 18, 2015 to. Decemb
copy of a subtenant's
accompanied by a record of rent payment to Peter Herrmann and a

identification card.

SAN FRANCISCO
OFFICE OF SHORT-TERM RENTALS

Notice of Decision
Date: October 23, 2015

Complaint No. 2015-005969ENF

458 Broadway

CONTINUED ADMINISTRATIVE HEARING

the original
On October 14, 2015, the hearing officer convened the administrative hearing continued from
in and the
sworn
were
witnesses
hearing on the matter that took place on August 12, 2015. All testifying
hearing was audio recorded. The hearing was attended by the following people:

Ms. Audrey Butkus, hearing officer

Mr. Binh Nguyen, staff planner

Mr. Francisco Gutierrez, attorney representing the property owner, Corey Lau

Mr. Alexander Rawitz, current subtenant of 458 Broadway

Mr. Tyson Redenbarger, attorney for the complainant, Ms. Robyn Reynolds

ION"for a

Mr. Ngyen, staff planner, gave the following new testimony (See "POST-HEARING SUBMISS
detailed description ofsubmitted documents)

of
On August 14, 2015 Francisco Gutierrez submits new evidence to the Department on behalf
Mr. Lau.
to
On August 24, 2015 Mark Hooshmand, attorney for the complainant, submits new evidence
the Department.

Lau
On August 26, 2015 Francisco Gutierrez submits additional communication between Cory
and Peter Herrmann.

On September 9,2015 the hearing was continued to October 14, 2015.

On September 29, 2015 Peter Herrmann submits new evidence.

Lau and
On October 1, 2015 Francisco Gutierrez submits a lease modification signed by Cory
Peter Herrmann.

Based on the new submittals, staff finds:

458 Broadway is currently in compliance with Chapter 41A of the San Francisco
Administrative Code.
Staff could not find any active listings (where content can be controlled) advertising the unit
at 458 Broadway for short-term stays after July 15, 2015.

Zilyo,
As of October 13, 2015, the unit at 458 Broadway was listed on the metasearch site
have
however, the unit is not bookable from this site and both Mr. Lau and Mr. Herrmann
made efforts to contact the site administrator to get the listing removed without success.
l
Staff recommends that the subject property be found in violation of the short-term residentia
rental of one residential unit for 16 days, from June 30, 2015(the date of the NOC),to July 15,
2015,(the date nightly advertisement on all main hosting sites were deleted). However, if the
property owner continues to remain out of compliance, staff recommends the penalties
continue to accrue until such time that the property owner comes forward to correct the
violation.

SAN FRANCISCO
OFFICE OF SHORT-TERM RENTALS

Complaint No. 2015-005969ENF

458 Broadway

Notice of Decision
Date: October 23, 2015

Mr. Gutierrez, attorney for the property owner gave the following testimony:
that Mr. Lau
He emphasized Mr. Lau's non-involvement in the violation. He also stated
aware of the
attempted to work with the tenant in order to cure the violation once he became
Notice of Compliant.

He found the listings on the site "zilyo" are not active and are unable to be booked.
at the hearing for
Mr. Rawitz, current subtenant at 458 Broadway was available and present
questioning.

Mr. Redenbarger, attorney for the complainant, gave the following testimony:
authorized the
The property owner knew that short-term rentals were occurring at the property,
on them. It is
short-term rentals to occur, and was not diligent in removing them or following up
m stays
short-ter
for
property
apparent that there were active listings advertising the subject
available until at least July 15, 2015.

The complainant requests that a determination of violation be made at this time.

FINDINGS
Based on the review of the record as a whole, the hearing officer finds as follows:
July 15, 2015.
1. The dwelling at 458 Broadway was offered for Tourist or Transient use until at least
of rent paid and
2. The tenant, (Peter Herrmann), submitted two signed leases along with proof
occupied with
picture ID's of occupants purporting to show the dwelling at 458 Broadway was
long-term subtenants starting on July 2, 2015 and until December 18, 2015.
or Transient use on
3. The dwelling unit at 458 Broadway is not currently being offered for Tourist
listing and/or its
any known hosting platform where the account holder has control of the
content.

CONCLUSION AND ORDER

officer determines that
Based on the above findings and the evidence in the record as a whole, the hearing
use through at least
the dwelling unit at 458 Broadway was offered or operated as a Tourist or Transient
violation, the
initial
an
is
this
Because
July 15, 2015 in violation of Administrative Code Chapter 41A.
of Complaint (here June
hearing officer may assess administrative penalties from the date of the Notice
on both a per diem and
30, 2015) until the date the violation is believed to be cured (here July 15, 2015)
penalties against the
ative
administr
per unit basis. Thus, by this determination the hearing officer assesses
ative penalties for
property owners for a total of 16 days at a rate of $484 per day. Accordingly, administr
submit a check for the
the total amount of $7,744.00, is now due to the Planning Department. Please
Fund"immediately.
ent
total amount of $7,744.00, payable to "Planning Department Code Enforcem

Sincerely,
CC:
r

G~Z~~~

Audrey Butkus
Hearing Officer
SAN FRANCISCO
OFFICE OF SHORT-TERM RENTALS

Binh Nguyen,Planner, San Francisco Planning Department

Christine Haw,Planning Department
Adrian Giannini, Office of the Treasurer and Tax Collector
Margarita Rodriguez, Office of the Treasurer and Tax Collector