Hey Kip, Hope You Like the Showers! (Or The Worst Landlords In SF Go To Jail)

So, some people may remember but years ago there was this perfectly awful couple of landlords named Kip and Nicole Macy. They did some very naughty things. These included trying to unlawfully evict their tenants, cutting out the floor supports of the tenants who opposed their unlawful evictions, and faking threats against their own attorney.

When they were finally caught, they plead innocent. When the day of trial came, they didn't show up. Why? Because they jumped bail and went on the lamb. Now the District Attorney at that time almost caught them. But guess what? They didn't feel it was important enough to spend the money to extradite criminals who preyed on tenants. So Kip and Nicole got to live in the lamb for 3 more years.  At last report, they were living in Italy (life is rough out there).

For whatever reason, I'm guessing they ran out of money, they returned this week to San Francisco. They were arragined and have plead guilty. Apparently the sentencing hearing will be in August.

Now here is the best part. The sentence they negotiated is for 4 years each. The plea offer before they jumped bail? A year. To make matters worse, or better from my perspective, is that they now have 3 strikes against each of them. Meaning if they screw up again, they go away for a long, long time.

4 years each is a start. Hopefully Kip will continue to display the arrogance he has had (which I am pretty sure has included leaving a few comments under an alias back in the way) and either someone in prison makes him pay for that or he gets a 3rd strike after his release.

Either way, if I knew how, I would be taking up the collection for a soap fund for Kip Macy and his wife.

Hey Kip, enjoy your new home!

Evictions Are Serious People

So you are a renter. And for some inexplicable reason bad stuff starts to happen. You lose your job. Your roommate bails on you. You get sick. You have a fight with a neighbor that gets loud. And then the notice to quit comes.

Guess what? You have just entered the eviction process. Except in California, legally, we don't call it the eviction process. It is know as an unlawful detainer. And for tenants, it is not a happy place to be.

Why? Part of it has to do with the nature of the unlawful detainer proceeding. Its quick. Its limited in what issues can be brought up. It favors the property owner, but then that is the casse with almost all landlord-tenant rules.

Another part of the problem is because most judges do not like unlawful detainer cases. They're messy. Often times at least one of the parties is representing themselves. They keep judges away from more interesting, or important, cases. Also, in counties where there is rent control, the judges often times do not have a clue about the rent control laws and how they interact with state law. There's a whole analysis that I'm not going to get into in this article about that, but needless to say, judges will bend over backwards to avoid having to make a decision, in some counties, when they can construe the facts in such a way as to make easier decisions. Don't think so? Take a look at some of the unpublished decisions out of San Francisco Superior Court's Appellate Division, especially on the issue of Civil Code section 827. Something else I'll have to write about in the future.

But back to my main point. If you are a tenant, you face an uphill battle if you find yourself in an unlawful detainer. You do not want to find yourself there.

So how do you avoid it? You take steps to protect yourself. First one, act like a grownup. Just because you are not the owner of the property, does not mean you should not just ignore problems. If the heater does not work, send you landlord an email. Don't just call him and leave a message. Grownups leave paper trails. When you were a kid, you could ask your mom for some money to do something (like say buying lemons for your lemonade stand). Your parents, if they wanted something, needed to put it in writing (whether it be a loan, a permit, a business license. Why? Because the paperwork spells out what they can and cannot do. It also spells out what theother side of the agreement can and cannot do. That way, later on when someone is claiming that they have the right to do something, there is actual evidcence of it.

Second, think about your well being. That's right, be a little selfish and think about what is good for you. The landlord is getting something for themselves, its called money. Now, if you want to ensure that you are getting something for that exhorbitant amount of money which you pay in rent each month, you have to look out for yourself. What does this mean? If there is a problem, do something about it. Now, you can't make major repairs or alterations under most leases. But for those types of things, the landlord is responsible. How will they know to act responsibly if you, the renter, do not take steps to make sure they know about it. Furthermore, if you do not keep a file on things, how will you be able to present a defense should things go south in your living situation? With the proliferation of smart phones and cloud drives, how hard is it to image your documents and save them into a file? Not very. But if you ignore it, and lose the information, don't think for an instant that the landlord will save you by giving you a copy. Remember, the landlord is working for his self-interest. You should do the same.

Third, don't be greedy. A little contradiction here? Perhaps. But when I say don't be greedy, understand that the law requires the rental unit to be habitable, not four star certified. If you are paying $1100 a month, do not expect that the landlord will come in and change the carpets every six months and install granite countertops. If you think that way, its going to lead to conflicts. And conflicts between landlords and tenants rarely end well for the tenant.

Four, don't be an ostrich. An ostrich closes its eyes, sticks its head in the sand and hopes tha the predator does not kill it. A tenant who ostriches is one who will soon be looking for a new place to live, more likely than not with an eviction on their record. If the landlord notifies you of a lease violation, do not ignore it. See if its valid. If it is, correct it. If its not, then tell them IN WRITING. Refer to the part of the lease that makes it their problem, or gives you the power to do something. If it is a Notice to Quit (whether it be 3, 30 or 60) take it seriously.

Now, if you have hit the point where the landlord is seeking to do an eviction, do not be ashamed and ASK FOR HELP. Let me say this again: do not be ashamed and ASK FOR HELP. Too many tenants ignore a notice to quit. Its the precurors to an unlawful detainer action. Unless you are an attorney who pracitces landlord-tenant law, the odds are you do not have enough information to represent yourself. If you want to try and keep your home, rented as it may be, then you should seek out a lawyer's advice on what to do. Will it cost money? In many cases the answer is yes. Is it worth it? In my experience, having a lawyer represent you significantly increases the chance that the tenant will have a better outcome.

Now for the people who say to themselves, "I can't afford an attorney", and actuallly cannot, there are other options. Many counties have a pro bono program which may be able to assist you. In San Francisco, the San Francisco Bar Association's Volunteer Legal Services Project coordinates pro bono placement for low income people in unlawful detainers and other types of cases. For people who do not meet the eligibility requirements, there are panels of attorneys who have agreed to take cases on at a reduced fee.

While you are looking for an attorney, remember, you are on a ticking clock once you have been served. You have 5 CALENDAR DAYS in which to file and serve an answer. That means, if you get it on a Tuesday, your answer must be on file with the court by the end of Monday. If you get served on a Thursday, your answer is due on Tuesday. They do count the weekend days unless the final day is a weekend or holiday. Then the due date beceoms the next court day. Failure to answer means that the landlord can get a default and then a default judgment against you. That means they can get the sheriff out to physically remove you from the property.

For those of you in rent controlled jurisdiction, do not for a minute believe that your rent board can save you from this by filing a complaint with them. They can consider it, but the unlawful detainer case filed in the superior court will take priority and precedence. State court trumps municipal administrative agency hearings almost every time.

So what should you do while you are looking a lawyer, make sure that an answer gets put in. In some counties, there are organizations which help pro per (self-represented) tenants to file answers. In San Francisco, there is the Eviction Defense Collaborative. They will help you to file the appropriate paperwork. They charge a small fee, on a sliding scale fee, that is more than worth it.

If you do not take an unlawful detainer seriously, no one will for you. Losing an unlawful detainer case, either because you defaulted, by not showing up, or at trial because you did not have any documentation about what was going on between you and the landlord, it will effect you for years. It will be reported on your credit, Furthermore, there are agencies which landlords use to see if a prospective tenant has been evicted before. It will make finding a new place that much harder.

Take it seriously. Protect yourself. Get help.

Irony?

You run a company. You make your business by evicting low income tenants so that you can sell off the units in the buildings you have purchased for prices between $400,000 and $600,000 each.

What would you call your company?

Well for at least one company that does engage in this practice, they call themselves:  SF Affordable Housing LLC.


Not wanting to get the esteemed author angry at me, but does this not count as irony? 


What's more disgusting is that one of the members who was interviewed had the audacity to state, "Basically, I cannot afford to keep the tenants who on average paying $300 a month in rent[.]" Let's be clear about something, this individual, and any partners he may have, is not the least bit interested in becoming a landlord. His company, based on the report I have seen, buys properties to sell them as individual units, either condos or TICs. 


If you are going to be a bastard and kick people out of their homes, at least be honest about it. You had no interest in being a landlord. You wanted to divide up the property into ever small portions to sell off at inflated prices to line your wallet with more money.


You are, I believe the technical term, a greedy bastard who wants to be liked. If you are going to be a greedy bastard, then be one. Don't try and fool people with statements such as, "If those people need assistance, I’m in a 100 percent agreement that they should be helped, but it shouldn’t be the burden on a landlord." Its insulting because you have no intention of being a landlord.

At least be as honest as the guy who was begging for money down on Kearny and Bush yesterday. He had the decency to hold up a sign saying "Need money for beer."

San Francisco Housing Authority - The Other San Francisco Disaster

Alright. Maybe that's a little unfair. In that it implies that there are only two San Francisco disasters going on. Our Board of Supervisors and Mayor, when he is not campaigning (and by the way, when was the last time he wasn't?), seem to create a new one with each meeting.

But anyway....

San Francisco Housing Authority are the mandarins who are charged with providing and maintaining public housing in the city and county. Only, they are not very good at it. However, they're not quite as good as Muni is at running up a deficit. They've only managed to run up a $ 2.2 million one. That's chump change to SFMTA.*

Small favors I guess.

Why is this? A large part of it has to do with the fact that SFHA, apparently, simply does not collect the rent. Because, apparently, the SFHA thinks it has something else to do on the first of the month when it comes time to collect the rent. According to today's SFGate, SFHA has failed to collect at least $1.1 million in rent. There are, at least, 1,100 tenants who are behind in their rent. Basically, that means that 1 in 6 tenants of SFHA are simply not paying their rent. There is one person who owed $28,000 according to a report from last year. No word yet on whether they have collected.

Does anyone out there know what happens when people don't pay their rent? In case you don't, I do. There are two options. First is an unlawful detainer. An unlawful detainer is fancy lawyer talk for an eviction. The second option is sue for the rent, but not evict.

If I am being honest, there is a third option. It is apparently the SFHA's preferred one: ignore the situation. I suppose that is the easiest for the SFHA. In my experience, the people who work for SFHA are one step above slumlords. Its not they are trying to gouge the tenants in order to profit. Rather, the people who work there are trying to do as little as possible to earn their city salary. If the SFHA actually depended on being efficient to meet their budget, then they might actually have taken steps to get ahead of this problem years ago. However, since the head of the SFHA, as well as the rest of his staff, gets paid no matter how bad a job they do, then its real easy not to be proactive.

Yeah, I know. SFHA won the prestigious "Most Improved" Award from HUD. If the agency wasn't so horribly mismanaged, it wouldn't need to win the award. And the fact that it has decreased the uncollected rent by $1.9 million should not be taken as a measure of success. It should be taken as a measure of failure because three years later, they still haven't gotten the rest of the problem under control. Either you are doing your job, or you are not. And there is no reason that SFHA cannot be doing its job. The people who manage and operate it allow it to underperform. And not just when it comes to collecting the rent either.

So back the question of what will they do? More than likely, they are going to unleash the landlord attorneys that the SFHA contracts with to begin eviction proceedings. The problem is, the people that they are going after the poor. Its not like they are going to get a whole lot of blood out of those stones. Losing their SFHA housing, a lot of them are suddenly going to find themselves.... well homeless.

And as we all know, San Francisco has been doing such a bang up job with homelessness. So of course, SFHA wants to contribute more to that project.

My suggestion? SFHA should just forgive all unpaid rent under $5,000.00. The likelihood of recovering it from their tenants is really, really low. The only thing that it will do is just flood the San Francisco courts with a boatload of unlawful detainer cases. The SFHA will spend a dollar to recover a nickel, and a whole lot of people will end up homeless. However, the flip side of the forgiveness program is that starting, say August 1, SFHA will rigorously collect the rent which is owed. If the rent is late, because SFHA has allowed its tenants to get out of the habit, they will be immediately brought in for counselling to see what is going on. If its late a second month, the three day notice goes out and unlawful detainer to follow.

Would you guess this proposal comes from someone who spends a large part of their practice representing tenants? Well, it does.

The final part of the plan? Fire the head of the SFHA and his staff. Hire new people who are given strict metrics by which to judge their performance. The fact that City and County of San Francisco has allowed this to go on for this long is ridiculous.

People need an affordable place to live, even when they are poor. But conversely, being poor should never be an excuse for people not honoring their end of the bargain. Too often, we here in San Francisco only subscribe to the first sentence.

* Of course, I would be remiss by not stating that SFMTA hasn't gone bankrupt yet. SFHA was all but bankrupt a few years ago because it had managed to perform so poorly that it lost a series of employment sexual harassment suits and a negligence suit because the maintenance of one of the buildings was so bad that a grandmother and her grandchildren died.

The Worst Landlords Ever Just Hit A New Low (Kip and Nicole Macy Case)

So I have been super busy lately, which goes to explaining the dearth of posts lately. But as I was finishing up a case yesterday, some news floated across my path, and I finally have time to talk about it.

You may or may not remember Kip Macy and his wife. Two years ago, they got themselves into trouble. They were so troublesome, that the City and County of San Francisco had to step in and charge them criminally instead of letting the civil courts handle the problem. This lead to the saga of the Macys' bail. After the Macys' attempt to have the charges thrown out failed, they finally made bail.

Well, Kip Macy made bail and let his wife stay in jail while he was trying to raise the money. Eventually, he got her out too. How did he do this? Apparently, Mr. Macy convinced his parents to put their home up as collateral for their bond. Along with turning over their passports, the Macy's were granted bail and released from county jail.

Now, in case you don't know, the purpose of bail to ensure that someone shows up for court. If you fail to show, the court can forfeit the bond. Meaning, that if the Macy's did not show up for court, the judge could forfeit the bond. Which means that the bail bondsman would go after the Kip Macy's parent's home.

This was last year. Since that time, the Macy's have been negotiating with the District Attorney's office to cut a deal. (Incidentally, does Kamala Harris' office ever actually prosecute someone vigorously?) The deal according to the SF Chronicle's people, that was offered was a year in county and five year's probation. When you consider that the three burglary charges alone could have resulted in 8 to 24 years, in addition to $30,000 in fines, and this is a pretty good deal. Its an even better deal when you consider that the Kip and Nicole Macy already have heft time served credits for the months that they were in jail awaiting trial, and it would have been much less than a year they would have spent in jail.

Well, they rejected that deal.

So what happened next? What do you think would have happened, given the track record of these two? Think they showed up in court ready to proceed with clearing their names? Which is, coincidentally, something you would expect innocent people to do. Especially since they had convinced Kip's parents to put their own home up as collateral for the bail.

Well on June 4, there was a scheduled hearing in the case. And the Macy's did not show up. And, the ever vigilent people working at the S.F. D.A.'s office failed to notice something about the Macys' passports when they were surrendered as part of the bail. They did not notice that the passports were about to expire. Which means, according to the story, that the Macys' may have new passports and be fugitives abroad.

And they said that those to two wacky kids were going to break up. I guess when they faced the decision of divorce or throwing Kip Macy's parents under the bus, it was an easy decision to make.

So now, the Macy's are fugitives. The judge has issued a no bail bench warrant for them. And I am betting that the bail bondsman is very keen to get them back, so he isn't out money.

Like I said at the top, the worst landlords ever just managed to find a new low. Not only are they despicable landlords, but apparently cowards as well.

Schadenfreude - Is It Really Wrong?

Because right now, I'm really doing schadenfreude kick.

Why?

Because Frank Lembi is having more than a little trouble. The owner of CitiApartments is not having the best of years. Not only are the banks taking over some of his buildings, the city continuing its case against his company for the way it treats the tenants of the buildings, and a new set of lawsuits has been filed because apparently CitiApartments has been failing to return rent deposits (what could be called: stealing).

By the way, I think it should be pointed out that the name CitiApartments apparently is no more. CitiAparmtents has now morphed itself into FirstApartments. Not content to have one new name, they apparently have another name: Urban Pioneer Properties.

Its a new name, but its the same company. Same management.

But now, in addition to all and having to change the letterhead, Mr. Lembi is facing possible criminal charges.

Apparently Mr. Lembi has written a couple of bad checks. The total of those bad checks? $298,500. To a casino.

A court in Nevada has apparently issued a warrant for his arrest. Darn shame it happened to such a nice guy.

Too bad this isn't 40 years ago when the mob still ran the casinos. Then justice might have been more fun in this case.

Alright, enough of the schadenfreude.

More on the CitiApartments Cases

So I have been keeping my ear to the grounds of the various cases against CitiApartments and the Lembis. The short answer to "what has been going on" is that the two cases filed on behalf of tenants is almost over. The case filed by the San Francisco City Attorney's Office is still progressing.

In the cases filed by the individuals, there was a flurry of activity in the past few months, This included a couple of motions to compel by the various parties. The discovery commissioner made a few Solomonic decisions so no one apparently got everything that they wanted (or so I have been told). A deposition of did happen, but the parties have been very mum about what actually happened during it. Whatever happened during the deposition of the CitiApartment personnel sparked a very quick round of settlement negotiations. All I know for certain is that settlement agreement which came about because of these talks is confidential.

Now, as many lawyers will tell you, this could mean a number of things. However, it is interesting to note that this was came about after the initial deposition of the CitiApartment people. On the one hand, it could mean that the number crunchers from the CitiApartment insurance company decided that the cost of defense was outweighed by potential liability and they made an offer. Of course, it could also mean that the deposition went particularly well for the tenants which forced the CitiApartments people to come up, in conjunction with their insurers, with a real settlement proposal rather than risk a trial with some damaging.

Aren't confidential settlements great? A multitude of sins can be swept under the rug with them.

Of course, the City and County of San Francisco's case against the Lembis and CitiApartments is apparently still on going.

CitiApartments 2

So the Citiapartments case continues on.

In the event that anyone missed it, CitiApartments has been on a bit of a P.R. campaign lately to show that they really, could not be guilty of the charges laid against them in the case. This has included renting one (that would 1), apartment below market to a formerly homeless family, making donations to San Francisco AIDS charities, and donating a box of coats to the homeless.

In other news, since the original suit was filed back in April, the City and County of San Francisco has filed suit (San Francisco Superior Court case no. CGC-06-455241). The CCSF case essentially boils down to a charge that CitiApartments, in its various forms, has been engaged in eviction for profit (using evictions to cause evictions to raise the rents on the rental units), violating the San Francisco Residential Rent and Stablization Ordinance, imposing utility shutoffs (that would be an allegation that the landlord would cut off water and/or electricity) and generally harassing the tenants unreasonably.

This boils down to 2 counts of public nuisance per se and a count of 17200 (aka Unfair Business Practices). Citiapartments has yet to respond to the 2nd Amended Complaint.

In the case brought by the tenants, CitiApartments has answered, and of course has denied everything. Looking at the docket sheet, it looks like a mediation was scheduled but then either occurred and failed or was cancelled. There was also a discovery fight that resulted in an order compelling further responses to interrogatories from CitiApartments. Not unusual in case, but not exactly surprising.

All in all, the case appears to be moving along. It currently has a trial date of June 4, 2007.

$430,000.00 And Counting

You would think that a property management company would know better. Apparently USA Properties Fund, Inc., and USA Multifamily Management, Inc. operate a residential building in Concord. Someone there thought that it was a good idea to remove the old asbestos ceilings from the units.

Not a problem, until you discover that the property managment companies decided to use uncertified laborers to do the job. The Bay Area Air Quality Managment District discovered this and fined the companies involved to the tune of $430,000.00, setting a new crecord.

Start the clock. In 15 years, everyone who worked on that job will file a claim for some sort of asbestos exposure related illness (from pleural plaques to mesothelioma). For which it is unlikely the property management companies will have insurance to cover, since most insurance carriers stopped providing coverage for asbestos injuries.

And, as the cherry on the top for the asbestos mills (both plaintiff and defense), the company that did the job, Synergy Environmental (aka Synergy Enterprises, Inc.), performed some 200 or more of these jobs.

Asbestos, the gift that keeps on giving.

Could someone read what I suggested?

Probably not. This article came out earlier this week, I just have been busy and have not gotten around to writing about it.

Anyways, the San Francisco Board of Supervisors apparently did a little rethinking about how it would seek to penalize people for clearing buildings through evictions prior to enter the condominium conversion lottery process. The legislation that passed differed from the original bill.

First, it did not make the law retroactive to 1999. Instead, the law covers only those buildings wehre two evictions have occurred since May 1, 2005, or where evictions of protected tennants (basically those who are over 60 and/or have disabilities and meet certain other criteria) have occurred since May 1, 2005.

Second, if there have been more than two evictions of non-protected class tenants, the building is barred from the lottery for ten years.

A little harsher, but close to what I proposed back in April. Could someone associated with the Board of Supervisors be listening to me?

Now, I am going back to reality where they most certainly are not.

CitiApartments

Here in San Francisco, one of the largest owners of apartment buildings is outfit that goes by various names, though all appear to be owned by the same entity: Skyline Realty. Working as a tenant's attorney for the past couple of years, I've heard them associated with some unsavory practices when it comes to evictions. However, it appears that today, Skyline finally pushed their tenants too far.

According to this story in the San Francisco Chronicle, Skyline Realty, its subsidiary CitiApartments, and one of its employees has been sued by 23 of its tenants alleging that Skyline uses intimidation, including armed men, to force tenants to give up their leases. The suit alleges that when Skyline, which is alleged to be merely an alter ego of the Lembi family, buys a new building it conducts sweeps to eliminate tenants that do not fit its "profile".

If it turns out to be true, this will be a huge case. If you want to read the complaint, it is here on the San Francisco Superior Court's website (or go to sftc.org and look for case CGC-06-451694).

Treble damages for unlawful evictions are a good thing.

I Cannot Believe I Am Saying This

I am a renter. I am also an attorney who does a fair bit of work (most of it pro bono) for people in danger of being evicted. So, when I hear a new anti-eviction measure is in the works, my ears prick up.

For what I'm about to write, I am probably going to get pounded on by the other tenant's rights lawyers and tenants' activists.

That said, apparently the Board of Supervisors in the city has decided to try and kill three birds with one stone. The three birds being: the decreasing quantity of affordable rental housing in the city, the rate of condo conversions and the surge of evictions to create the right climate for condo conversions.

In case you don't know, here in San Francisco, in order for a building to go condo, it must be go through lottery process. Many would be conversions languish there for years as they wait for their number to get called. I'm not going to go into the process, but while its not permanent purgatory it can seem like that to the people who are on the list for the second and third times.

Anyways, apparently under the proposed new law if a building has a history of two or more evictions, then it is barred from the condo conversion lottery. Apparently, the wording of the proposed ordinance covers any buildings going back as far as 1999. Potentially, this means that a building that has changed hands, and is otherwise legitimately ready to enter the lottery, could be barred from the lottery because of the actions of a prior owner.

To my mind, this seems a little too draconian. The objective is good: prevent people from being evicted solely to clear the way for condo conversion. The problem is there are probably a number of building owners, especially in the two and three unit buildings in the avenues where there has been an eviction prior to the sale of the building. Once the new owners get around to converting, they are going to find a nasty little surprise for something that they did not do. Yes, they would benefit from it, but I'm not sure that this is an equitable solution.

On the other hand, two strike rule might be cutting the baby. However, in reading the proposed ordinance, I find it interesting that they do not mention unlawful evictions. Why only penalize what may be good faith evictions (say the tenant has refused to pay rent, or better, the tenant has burned down part of the unit)? I would think that if the landlord had committed an unlawful eviction or a forcible detainer, then they should get a ban from the condominium lottery.

Then there is another thing that this proposed law could run afoul of, namely takings issues. I am not an expert on this, but I predict someone, if this was to be signed by the Mayor, would challenge it on those grounds.

I think something is needed to slow the condo conversions in the city that are powered by evictions to clear the buildings. However, I do not think that this law goes far enough. The law I would like to see would include: penalties for unlawful evictions and forcible detainers; no entry into the lottery for five years if there is a history of evictions for good cause for five years; and no entry to the lottery for ten years if the evictions were of a protected person (in San Francisco that means some one over 60 who has resided in the unit for ten years, or is disabled and living in the unit for ten years or more or catastrophically ill and living in the unit for 10 years).

Not that the Board of Supervisors or Mayor Newsome is going to listen to me. But that is my idea. Everyone gets something.