4 ms·
My guess is that the owners were well aware of the situation when they purchased the property. The owners stated that they were warned by "pretty much everyone
by pyoung 13y ago
My guess is that the owners were well aware of the situation when they purchased the property. The owners stated that they were warned by "pretty much everyone" not to purchase the property, and the fact that the property came with someone living in it should be a pretty big red flag. For those that have been around SF long enough, it's easy enough to recognize when someone is playing the 'sf housing regulatory lottery'. The basic gist of the game is as follows:
Step 1 - Buy a property that is impacted by certain regulatory constraints (which depresses it's market value heavily).
Step 2 - If you are cheap, sit, wait, and pray that natural forces relive you of the regulatory burden (or make life a living hell for your existing tenant in an attempt to get them to move out). If you have some money, actively spend it to rid your property of regulatory constraints.
Step 3 - Once unburdened (or partially relived) of said constraints, sell the property and profit handsomely.
This game is primarily played with rent controlled units and TICs. The owners in question bought property on the cheap, evicted an old disabled lady who is now homeless, and made bank. Sure, the lady was a piece of work herself, but let's not pretend these owners were saints, they knew what the endgame was all along.
- jack-r-abbit 13y agoI don't think the owners are saints... but they get way more sympathy than that rotten tenant. We don't know what they thought the end game would be. It sounds like to me that they were willing to keep the tenant but then started to see she was a nightmare. I have no doubt they knew the unit was illegal. But once it got to the point that they were required to take action to do something to fix the situation... they were promptly met with incompatible laws that would not allow them to do what they were ordered to do. Also... $500 a month is not really "bank" in the context of this $1.4M house that was purchased by two families (that lived in it for 10 years). And they gave her over 2 years worth of rent back in a relocation settlement.
- pyoung 13y agoThey could have insisted that the original seller fix the violation/evict the tenant before the sale of the unit. This of course would mean a much higher sales price (or no sale), so they didn't. They could have reported the illegal unit to the DBI at anytime in the 10 years that they lived there. Instead they waited until they were basically ready to move out and sell the property. They were probably hoping that the tenant would eventually move out on her own so that they could either re-rent the unit for a much higher price, or bring the unit up to code and re-sell it. They didn't let her live there for 10 years because they were being nice, they did it because they were hoping to avoid the messy and expensive legal issues that they eventually had to deal with. Regardless they walked away with ~$770K from the appreciation of their property, so not sure why they deserve any sympathy. As far as investments go, they hit a home run.