Villas Parkmerced Tenants Sue Landlord
October 7, 2006 12:24 AM
Tenants of one of San Francisco's largest apartment complexes filed a class-action lawsuit against their landlord, accusing them of illegal rent increases Wednesday.
The tenants claim that coupons issued by the Villas Parkmerced to new tenants are a scam to contract around San Francisco’s rent control laws that only permit a one to two percent rent increase per year.
The lawsuit, which is seeking more plaintiffs from the 3,456 units near SF State which the Villas Parkmerced owns, claims that tenants signed a one-year lease for $1,675 a month and received 12 “bonus bucks” coupons for $350 each month of their lease. After the coupon deductions were made each tenant paid $1,325 per month.
At the end of their lease the rent was raised to $1,703, a 28.5 percent increase. Under rent control, a landlord charging $1,325 per month would have only been able to raise an existing tenant's rent by $22.52, a 1.7 percent increase, according to Peter Fredman, an attorney with Brayton Purcell.
The lease contracts in question clearly stated the "bonus bucks" coupons were revocable at anytime and the San Francisco Rent Board did not define the offer as a "scam," Villas Parkmerced attorney Dave Wasserman said.
"The intent was to fairly compete in a very competitive market for good tenants. The "bonus bucks" coupons were not a permanent feature of the lease," said Wasserman with Wasserman-Taxman.
The Villas are no strangers to the stringent rent control ordinances in the city, are under close scrutiny of the Rent Board, and therefore would not risk defrauding tenants, Wasserman said.
Stellar Management, a New York real estate group bought the complex, one of San Francisco's oldest and largest, just over a year ago.
Wasserman suggested that an upcoming rent board decision will determine any future litigation, including the class-action lawsuit.
Fredman said the class-action lawsuit has 16 cases, two of which were already settled in favor of the plaintiffs.
“If this scheme is legal than rent control is over in San Francisco,” Fredman said.
The San Francisco Rent Board will hear the matter at 25 Van Ness Ave. on Oct. 17 at 6 p. m.
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