Villas' Bonus Bucks Could Prove Costly
Rent Board Rules Rebates in Violation
February 22, 2007 7:26 PM
Bonus bucks might have saved the Villas residents thousands of dollars in the past, but now they might cost the housing complex a pretty penny.
The San Francisco Residential Board ruled that the Villas Parkmerced violated the city’s rent control laws with its use of coupons, called bonus bucks, and declared it unlawful for them to continue using the rebate system. The class action suit, filed in San Francisco’s Superior Court, is attempting to restore monetary losses on the behalf of previous tenants and is still in progress.
Prior to the Residential Board ruling in October, Dave Wasserman, defense for the Villas Parkmerced, expressed that the bonus bucks did not violate rent laws. After the ruling, Wasserman and the board made an agreement that the plaintiffs in the case would not be required to pay any further rent that the bonus bucks originally covered.
The two plaintiffs who head the case received monthly coupons worth $350 with a one-year lease. Their $1,675 monthly rent reduced to $1,325 throughout the year. However, the bonus bucks were not offered upon renewal and allegedly increased the cost of rent by $350. The Residential Board only allows a 1 to 2 percent yearly rent increase.
The use of bonus bucks by the Villas Parkmerced “exceeds the maximum increase of rent allowed by law,” according to the plaintiffs filing the suit.
The Villas Parkmerced no longer offers the bonus bucks or any other rebate system to new tenants, and the rent prices vary from home to home.
Brayton Purcell, the company representing the past and present tenants, is still trying to identify everybody the suit might affect.
“We’re pushing as hard as we can but these things move agonizingly slow from the point of view of tenants,” said Peter Fredman of Brayton Purcell.
The suit picks up new tenants almost every day. However, Fredman said the Parkmerced lawyers slowed the case down.
“The defense will try and slow things down,” he said. “If you’re going to have to pay money they’d rather pay it later rather than sooner.”
Wasserman could not be reached for an update on the suit by press time.
Justin Stambaugh, 22, lived in the Villas Parkmerced for three years and received bonus bucks the entire time he was a resident. He moved, partially because of the rent increase, when the Villas no longer offered the coupons.
“I refused to pay that much to live there,” said Stambaugh, a hospitality management major and senior at SF State.
Stambaugh and other residents said they were unsure the lawsuit applied to them.
The lawsuit, currently in its discovery stage, is scheduled to be heard within the next two years and was presented in front of a judge twice.
No monetary compensation will be granted to either party until the San Francisco Superior Court identifies the bonus bucks as an illegal rent increase or a legal renters incentive.
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