By on August 9, 2017

presidio-terrace-malin-giddings

This is one of those stories that is bound to provoke a range of emotions. It involves a homeowners’ association, rich and powerful property owners, real-estate speculators and parking. None of those first three are likely to engender sympathy but in this case you sort of have to root for the little guys, the speculators.

San Francisco has some of the most expensive real estate in the United States. Pacific Heights is one of the more exclusive neighborhoods in San Fran and Presidio Terrace, a gated, guarded, private street is one of the priciest locations in that area. It’s across the street from the private Presidio Golf & Concordia Club. Former Speaker of the U.S. House of Representatives Nancy Pelosi used to live on the circular street, as has Sen. Diane Feinstein. When one of the 35 mansions on Presidio Terrace go on the market, they fetch big money. There’s a house currently listed for $14.9 million dollars.

One would think that folks with that kind of money would stay on top of financial matters, but due to the homeowners’ association failing to pay $14 a year in property taxes for about three decades, the private road and other common areas on Presidio Terrace came up for sale at a tax auction a couple of years ago. Tina Lam and Michael Cheng of San Jose were looking over an online listing of parcels and saw an “odd property in a great location.” Sight-unseen they bid $90,000 for the land, outbidding 73 other potential buyers. They now own Presidio Terrace, the street, cul de sacs, easements, sidewalks and the traffic islands filled with palm trees and other plants.

presidio-terrace

Earlier this year, a representative of Lam and Cheng, who works as an engineer in Silicon Valley, contacted homeowners to see if they were interested in buying the street. Apparently that offer was rebuffed and now Lam and Cheng are looking at other ways to recoup their investment, including charging rent or condo fees for the 120 parking spaces on the street.

I don’t know about you, but there is something absolutely delicious about people who live in a gated community complaining about having to pay to park in front of their homes. The idea that they might have to put up with people who don’t live in their gated community renting parking spaces (in parking-scarce SF) there brings out the Al Czervik in me.

Since they are powerful, the homeowners’ association has petitioned the city’s tax office board of supervisors for a hearing, seeking to rescind the tax sale, claiming that the city sent the tax bills to the wrong address of their former accounting firm and failed to notify homeowners of the impending tax sale. Since they are rich, the homeowners have also filed suit against Lam and Cheng, alleging that they deliberately didn’t contact the HOA for two years, just to make it harder to rescind the tax sale. For their part, the city of San Francisco puts the onus on the HOA.

There are 181 private streets in San Francisco. “Ninety-nine percent of property owners in San Francisco know what they need to do, and they pay their taxes on time — and they keep their mailing address up to date,” a spokesperson for the city’s treasurer and tax collector told the San Francisco Chronicle. “There is nothing that our office can do [about the sale],” she added. She also said that as far as she knew the San Francisco Board of Supervisors “has never done a hearing of rescission.”

“As legal owners of this property, we have a lot of options,” Cheng said, adding that nothing has been decided yet. I have an idea. The street is adjacent to Congregation Emanu-El, a reform synagogue, and the high holidays are approaching, the busiest time of the year for Jewish congregations. Perhaps Lam and Cheng can contract to provide valet or overflow parking for the temple for their holiday religious services.

Ironically, Cheng is ethnically Han Chinese, an immigrant from Taiwan. He and Lam may own Presidio Terrace but for the first half of the 20th century, he wouldn’t have been able to have purchased a home there. Before the U.S. Supreme Court ruled such covenants to be unlawful in 1948, the Presidio Terrace Association “restricted” the sale of homes and Asians weren’t allowed.

Image Sources: Malin Goodings Real Estate, Google Maps

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103 Comments on “Couple Buys Exclusive San Francisco Street, Rich Residents Sue to Avoid Paying Rent to Park...”


  • avatar
    Arthur Dailey

    As the ‘owners’ of the street, would they also not be responsible for its upkeep, including paving, cleaning, maintaining curbs and if was in the snow region plowing? And would they also not be responsible for enforcing road ‘rules’ and safety and possibly liable for any damages that may occur from any of the above? How would you go about getting ‘road owner’ insurance?

    And since they ‘own’ it, could they not also charge a ‘toll’ for using it?

    • 0 avatar
      FreedMike

      The mind boggles.

    • 0 avatar
      Scoutdude

      As a private street yes the owners are responsible for maintaining it in all ways IF and only IF they want to. The city couldn’t force them to do those items unless it was a code enforcement issue for something like actually storing garbage.

      I’d say the new owners could remove the pavement and turn it into a gravel road if they so desired. I think that is what I’d do, get a permit to remove the road surface and replace it with an eco friendly gravel road. Then post that as required with an expected construction time of 2 years. Seems to me that would get the HOA to do a special assessment and pony up pretty quickly.

      • 0 avatar
        DenverMike

        The HOA remains responsible (to the home owners) for its maintenance/upkeep.

        It’s a bad investment for the couple. They got greedy and basically bought a parking lot the can’t put a structure on, can’t live on, and unless they’re looking to get into the “daily parking” business, it’s losing proposition.

        Even then, most of the home owners don’t need to park on the street.

        The investing couple can’t block access to home owners coming or going, so a “toll road” won’t happen.

        But if the HOA doesn’t buy it, who will? Ripping/tearing up the street/sidewalk/landscaping will only diminish what little value it has.

        Clearly they bought the property to “flip” thinking the HOA would pay a 1/2 million or whatever to reclaim it. I don’t think the HOA has to, or needs to.

        In the meantime, the couple is stuck paying property tax and insurance on land that’s basically useless to them.

        • 0 avatar
          nemosdad

          I believe you are incorrect. The HOA will now have to charge more money to service the private residency. This is due to the fact that any price put onto having service done using the road will have to be factored.

          Should the new owners wish to charge a service vehicle an enormous sum per visit to private residence they have the legal right to do so.
          If it’s too much, they (street owners) can be taken to court. Good luck with that.

          This is a brilliant investment that one way or another is going to make them millions.

          • 0 avatar
            DenverMike

            I highly doubt they bought the property to police the use of it, and get into all kinds of lawsuits. But I’m positive they were stunned the HOA wasn’t interested in “buying”.

            I’ve seen “investors” do greedy things like this at tax lien sales, and lose their shirts. Two doors down from me, the property behind my neighbor was bought by “investors” at auction when the neighbor failed to pay the property taxes on the back half of his divided acreage. Oops he thought it was all one property, not two. The original seller didn’t file some documents.

            But when the “investors” contacted my neighbor, they were also stunned when he said “Keep It!” Now all they have a “landlocked” piece of property they can’t use, can’t even access since my neighbor won’t give them an easement to get on the parcel. Nobody will. Nicely played by my neighbor!

            Of course the investors still have to pay property tax on it and insurance. At this point, I’m sure they’d be willing to sell it for a single dollar, same as the investors in this story.

        • 0 avatar
          golden2husky

          Well, they could prohibit trespassing on their property…where would all those high end cars go? And how do you walk to your house? I think they could set up their own version of ezpass. Frankly I loathe gated living arrangements. Calling them a community is a misunderstanding of what the word means. Some of my friends live in these horrid arrangements. When I went to visit one friend recently, the guard – who was notified of my arrival and plate number, came out of the shack with a wand and without my permission, scanned the bar code on the registration. I ripped the guard to shreds about invading my privacy. Now the owner of that security company has data on me that they are not entitled to. After the gate opened I asked if the cameras were running and she responded yes. I dropped the clutch and spun off about a thousand miles of rubber.

          As for high holy day parking, I thought that operation of cars and equipment was prohibited…my mom always made comments about “Cafeteria Catholics”…so I guess Cafeteria Judaism is also in fashion. I remember seeing those “sabbath day switches” in elevators…since the elevator operates in “wild car” mode you don’t have to push any buttons. You just board and eventually you land on the desired floor. Talk about making up a loophole to avoid following the intent of the requirement. A pure cop out. I’d get it if only elderly folks used it but everybody does. Judging from the girth of some of them they ought to consider using the stairs.

          • 0 avatar
            nemosdad

            Golden, I’m not sure what you’re arguing for or against. Its always been private property.

            If it was me I’d just ask for 20 million to buy the road back. They tried that (don’t know how much they asked, 20 million seems fair), didn’t work.

            The combined net worth or these people must be huge. Stop being cheap and pony up.

        • 0 avatar
          Big Al from Oz

          DenverMike,
          You are totally incorrect regarding the upkeep and who is responsible.

          My mother lives in a community in South Jersey on the shore and the community has monthly meetings to determine how much money is levied against the individual property owners to pay for such things.

          They had an issue regarding ploughing (plowing) snow in the winter when needed. There was a vote and the ploughing did not occur.

          Also, garbage collection etc is also a community decision. The City removes the garbage, but all the properties are charged a fee by the city.

          These people only have ownership of the house and land they bought as the rest of the estate is not public property it is private and they all own a piece (share) in the maintenance of the property.

          So, if the people in the estate don’t pay the money to maintain the areas used by all including roads, gardens, etc the government, whether Town/City, County, State or Federal has every right to sell off the property to pay for the outstanding taxes, no different to when you don’t pay your taxes for your property.

          For, rich people, they showed little knowledge for the maintenance of their lives. I’m surprised the land owner’s committee didn’t address this issue a while ago as they would of had decades of warning.

          Do, these rich people expect others’ to pay for their existence?

          To me it seems they played a hand of poker thinking the City would give in to their demands.

          I would like to hear the true rollout of events.

          • 0 avatar
            DenverMike

            The home owners don’t contract directly with street/easement “upkeep” related contractors. The HOA does this, regardless of who “owns” the street.

            Home owners are only “responsible” to the extent of cutting a check to the HOA. That’s part of why they’re there.

          • 0 avatar
            Big Al from Oz

            DenverMike,
            They do.

            They have an elected board to represent the community.

            This board are responsible in enacting what the community wants after it’s put to a vote.

            So, somewhere, somehow they decided not to pay the taxes. That is the community.

            So, those who had bought after the fact would of known any outstanding monies owing to whatever authority, contractor or business.

            It is as if these guys were shafted.

            Like my mother they vote for certain actions and inactions.

            The community as a whole fncked up. This is no different to a country that votes for a non performing sociopath.

          • 0 avatar
            DenverMike

            @BAFO – You’re still wrong. No one on any board or community “…decided to not pay the taxes”.

            It was clearly an “oversight”, since you obviously didn’t bother reading the story.

            Yes we know what an HOA is, obviously you don’t. Contractors involved in the street/easement “upkeep” get checks from the HOA, not directly from individual home owners .

            Clearly you’re into arguing semantics, when you’re wrong, so I won’t go there.

          • 0 avatar
            Big Al from Oz

            DenverMike,
            When a person has no argument such as yourself you use words like “semantics” because you are wrong.

            These people who bought obviously required a lawyer to check out what is owing prior to them buying.

            They would of known. So, they by not acting on their debts have brought this against themselves.

            You can’t just say it’s the government’s fault or the government is screwing the community.

            I not pro-government, but they live in a private community. That means they must take some of the responsibility over for what government does.

            As I have stated they can’t really use the excuse the “bill” was sent to the incorrect address. As people who bought into the private estate would of had lawyers check out what is what.

          • 0 avatar
            Big Al from Oz

            DenverMike,
            Where my mother lives a committee is voted in and they represent the interests of the community.

            Nothing can move forward unless there is a democratic vote.

            The community had a private garbage collector and the community paid a monthly fee to the committee to cover the contractor they voted in favour of.

            This is no different to when they voted not to have the snow plough. If they voted for the snow plough monies would of been collected to cover the cost of the ploughing.

            I do think you have little or no knowledge of this.

            Please, read up and/or talk to some who live in these communities.

            They live in these communities for reasons of security, lower land taxes, etc.

            I don’t believe they can really complain when they are caught out, even if the City or whatever government agency does have a degree of accountability.

            As I mentioned, those who bought into the community would of had knowledge of the impending land tax issue.

            What I would expect is the government agency (City) to show empathy and give the community time to pay down the debt, even interest free.

            But, obviously I would assume that the community stuck their thumb up their nose and stated we will not pay. So, the land was sold.

            Remember, all who live in the estate owned the land as shareholders. It is not public property.

            Please read up.

          • 0 avatar
            DenverMike

            @BAFO – Why do you continue arguing on a subject you obviously know nothing about? And why do you still refuse to read the TTAC article you’re commenting on???

            You’re not reading my comments either since I said nothing about or implied “…it’s the government’s fault.”

            Is it a “reading comprehension” thing with you??

            Where are you getting “…the community stuck their thumb up their nose, and stated we will not pay.”???

            It’s as if you’re talking about a different story…

            The HOA needed to secure payment of the tax, didn’t receive the tax bills, or warning letters, and simply failed to keep up on the tax.

            Lawyers going over HOA contracts for the home buyers can look into who’s responsible for paying the property tax on the easement, but they wouldn’t check to see if taxes are “current”. Home owners can rest assured all taxes that fall in the hands of the HOA will be paid and on time.

            The tax assessor is a county office, not city, but they don’t go around knocking on doors of delinquent home owners/HOAs. They only send threatening letters (notification) to “given” addresses. It’s not their fault the letters never arrived on location.

            Trash collection, snow plowing have nothing to do with this. Why do you keep bring them up??

            I’m done here, figure it out for yourself. Reading is fundamental.

          • 0 avatar
            thelaine

            I still don’t get it Al. Can you explain it again?

    • 0 avatar
      MrIcky

      “They now own Presidio Terrace, the street, cul de sacs, easements, sidewalks and the traffic islands filled with palm trees and other plants.” – which adjoining landowner will be the first to stage a trip and fall, sue, and force a cheap sale as settlement?

      • 0 avatar
        Big Al from Oz

        MrIcky,
        It’s not that easy to sue. The people who live there must also take reasonable caution and personal account for their actions and inactions.

        When assessing a risk, you must look at all means available to eliminate or mitigate risk. So, how much different are the roads, etc. Do the road rules within the estate abide by local rules?

        So, if the roads and gardens are maintained, then the onus is on those who frequent these areas to be responsible.

  • avatar
    JimC2

    Go west, life’s more peaceful there…

  • avatar
    gasser

    If this property were in a slum neighborhood, the press wouldn’t give a damn. It was the HOA’s problem to deal with. They lost the property, they have to redeem it or rent it

  • avatar

    The editorializing in the second and final two paragraphs drag down the quality of this news article no end.

    • 0 avatar
      FreedMike

      Good point. Did someone verify this guy’s ethnicity? He could well be a white Jewish guy who happened to be adopted by a Chinese family.

      • 0 avatar

        Mr. Cheng is from Taiwan, his wife is from Hong Kong. From their photographs they appear to be Chinese. As to their religion, who knows?
        There are Jews of just about every ethnicity (though the majority are of Middle Eastern descent). Regarding covenental restrictions on real estate, from one of the linked articles:

        ““I’m a first-generation immigrant, and the first time I came to San Francisco I fell in love with the city,” said Lam, an engineer in Silicon Valley who was born in Hong Kong and came to the U.S. for college.

        “I really just wanted to own something in San Francisco because of my affinity for the city,” Lam said.

        There’s a bit of irony in the couple’s purchase. Until a 1948 U.S. Supreme Court ruling banning the enforcement of racial covenants, homes in Presidio Terrace could be purchased only by whites.

        “The more we dug into this,” said the Taiwan-born Cheng, “the more interesting it got.””

        • 0 avatar
          FreedMike

          Probably a safe assumption, Ronnie…but the first thing they taught me in journalism school was to assume nothing and prove everything.

          “Born in Hong Kong” and “emigrated from Taiwan” doesn’t establish someone’s race.

          Just sayin’.

          • 0 avatar

            I never went to journalism school, photos can be misleading, and for all that I know, they may self-identify as Scandinavians, but in the photographs they look Asian, specifically Chinese.

        • 0 avatar
          thelaine

          What would ethnic Chinese people be doing in Taiwan? The Norwegian-Taiwanese Anti-Defamation League is in an uproar about your assumptions, which are SO TYPICAL of the fascist Western Anglo hegemonic patriarchy.

    • 0 avatar

      The 2nd paragraph is nothing but factual material, no editorializing at all.

      The last two paragraphs are also mostly taken from the news stories. I did notice the temple on the corner next to the street and with Rosh HaShana just a few weeks away, and with traffic control being a genuine concern near Conservative and Reform synagogues on the high holidays it seemed like an opportunity to riff on parking. To be honest, when I saw the temple on the satellite image, I was hoping it was an orthodox synagogue as that would make the “parking on Rosh HaShana” thing funny.

    • 0 avatar
      bikegoesbaa

      Both the second and the final paragraphs appear to be entirely factual.

      What in them do you regard as “editorializing”?

  • avatar
    tylanner

    The HOA needs to fire their administration staff and then pay a fair price for the land/road.

    We live in a crazy world but you just can’t mess with land ownership.

  • avatar
    jmo

    Just keep in mind this is a real problem.

    “But tax debts as small as $400 can cause people to lose their homes because of arcane laws and misinformation among consumers, says John Rao, the report’s author and an attorney with NCLC.”

    http://www.nydailynews.com/news/national/elderly-losing-homes-400-back-taxes-article-1.1111362

    It seems in many cases you have elderly people with memory issues who forget to pay and end up out in the street. There is also a similar problem with elderly folks forgetting to pay their homeowners insurance and having a fire and finding out they aren’t insured.

    • 0 avatar
      FreedMike

      This is why you always do a tax/HOI escrow for your mortgage unless you’re loaded.

      • 0 avatar
        jmo

        Right, people get tripped up when they no longer have a mortgage.

        • 0 avatar
          FreedMike

          I’m aware of that.

          Just sayin’…if you have a mortgage, do an escrow acct.

          But also…taxing authorities are required to give notice before a tax sale, and if you forget to pay your insurance bill (which we’ve all probably forgotten to do from time to time), they’ll send you a cancellation notice.

          • 0 avatar
            chuckrs

            “Taxing authorities are required to give notice…” The HOA may be set up to pay taxes, insurance and maintain the commons as well as keeping the riff-raff out. In that case, the authorities needed to go no further than the HOA. Where was the HOA board?
            The HOA where I live has one purpose – insuring, maintaining and paying taxes on a 12 acre commons. I was on the first board with a few other like minded individuals and we made sure that became the sole purpose. HOAs are dangerous; we did our best to defang ours – and we keep an eye on current status too.

      • 0 avatar
        kkt

        And even if you are loaded it saves time and trouble and is a safeguard against screwups.

      • 0 avatar
        bienville

        Apparently I’m loaded by internet standards. You couldn’t pay me to have an escrow account

        • 0 avatar
          golden2husky

          Me neither. When the tax bill comes twice a year I write a check. Not a lot of fun to see so many thousands of dollars go away but it is what it is.

        • 0 avatar
          sgeffe

          Most unpleasant getting a notice stating “your payment’s going up $400/month!”

          Since I work for a county IS department, and whose primary responsibility is as an Application Systems Analyst for (real estate) Tax Accounting, I know the rules, so I said “fvck that noise!”

          Refied a couple times, no escrow — I know enough to triple-check when taxes are due, and write a check! (Never heard of escrow for HOA fees, either!) Put 20% down, so that helped! (No PITI party for me! ;-) )

  • avatar
    jeoff

    I don’t understand finding joy in someone getting foreclosed on due to what amounts to a clerical error.

  • avatar
    PandaBear

    30 years?

    I’m sure it is not because the people in the HOA is powerful (DiFi?) and think they can get away with it.

  • avatar
    thelaine

    Rich people have quite enough problems without having to contend with marauding Taiwanese immigrant engineers coming to this country and buying their streets out from under them.

    • 0 avatar
      87 Morgan

      COTD…golf claps.

    • 0 avatar
      Big Al from Oz

      thelaine,
      I support the buying of the roads. Geez I wish I could of bought the road! You can make some real profit.

      The people who live there either buy out these people or put up with fees, etc.

      The homeowners did not pay their dues and lost a privilege. Just because you have some dosh gives you not additional entitlements.

      As you always state you get nothing for nothing and it doesn’t matter who owns the road or what nation they are from.

      So, what happened to the homeowners when they bought their properties? Why did the lawyers not identify this issue? I do know in Australia when we buy land or property we use lawyers for conveyancing.

      Australia owns tolls roads in the US and charge US citizens to drive on them. The US owns other forms of public infrastructure in other countries as well. This is no different.

      If you don’t pay your taxes the government will eventually get some or all back.

      • 0 avatar
        thelaine

        The homeowners will just wait until the road buyers demonstrate their property rights through some action, such as charging for access or parking. Then they will sue. They will bleed the buyers financially until the buyers surrender. Rich people build walls to keep immigrants, engineers, Australians, transients, and other dirty people out of their neighborhoods. Do not think you can fk with them.

        • 0 avatar
          Big Al from Oz

          Or the road owner will deny access.

          Now that will put the issue to a head.

          Remember these property owners did not fulfill their legal obligations.

          The guy only spent a tuppence buy the road etc.

          He can also make their lives hell, just as easy.

          I don’t support the landowners at all in this case, I own properties and I would never buy into any private deal like this or have anything to do with what we call strata title.

          The problem is you will have half who don’t want to pay for the upkeep of the road and half who do.

          As I mentioned my mother lives in a similar situation. She rants that the setup she lives under requires her to pay a lot less in land tax, but complains about the snow plough.

          It was funny, because a couple of times she was snowed in and no snow plough came and she was stuck for several days.

          The community she lives in also has a age limit. Anyone under 50 can’t live there, even rent. I asked her about all the old people and what if an ambulance is required and you are snowed in and her comments was “I will not need one”.

          So, these people deserve what is coming. They obviously made decisions, but poor ones at that and are paying the price for their greed.

          The property is private, not public. They bought into it for whatever reasons, like paying less taxes.

          • 0 avatar
            thelaine

            I wonder how many of them drive Teslas I helped pay for? Glad to serve, guys. Hope you get your streets back. Let me know if you need anything else.

          • 0 avatar
            FreedMike

            I guarantee you they pay for the roads you drive on…and the airports you fly in and out of…and the schools your kids attend…and the military…and on and on…

            …and the Tesla tax rebates as well…

            That’s the way it works here in the glorious US of A.

          • 0 avatar
            thelaine

            Agreed. The least I can do is pay for their electric sports cars, seeing as they pay for the military and all. Outstanding insight. Cannot wait for them to pay for my healthcare. Gonna have to buy them a trip to Hawaii. It’s the circle of life, and the money tree just keeps on giving, and all debt is forgiven, and people work happily for the commons, and the wise rule wisely.

          • 0 avatar
            Big Al from Oz

            FreedMike,
            So?

            What you omitted is the fact it is PRIVATE property.

            So, look at it this way. You go down to the local McDonalds and use their sh!tter. Does the government pay for the maintenance of the sh!tter. It is and can be used by all.

            Because everyone can use the McDonalds sh!tter does McDonalds expect not to pay taxes because they have a PRIVATE sh!tter open for public access?

          • 0 avatar
            Big Al from Oz

            thelaine,
            The road can’t be used by the public, it is PRIVATE. So, they should pay whatever it costs to maintain that infrastructure, not other taxpayers.

            I thought you believed in a user pays system?

            So, I do believe if they want the city to pay, then they must not be a gated community and all have access to the roads and gardens and they pay the full amount of land tax.

            But, they bought there for the reason it is a private community. Then you pay for that privilege.

          • 0 avatar
            thelaine

            I don’t get it Al. Why do Australians go to McDonalds to poop?

          • 0 avatar
            JimC2

            thelaine wrote: “I don’t get it Al. Why do Australians go to McDonalds to poop?”

            Maybe the direction the toilets swirl when they flush?

          • 0 avatar
            thelaine

            TRUE! That is why I only poop at the American embassy when I am in the land down under.

          • 0 avatar
            brenschluss

            During the Great Australian Toilet Crisis of 2017, toilet rationing made McDonalds the only option for many average Australians.

            The fact that toilets are also used for posting internet comments there made this an extraordinary hardship.

          • 0 avatar
            thelaine

            I heard rumors of the 2017 GATC, but I never knew how bad it had really gotten. I’m sure glad there was an American multinational corporation on hand to save our dear friends. It reminds me of the Battle of the Coral Sea. Nasty bit of work. First that, now this. We seem to be lurching from one crisis to the next.

            I hope Bindy and Sue are OK.

          • 0 avatar
            Big Al from Oz

            Hey guys, I do like the sh!tter shortage comment!

            The reality is it seems people, including yourselves who are complaining are just complaining because you guys are just anti government. I’ve read most of your comments for years and anything the government does you are against.

            Like I stated the community would of had an idea money was owing. Yes, the government/city should of tried harder. But, if for some unknown reason your insurance policy advice is not mailed and you know you need to re-insure a property or vehicle you will go out and insure it. You don’t just keep on driving or whatever and blame the insurance company if you have an accident and are not insured.

            This is how I view this issue and the city would of given a fair way to pay down the debt. Even if the landholders within the estate paid a couple hundred dollars a year for a few years.

            I don’t think this should be so one sided.

          • 0 avatar
            thelaine

            I just cannot get past “would of” Al. I can only assume it is because you went to a sh!tty government school.

            Oops, there I go again.

  • avatar
    Kendahl

    HOAs, especially in California, love to screw over home owners for trivial, technical rules violations. This time, it’s the HOA getting screwed, due to their own error, and they don’t like it. They might have an excuse to go after their former accounting firm which should have forwarded mail even after the HOA was no longer a client. Lam and Cheng came across a good deal and jumped on it. I would like to know what their asking price was for the street. Given that they have owned it for two years, twice what they paid sounds fair especially in that area.

    • 0 avatar
      thelaine

      I was thinking exactly the same thing. Let’s say a nice round 200k.

      They will probably just wait till he starts using the property and sue him instead, just out of spite. Bleed him until he capitulates.

    • 0 avatar
      danio3834

      It seems pretty straight forward to me as well. It would seem that the HOA doesn’t feel that the rules, no matter how trivial, apply to them. The owner’s seem willing to sell, accept the mistake, pay up, move on. The cost of litigation would mount quickly in a matter it would seem they would lose anyway.

      • 0 avatar
        S2k Chris

        I don’t have a problem blaming the HOA in this situation, but I’ve seen too many articles taunting the homeowners (for being rich?) Sorry, if I’m a homeowner, I’m only worried about paying my bills. I’m not keeping track of whether or not the HOA is paying theirs, as long as I’m paying my HOA bill. I assume they are, or if they are not, I can hold them accountable in some way. I don’t think any of these homeowners deserve any grief over this situation unless they were on the HOA board and therefore share negligence.

    • 0 avatar
      la834

      I moved a few years back and refused to consider any house that was in a neighborhood ruled by an HOA. It’s my house, I put up aquamarine curtains if I feel like it.

      • 0 avatar
        Scoutdude

        It all depends on the HOA I was against them for many years but before I bought my house I did a slow drive through the entire neighborhood and made sure I would be able to be myself w/o issues from them. Yeah it was a pain to get the re-roof materials selected but the majority of the board is quite reasonable. One guy, honest to god has a turn of the century steam powered locomotive. Apparently he had it in a city park for many years but they finally kicked him out so he laid a pair of rails and brought it home. I never asked how that was accomplished but based on the position cranes were certainly involved.

        • 0 avatar
          golden2husky

          You really don’t need HOAs if you live in good, affluent areas. We have private streets that are marked as such but no stupid gates and guards. You do have to pay the “road association fee” but the limit of their reach is the road itself. No restrictions on types of vehicles you own, your mailbox, color of your home, etc. When the properties start at 850K for the small homes derelict cars and purple painted houses don’t happen.

          • 0 avatar
            Dan

            “When the properties start at 850K for the small homes derelict cars and purple painted houses don’t happen.”

            The cars on blocks go away, the 10 hours a day of Manuel labor weed whacking and leaf blowing every last blade of errant grass starts.

            HOA or not, neighbors suck.

    • 0 avatar
      Big Al from Oz

      Kendahl,
      I don’t view this as trivial.

      Who has been paying for the upkeep of the road? I would assume the property owners. So, then why did they not pay the tax on the land?

      I own properties and if I don’t pay my taxes I will lose them, but like this road issue it takes years for this to occur. So, they had plenty of time to resolve this issue.

  • avatar
    jkross22

    I’m not understanding the problem. Property taxes weren’t paid. The city auctioned the land and the highest bidder won.

    Seems like it’s a bunch of whining. Maybe I’m just not getting it.

    • 0 avatar
      Garrett

      It is just a bunch of whining.

      The taxes would be in the budget. If you compare budget to actual, you would see that no taxes are being paid.

      Basically, the board and whatever management company the use screwed up. They were offered the opportunity to buy, but didn’t want to.

      I say, make ’em squeal.

  • avatar
    jpolicke

    There’s got to be at least one homeowner on that block who’s a lawyer or has one on retainer, that can whip up a lawsuit because the homeowner or their child/spouse tripped and fell on an imperfection in Lam & Ching’s road. Make it for about $20 million; we’ll settle for the deed to the road. Sure they can fight it, but a tough opponent will bankrupt them with legal fees.

  • avatar
    Big Al from Oz

    What some appear to be forgetting is this is a PRIVATE property. So, who supports the infrastructure in large industrial complexes?

    Many industrial complexes have outside businesses operating within and these businesses pay for the right to be or use the property. This includes taxes.

    Look at a shopping mall. There is a management structure to administer the store owners. This group of people would of had some form of administrative structure in place to manage the site and they blew it.

    These administrators are the ones who should cough up any money or be sued, not the owner of the road and gardens.

    I do believe these people should pay the price for how they chose to live. They wanted the additional security, so they live in a “protected” environment.

    The origin of the owners have nothing to do with the issue.

    This will hopefully teach people a lesson about becoming involved in private land deals.

  • avatar
    Robert.Walter

    I call b.s. on the tone of the article.

    Gave up reading halfway through but by that time didn’t see any mention of fact city kept mailing the tax bill to an obsolete address for 30 years. That’s just bureaucratic stupidity.

    The fact that these folks are mega rich is mega irrelevant. If this happened to you or I or a friend of ours we would decry the situation and call it injustice.

    I hate rich tax cheats with a passion (and the rise of an American Oligarch Class) but this is not the case here. If the city can send a guy out to do a property assessment, they can also make reasonable efforts to look into a situation, for every last tax payer, when things fall seriously into arrears. The goal should be timely cure of such problems and to transfer property or to try to make money off of it (90k$ income for a 420$ bill? Come on!)

  • avatar
    Robert.Walter

    I call horse hockey on the tone of the article.

    Gave up reading halfway through but by that time didn’t see any mention of fact city kept mailing the tax bill to an obsolete address for 30 years. That’s just bureaucratic stupidity.

    The fact that these folks are mega rich is mega irrelevant. If this happened to you or I or a friend of ours we would decry the situation and call it injustice.

    I hate rich tax cheats with a passion (and the rise of an American Oligarch Class) but this is not the case here. If the city can send a guy out to do a property assessment, they can also make reasonable efforts to look into a situation, for every last tax payer, when things fall seriously into arrears. The goal should be timely cure of such problems and to transfer property or to try to make money off of it (90k$ income for a 420$ bill? Come on!)

    • 0 avatar
      thelaine

      It is truly shocking to find a government agency that is full of lazy, corrupt, insensitive, incompetent and greedy bureaucrats. We should demand an investigation by another government agency.

    • 0 avatar
      Big Al from Oz

      Robert,
      I would believe the city would of given the land owners a good deal of time to pay down the debt.

      The reality is they would of had lawyers and documents stating their repsonsibilities when they bought their property.

      Some would of known about this well in advance.

      I do not just blame the city. As all or even some would of known of this impending tax issue.

      When I buy properties one of the first things I do is assess what is owing and how much I need to payout.

      I even use property managers to manage my properties as I’m not an SME in property management. Just like I pay a lawyer when investing into property.

  • avatar
    rudiger

    I’d like to know who the other bidders were and if they had a reason for not bidding higher. I mean, there were multiple bidders and you have to believe that at least some of them had an inkling that there would be issues with trying to make a big score dealing with 35 very wealthy San Franciscan mansion owners.

    As others have speculated, I see the new street owners in for a protracted, bitter, and expensive battle that, in the end, is going to cost them a lot more than it’s worth.

    Likewise, I can see the new street owners as having made some outrageous offer, too. If they had been asking, say, $350k (which comes out to $10k per resident, which would seem like a pittance to these people), it would have been accepted.

  • avatar
    Shortest Circuit

    I have no sympathy for either side.

  • avatar

    Too funny.

    in my area, we have a large river on one side of the Village. Waterfront homes are very rare, due to the railroad and history. Someone saw a parcel go up for sale, next to a condo development, bid on it at bankruptcy court, and won it. It was zoned commercial for a restaurant that never got built. They asked for a down-zone to residental, and built a house there. it is one of the few private homes on the river.

    The house has sat for two years with no buyer….so even though a brilliant play, all legal, and unique, they still haven’t made any money, meanwhile, taxes are very high, there are construction costs, and upkeep.

    This might be the same thing. The problem here is that they took on folks who can afford to pay for litigation, which will probably be cheaper than a buy out. The “investors” have effectively bought themselves a lawsuit.

    HOA don’t really exist in the northeast…the concept scares me. I like my neighbors, but they are about 100 feet away on all sides and the last thing I want are for them to tall me anything about my house or yard…..in NY the co-0p board is our variant…where the crazy neighbors and petty tyrants go….no thank you.

  • avatar
    Sam Hall

    This hits a bit close to home. Couple years ago, it came to light that our HOA had failed to pay its corporate registration fee to the state for several years. Without getting into the weeds, our accountant and attorney were supposed to have a process for making sure the fee was paid each year. Instead they had a process where, once it slipped the first time, they automatically forgot about it and never checked on it again.

    Luckily, there were no tax ramifications, and it didn’t cause any of the HOA’s property to go up for auction. But we did have to re-charter the corporation and transfer the accounts, not to mention several thousand in attorney fees to make sure everything was done properly.

  • avatar
    arach

    The easiest way to make money, while being totally ethical, would be to divert the road so instead of having 4 alcoves, it made a weird 4 pointed shape. Then where the island and old road were, build 4 small houses. Sell these said houses for a small amount, say $750,000.

    you will in effect:

    1. get a 2,100% ROI on your investment, which is unheard of anywhere.
    2. Ethically frustrate the home owners by allowing “riff raff” to move in.
    3. Create value in the city of san francisco and more housing where there is a shortage
    4. Not actually cause any harm or damage to anyone

    • 0 avatar
      MBella

      That would be awesome. I bet they would figure out a way to block that however. They could probably use some city ordinance or rule from the inept HOA to block that.

  • avatar
    thelaine

    The lawyers will rip off your arms and legs before you move a cubic inch of dirt.

  • avatar
    JimC2

    “Would HAVE” or “would’VE,” please. “Would of” is not a thing. Now call up one of your old schoolteachers and apologize for using improper language.

    • 0 avatar
      Detroit-Iron

      Oh my freaking g-d. After I read your comment I did a “find on this page” and lost several IQ points that I desperately need. I think Big Al From Oz is confirming the rumor that Ozzies drink their weight in beer.

  • avatar
    Ralahamy

    It would be delicious irony if Tina Lam and Michael Cheng declare Presidio Terrace as a Sanctuary Terrace and unload some illegal immigrants on Nancy Pelosi’s and Diane Feinstein’s door steps to see how tolerant they would be of diversity.

  • avatar
    CarPerson

    wow!

    About 85 of the 90 posts should stick to the topic of cars…

    When the property was developed, the developer had the choice of deeding the street and associated property to the city or county or to the HOA. As it was gated, the HOA was the only option. Reading this carefully, it was deeded to the HOA but the accountants failed to forward the documentation to the Association, resulting the the HOA failing to account for the taxes and upkeep.

    The lawyers have indeed sued the proper entities.

    The City has only 181 properties to check to see the handoff from the developer to the HOA occurred properly. (TIP: If it did not, the taxes were not being paid.) Too big of a task for the City? Be glad you are not the one having to argue that in court.

    Expect to see the City of San Francisco buying off the buyers and deeding it to the HOA. And checking the handoff when off smoothly…

    • 0 avatar
      Sam Hall

      California being California, maybe it really is the city’s responsibility to hand-hold private entities and make sure they pay their taxes on time–but I doubt it. There is the basic principle that “ignorance is no excuse” for breaking the law. It’s ultimately your responsibility to know the laws and comply.

      On a different note, while this is a cool story at first glance, as I think about it more I can’t see what motivation the Lams could have had for buying the street at auction, other than to gouge the HOA when they sold it back to them. That might be legal, but it’s a dick move on the same level as patent trolling.

      • 0 avatar
        rudiger

        Well, whatever the motivation, like I mentioned before, it’s curious how the buyers were able to scarf up a piece of property for such a low price within the city limits of what has to be among the highest priced housing markets within the US, beating out other, lesser bids. Maybe those losing bidders were substantially more savvy, understood much more clearly the legal quagmire they would be getting into if they won the auction, and bid accordingly.

        The old adage of ‘Too Good To Be True’ may be applicable here.

        • 0 avatar
          Sam Hall

          It amazes me that the price went as high as it did. It’s a street, with no buildable land attached to it. The opening bid at auction was just enough to cover the delinquent taxes. It’s inside a gate and has driveways almost literally every ten feet, so the idea of charging for parking seems dubious to me. I just don’t see what they can have planned to do with it except extort the HOA.

          • 0 avatar
            rudiger

            Well, the story goes that the Lams bought the property, site unseen, so their version must be they had no idea what it was and just saw an unusually cheap real estate opportunity in San Francisco. They, evidently, were hopeful they had lucked into something they could develop and potentially live. Sounds hopelessly naive but who knows?

            Then, once they found out what it really was, decided they would go the route of trying to make a huge killing by, as others have put it, extorting the HOA to get their street back. Unfortunately, I would imagine that those 35 residents weren’t having any sort of ham-fisted blackmail attempt if that’s what happened.

            Now, it’s turned into a battle with the HOA/residents, and I can’t imagine the Lams being on the winning side. If they try pulling any of the shenanigans of outrageously priced services to recoup their investment, or doing the opposite of not maintaining the street to call the HOA’s bluff, well, I just can’t see them prevailing in either scenario.

            OTOH, the HOA doesn’t exactly sound like the sharpest group, either. Maybe the Lams made them a reasonable offer once they realized the situation but the HOA thinks they’ve got a much better (cheaper) way of prevailing through the courts.

  • avatar
    PandaBear

    They don’t need to do anything. All they need to do is either make the whole street no parking 247 or make them metered parking. The damage to the property value there would be enough for the HOA to buy it off with a reasonable profit.

    Seriously, in a mutually assured destruction lawsuit, those with the money (and property) loses. Those residents would be far better off just suck it up and pay $200k (or 300k) than to have their property tank 100k each x 35.

  • avatar
    CarPerson

    Another outcome is the court blocks the buyers from doing anything that interferes with the residents use of the street equal to what they currently have, which includes driving and parking on the street anywhere in the development. The Buyers would still own it but would likely walk away from the property and not pay taxes, losing $90K in their gamble.

    If the buyers walked and HOA started paying the taxes, after a few years (seven?) the HOA could sue and get the title changed to the HOA. Current buyers would be SOL.

    My guess is the buyers, now owning the street, may have been thinking about going house-to-house to offer access/easement rights to their now land-locked property for $50K or so. Title insurance would very likely cover it so what’s to lose?

    (The City could unwind the deal, pay the buyers back their $90K, and give the residents title in exchange for the back taxes. However, Cities are loathe to give back money. Judges are loathe to make Cities give back money.)

  • avatar
    probert

    A feel good story for troubled times. I hope they screw with them endlessly.


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