The current environment in San Francisco is like another dot.com boom for tenant attorneys and their lucky clients, who are are filing cases by the hundreds knowing that, because the landlords cannot pay them, the insurance companies will foot the massive bill. Attorneys are openly bragging about how easy it has become to extract money from insurance companies in these cases and the millions they’ve made. One attorney said he doesn’t even need to believe the tenants’ cases, as there’s too much money on the table.
Some San Francisco judges,assist these cases, ruling against owners so that the tenant cases can continue on to trial. Sadly, there’s widespread anti-landlord bias in the city. Judge Angela Bradstreet, for example, was undeniably anti-landlord in City of San Francisco v. Kihagi, where she awarded penalties for tenants who did not even testify, tenants who should not have had a spotlight, and tenants who were rightly terminated – all to punish local black landlord Anne Kihagi.
This is happening to many landlords in San Francisco. Tenants can sue for literally anything – any delay in making a repair even when the tenant does not give notice and reasonable time to cure, problems making rent turn into opportunities to go on the offensive before being evicted, landlords’ knowledge of their illegally profitable subleasing – anything is fair game.In one example, a tenant claimed that he felt concerned as Ms. Kihagi’s unit faced his unit and she could see right into his kitchen. Despite the fact that he had blinds, he alleged a claim for interference with his quiet enjoyment. It did not matter that the building was constructed with the two kitchens facing each other, nor that Ms. Kihagi had in fact provided blinds. You have to ask yourself, does this even rise to an issue of interference? Yet, the case wound its way through the docket.
Another sad example, an elderly owner got sued by tenant who had defaulted on his rent. The tenant claimed he had mice infestation and that the unit was illegal, though in perfect, remodeled condition. The aggressive attorney forced the elderly family into near heart-attack and in the end the family turned to their insurance carrier to help settle the case. Sadly, the insurance company did not settle with the tenant’s girlfriend, who claimed to have moved-in without the landlord’s consent, and claimed herself a tenant.
Can you believe that the same attorney turned around and sued the same elderly owner – and attempted to extract six figure settlement from insurance on behalf of the girlfriend? How can this attorney not have felt ethically and morally sick taking advantage of this elderly landlord?
This is how crazy San Francisco has become. The judges know what’s going on and they see the same attorneys, yet they allow them to continue, even when the cases should be tossed out.
It’s sad enough that most landlords in San Francisco can barely survive. This new wave of litigation is making it even harder to operate in San Francisco, and insurance companies are taking note. In fact, many are refusing to write policies in San Francisco, as highly publicized cases – even if ludicrous and groundless – are resulting in hundreds of thousands, charged to insurance companies. Between this and the risk-prone age of San Francisco buildings, this leaves a limited pool of insurers that will even consider writing policies.
The other impact of all this expensive litigation? San Francisco values will be forced down. No lender will consider a building where you can’t get insurance. Then there will be nothing but the bare-bones California Fair Plan, which will not be acceptable for many lenders. Conversely, a shrinking pool of insurers will undoubtedly raise the insurance rates for these buildings.
The natural consequence of all this will be a drop in value to factor in the litigation risk – this is no different than the discounts offered in countries with high political risk. San Francisco is becoming exactly that – a city where everything is high-risk, high-profile, and high-stress.
Can anyone see where this is all going?
It’s time for San Francisco to wake up. These greedy attorneys and their clients, and the judges that are allowing these cases to run wild, will cost San Francisco a lot of landlords, destroy its property values, and topple its housing economy.
For more information on Anna Kihagi & West 18th Properties, @annekihagi1http://annekihagisf.com/
