December 14, 2009
The Mayor’s Attempted Eviction Legislation One-Two Punch (Or Jab)
While Mayor Newsom prepares to veto Supervisor Avalos' sponsored "just cause" extension legislation which was passed by San Francisco’s Board of Supervisors last week, on Tuesday he will introduce a bit of eviction legislation of his own (9:16 in the above).
In the address, titled "Mayor Newsom's YouTube Update," the mayor said he would introduce alternative legislation Tuesday that would protect tenants living in nonrent-controlled units from evictions if their home is foreclosed upon by a lender.
The legislation will protect tenants from the "predatory nature of banks" and "other circumstances" related to "macroeconomic challenges," Newsom said.
Seizing the asset that secured a nonperforming loan is "predatory" behavior? Who knew.
And depending upon how it’s written, keep an eye on Craigslist for way below market rate (WBMR) rentals with long-term leases for cash up front should it pass...
UPDATE: While we actually considered featuring the bank owned sale of 3730 Fillmore when it first hit the market, we didn’t. Purchased for $500,000 in September of 1999 the property was taken back by the bank this June with a first mortgage of $1,099,079 owed.
Two weeks ago the 1,722 square foot two-bedroom condo returned to the market asking $925,000. And yes, it’s already in contract. So why do we mention it now?
As a plugged-in reader adds:
i'm surprised [SocketSite] didn't pick up on 3730 Fillmore street, a rare foreclosed condo in the marina that just went into contract at a very reasonable price. sold for under $1M, the previous owner had racked up (i think) about $1.6M in loans from those "predatory" banks. and the poor victim? none other than [the Mayor’s] cousin.
∙ Just Cause Eviction Extension Approved, But With Four Key No Votes [SocketSite]
BeCause Eviction Vote Scheduled For Tomorrow [SocketSite]
∙ Newsom plans foreclosure eviction bill [Examiner]
First Published: December 14, 2009 9:45 AM
Comments from "Plugged In" Readers
Can a municipality really do this? Or will this end up in the courts and be thrown out? Who would the tenants write their checks to?
Posted by: astonished at December 14, 2009 9:57 AM
cool. a new way for smart r.e. investors to buy rental properties at a discount, invoke the Ellis act, and profit at the expense of tenants. isn't that what would happen?
Posted by: resp at December 14, 2009 10:14 AM
I'm assuming the tenants would just stop paying rent. Note to self: Find a unit in some stage of foreclosure, live there free for a year, strip unit of all appliances and copper wiring and skip town when the banks finally figure out how to navigate just cause eviction. Even if a new buyer tried to Ellis me, I'd just extort, I mean, sue then for 100k and settle for like 25.
Posted by: sleepiguy at December 14, 2009 10:25 AM
State law will trump Newsom's law because they will be on the exact same issue. The state law is that a foreclosure voids the lease and tenants have to move after 60 days. So Newsom can pass all the laws he wants, they won't have any effect.
A federal law requires 90 days notice for an eviction, and so although the California law voids the lease, the Federal law would trump the state law.
The federal law also requires the lease to be honored to the end of its term, as long as it wasn't a sweetheart deal, and I suspect any cash up front deal would be suspect, as would any lease longer than one year. However, the Federal law gives a purchaser who intends to occupy the right to provide a 90 day notice even if the lease is for a longer period. So you have two laws that would trump anything Newsom wants to pass.
Had the supervisors not gotten a veto, the laws would have overlapped, but not been directly conflicting, so the conflict may have been less clear cut. However, I doubt the supervisor's law would have survived a challenge.
Obviously, anyone going through an eviction should talk to a lawyer and not rely on anything said here.
As for resp's comment, I'm not sure where the discount would come from as an OMI is not hard for a condo owner who wants to move in, and has a shorter expiration period.
Posted by: tipster at December 14, 2009 10:39 AM
i figure there would be a new discount on post-1979 muliunit buildings in foreclosure as buyers would be scared off by Mistermayor's new threat at preventing evictions.
btw, i'm surprised SS didn't pick up on 3730 Fillmore street, a rare foreclosed condo in the marina that just went into contract at a very reasonable price. sold for under $1M, the previous owner had racked up (i think) about $1.6M in loans from those "predatory" banks. and the poor victim? none other than Gavin's cousin.
Posted by: resp at December 14, 2009 11:18 AM
he's an idiot. this is insane. san francisco isnt exactly a place that everyone can afford to buy a house. if you cant make your payments anymore you shouldnt own the property. it is as simple as that.
Posted by: art at December 14, 2009 11:48 AM
That's not what this is about, art art.
I don't agree with the city trying to get involved tho. This will get trumped by the state and it'll all be a waste of money and time.
Maybe if the supervisors stopped acting like mayors, and the mayor stopped acting like a governor, the city would work better.
Posted by: anonn at December 14, 2009 12:08 PM
I don't understand the logic behing just cause evictions for units not under rent control. If the law is passed, all the landlord needs to do raise the rent some rediculous level, and the tenant will more than likely leave then.
So, then people will be crying for rent control on ALL properties!
Where does it end?
Posted by: Anony at December 14, 2009 12:24 PM
btw, i'm surprised SS didn't pick up on 3730 Fillmore street, a rare foreclosed condo in the marina that just went into contract at a very reasonable price.
I've been following that gem for a while. resp, I think it may finally have its moment in the sun.... Applecart, applecart?! Maybe an enterprising reporter can ask the mayor if his relative was exploited by a predatory lender....
Posted by: EBGuy at December 14, 2009 12:32 PM
3730 Fillmore is a fixer
Posted by: anonn at December 14, 2009 1:16 PM
RE: Mayor's cousin. A case of the rich getting richer. That may be the easiest $1 million dollars made without having to work for it that I've ever seen. Wow. The banks get fleeced, and now we plebians have to bail them out. We lose. Scoundrels profit.
Posted by: Scoundrels at December 14, 2009 1:22 PM
I can't complain. At least newsome is gonna veto the stupidvisors Bill. I think he's playing smart politics by acting all tough on 'predatory lenders', even though his idea won't stand a chance in hell in appeals court. But he gets to send a rubber bisquit to the idiot housing activists who just got their asses stiffed. Nice.
Posted by: 45yo hipster at December 14, 2009 4:49 PM
> RE: Mayor's cousin. A case of the rich
> getting richer. That may be the easiest
> $1 million dollars made without having
> to work for it.
Back in the mid 80's Walt Lembi (who lived about a ¼ mile from my parents) bought a Ferrari Testarossa. In the late 90’s a guy I knew who worked for Walt (at Homeowners Finance) told me that Walt sold the Testarossa for $45K (as a Sports Car Market subscriber and big auction guy I almost never forget a car price) to “Gavin Newsom’s cousin” (I think it was Brendan)…
Posted by: FormerAptBroker at December 14, 2009 8:35 PM