"It's never been a good time to
move into a CitiApartments building, but now is the worst time" says Ted
Gullicksen, director of the San Francisco Tenants Union. After years of allegations of tenant harassment, poor
maintenance, and all around bad business practices, (see links to the SFBG's
series on this here) the troubled
and massively foreclosed upon property management
company is now accused of refusing to refund security deposits.
Gullicksen says the Tenants Union
has been getting "3 or 4 complaints a week" on this issue. Citing CitiApartments' alleged practice of "buying
buildings, then using harassment and coersion to buy tenants out then
reoffering the apartments at an inflated rate," he says that many
CitiApartments tenants are very recent tenants who, at the time of lease
signing, didn't have any plans to move -- but given the current state of the
economy, have had to, and are now suffering under CitiApartments' retention of
their deposits.
Another former CitiApartments tenant
to whom we spoke says:
I moved in October of 2005 and moved out April 16, 2009. I have left several
voice mail messages over the past 2 months (4 I believe) for the person who is
supposed to be in charge of the security deposits. Every time I called they
sent me to her and I got her voice mail.
Last week I pretended that I still lived there and left a
message in regards to my current apartment and asked them to call back. (This
time) they actually called me back and told me she had all of my information
and that my deposit was being held along with many other tenants. I asked when
it would be released, she said hopefully in the next day or so. I said this was
illegal and she said she knew and that I could take them to court if I
wanted...She made it sound like I wasn't alone, and that they knew they owed me
money, just couldn't pay me right now.
As of this writing, he has still not
received his deposit, nor heard anything else from CitiApartments.
So, if your deposit is being held
illegally, what recourse do you have? According to Gullicksen, "after 21
days" of the end of your lease period, you "need to take then to
court. You'll probably win in court, but keep in mind it'll take several hours
of your life."
We asked Gullicksen if he was
advising against going to court, then, as he didn't sound so sold on it.
He responded "You need to weigh the pros and cons. It'll be some time, and
some hassle and then you might win, but collecting would be another
matter." When pressed on this, he said "Normally it is not difficult,
you just put a lien on the property, but since there are so
many, already, you might not be able to collect*."
One former CitiApartments tenant
took things all the way to CitiApartment's general counsel, Ed Singer, who:
told me multiple times that they are "broke", that my old building is
now also under a foreclosure action that they're trying to negotiate, and that
they "don't have enough money to pay everyone's security deposit."
(who did not respond
to our request for comment) offered this former tenant a settlement, saying the
former tenant "could take the offer or sue." The former tenant noted
to us that "it really sounds like they are going bankrupt, and they can't
even cover their security deposits, and have clearly been comingling them with
their other assets."
Noting the aforementioned issues
associated with collecting from such a financially challenged company,
Gullicksen says "if they're offering a partial offer, consider a
settlement. But push for as much as possible: Ninety percent might be worth it
-- 50% is unacceptable."
In addition to the allegations of
harassment, poor maintenance, and other counts too numerous to mention, the
concern that CitiApartments' assets is "comingling" was a big enough
deal that City Attorney Dennis Herrera's office has taken notice. According to
Gullicksen, this alleged intermingling of rental income and deposit money, as
well as use of security deposits for operating expenses, is one of the
components of Herrera's August 16, 2006 suit filed against
CitiApartments, its associate, Skyline Realty, "and a complex web of
subsidiary limited liability companies for an egregious pattern of illegal
business practices."
According to Deputy City Attorney
Jennifer Choi, the 2006 complaint has already been amended 3 times, but if they
get enough calls on the deposit issue, this, too, might be added to the suit.
You can help add ammunition to the suit by calling their hotline at
415-554-3977 with your CitiApartments complaints.
"We only become aware of this
(CitiApartments' alleged pattern of failure to return deposits) recently, but
it's not in the lawsuit at the moment. If we determine that this is prevalent,
if this is an actual business practice of theirs, across all their properties
and for all tenants, it can be added."
"The city is actively
litigating this matter, and it is very important to us." Choi said.
However, with a case that was launched nearly three years ago and is still in
the discovery phase (that is, the part of the case where they pull together all
the documents), tenants are kind of on their own for now. Especially since
security deposits are legally considered "a private cause of action,"
meaning that former tenants have to find their own way to get them back.
According to Gullicksen,
CitiApartments has been foreclosed on to such a level that they're in the
process of losing about 100 buildings. However, their alleged practice of
removing long time tenants has left them with a high vacancy rate, and,
consequently, they're "scrambling for tenants." In fact, a look at
craigslist's SF rental listings at 2:30 on Thursday the 2nd shows 69 listings from the company.
While craigslist's terms of use declares that "all
postings...are the sole responsibility of the person from whom such Content
originated." Pretty standard TOU stuff -- but their section 7 (Conduct)
states "You agree not to post...Content that is unlawful, harmful,
threatening, abusive..." (It goes on like this for a while) and says
(we're at 19-d, now) "If you post Content in violation of the TOU...you
agree to pay craigslist one hundred dollars ($100)."
We emailed craigslist CEO Jim
Buckmaster, wondering if CitiApartments' craigslist advertisements requesting
security deposits that they seem to know will not be returned would constitute
a violation of their TOU, but have not received a response.
You know -- and we're certainly
not advocating this, just, you know, pointing it out -- if a person really
wanted to push back against whatever it is that CitiApartments is doing, they
could pretty easily twist the knife a bit on craigslist simply by flagging
every single CitiApartments listing. (Someone we know just tried this, and says
it's very fun.) Then keep an eye on them, and let us know
if the listings remain on the site.
In addition, please do send us your
Citiapartments stories, good or bad. We want to stay on this, we
want to keep the agencies involved accountable, and we want to keep our readers
informed.
*Section 1950.5 of the California
Civil Code states that repayment of security deposits takes priority over all
other creditors, but if another deposit-seeker's gotten there before you, you
might be out of luck.
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