SAN FRANCISCO (CN) - Three sisters use "appalling" tactics to "terrorize" their tenants into vacating rent-controlled apartments, San Francisco's city attorney claims in court.
City Attorney Dennis Herrera asked a Superior Court judge to stop what he calls the "bullying" tactics of Anne Kihagi and her sisters Julia Mwangi and Christine Mwangi.
The sisters, and the four limited liability companies they formed, bought multi-unit residential buildings with numerous tenants who could not be legally evicted from their rent-controlled units, Herrera says in the June 4 lawsuit.
The buildings sold for less than they would without rent-controlled tenants. To replace those tenants with higher-paying ones, Herrera says, the sisters used heavy-handed methods "to upset, terrorize and ultimately displace as many below-market-rent-paying tenants as possible."
"The victims of defendants' relentless campaign include a public school teacher, a cabinet maker, a professional skydiver, and at least six elderly and disabled tenants," the city attorney says in the complaint.
"Harassment, retaliation, intimidation, fraud, abuse, false accusations, reduction of services, refusal to timely and properly perform repairs, bullying, invasion of privacy, and willful destruction of the tenants' guarantee of quiet enjoyment" are the defendant's favored methods, according to the lawsuit.
In a statement, Herrera called the tactics "appalling," and said they "distinguish their predatory business model as one of the most ruthless in recent memory."
Rent in San Francisco is among the highest in the country. Herrera cited recent reports that the median rent in San Francisco has reached $4,225 per month.
Herrera claims that Kihagi has lied about her identity as the owner to snoop on tenants when she visits a new purchase. He says she imposes new house rules, uses employees to spy on tenants, and if tenants refuse her buyout offers they are harassed and bullied.
Kihagi and crew also interrupt mail and utility service, refuse to cash rent checks, claiming the rent was paid late, and fail to provide required notice before entering apartments, Herrera says.
And, he says, Kihagi has evicted tenants on the premise that she or her sisters will move into the unit, but they never do.
Anne Kihagi's eviction attorney Karen Uchiyama told Courthouse news her client "has been targeted by bad tenants." She said tenants being evicted for breaching rental contracts have "raised the issue to the level of a frenzy."
"Because Kihagi enforces the rules, they gang up and harass her," Uchiyama said.
"These tenants abuse rent control laws, and if they are caught, they claim they are victims of harassment," she said, adding: "Our rent-countrol laws are highly protective of good tenants."
She called Herrera's suit a political move that would fail in court.
San Francisco's rent-control laws were established in 1979 in response to what Herrera calls a "critical housing shortage."
The laws, which cover approximately 172,000 residential units, cap annual rent increases and limit evictions.
Herrera says they were enacted to provide "decent, safe, and sanitary housing at affordable rent levels."
"Because of skyrocketing rents in today's white-hot real estate market, San Francisco residents who lose their rent-controlled apartments have few options but to move out of the city they call home," he says in the complaint.
He calls Kihagi a "prolific professional real estate investor and landlord in the San Francisco and Los Angeles markets."
Kihagi and crew have spent more that $24 million to buy nine multi-unit residential rental properties, with more than 50 rent-controlled residential units, he says.
According to the 38-page complaint, their business model involves unlawful evictions, quick remodeling jobs without permits and then raising rents.
But Kihagi and her crew are "impatient to wait for typical tenant attrition or vacancy," Herrera says, and "upon acquiring title, unfairly and unlawfully use a number of heavy-handed techniques designed to upset, terrorize and ultimately displace as many below-market-rent-paying tenants as possible."
When a 71-year-old disabled tenant complained about needed repairs, Herrera claims, Kihagi told her: "F**k off ... for the peanuts you pay me I'm not going to do anything." (Asterisks and ellipsis in complaint.)
Holdouts in one building included an elderly couple and the wife's 91-year-old bedridden mother, whose rent was far below market due to a 40-year tenancy.
"Kihagi began a scorched-earth campaign to harass and bully them out of the unit," Herrera says.
Kihagi tried to demolish the unit, but the tenants successfully challenged the plan, only to have Kihagi make unsubstantiated claims of nuisance and lease violations, he says.
Several tenants allowed city inspectors to look at their units, despite the presence of Kihagi and "two physically imposing security guards," he says, and the next day Kihagi installed video surveillance cameras directly outside their units, and then cameras to record their front and back doors.
Kihagi also told a tenant to "stop being so pathetic," and said she was "watching [her] on the surveillance cameras." (Brackets in complaint.)
Herrera seeks general and punitive damages for violations of the San Francisco rental laws.
He says the sisters and their companies pose a public nuisance for maintaining and operating substandard buildings, and for construction work that exceeds the scope of city permits and that was performed by unlicensed workers.
He also accuses them of failing to respond to city notices of violation, so they should pay for inspection, investigation and enforcement costs, along with attorney fees.
He says they should be denied state tax deductions for the properties in violation.
He says that the harassment, illegal evictions, illegal remodeling and providing false information to the city and the courts in order to take possession of rent-controlled units all constitute unfair business practices.
Karen Uchiyama, who is Anne Kihagi's eviction attorney, said her client "has been targeted by bad tenants" who have breached rental contracts, are being evicted, and have "raised the issue to the level of a frenzy."
"Because Kihagi enforces the rules, they gang up and harass her," she said. "These tenants abuse rent-control laws, and if they are caught, they claim they are victims of harassment."
"Our rent-countrol laws are highly protective of good tenants," she added, calling Herrera's suit a political move and predicting that a jury would find his claims meritless.
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