Purchased Private Street - In San Francisco

[Deleted member 130081]

I think this little morsel is being buried by whoever it is who can bury these sorts of things. Articles like this were everywhere a few days ago, now I had to go 4 pages in on a specific Google search to find one. Considering the neighborhood was previously occupied by none other than Diane Feinstein and Nancy Pelosi, this makes an interesting story. The jist of it is, that the neighborhood HOA banned all non-whites from buying property until 1948 (only after the supreme court got involved), with the original intent to keep out Asians. Some families have lived there for generations, and are the "good" neighbors our "fair and balanced" leaders lived next to. Of course that is no crime and of course you are not a racist just because your neighbor is, but it is interesting none-the-less, especially when Diane Feinstein wrote a letter to the board on behalf of the HOA to get the vote to swing their way - lol.

http://www.sanjoseinside.com/2017/0...up-private-street-in-swanky-s-f-neighborhood/

As far as what is right or wrong, it does appear there was legal power to reverse the sale and it also appears the legal power included a vote, so it could have gone either way as well.

My personal opinion is that if in fact a legal power exists to allow a buy-back in a case of back taxes that were unpaid due to an error, rather than the inability to pay, then the sale ought to be reversed - I would have voted to reverse it. In another article however, and I am still trying to dig up that one too (they all mysteriously have disappeared since a day or two ago), it appears that the street has been sold from under the HOA in the past for non-payment of taxes as well. They reacquired the street back then too, but it does make you wonder how a HOA could allow this to happen twice? For that reason, I could understand why some of the board voted against the repurchase.

I know many people think the buyers purchased fair and square and they did, however tax sales have their own rules surrounding them, not unlike a traditional foreclosure, where in some areas the previous owners still have rights to get the property back after the sale. Therefore, I do not believe any damages should be awarded the new buyers. Just think about the circumstance here, a private street worth thousands of dollars had unpaid back taxes amounting to less than $1000, where the homes on the street were worth millions - this is obviously not a case where the owners could not afford to pay and the new buyers ought to have anticipated that.

I do want to see the racist thing blow up in the senators face though. The fact that a neighborhood like this even existed ever, and that senators chose to live there, is a story all on its own to me - especially senators who claim to be the party for minorities - lol.

 

[Elliott]

"Homeowners who spoke at the hearing said they didn’t receive a single letter or phone call, nor was a sign posted on the property to alert them of the sale. Cisneros said his office had posted notices on its website and in the San Francisco Examiner, and sent one via certified mail to the former accountant’s address before selling the street.Supervisor Mark Farrell, whose district includes the street, noted that other cities require tax collectors to go to great lengths to find the owners of delinquent properties. He chided Cisneros for not doing more to reach the Presidio Terrace Homeowners Association after his letter to the accountant was returned. Farrell made the motion to rescind the sale.

“As a matter of policy, I am proud of my ... colleagues who voted against allowing these speculators to get away with purchasing a neighborhood street and attempting to extort San Francisco residents that I represent into a quick $1 million payday,” Farrell said in a statement after the vote. “I am shocked that four of my colleagues sided with these out-of-town speculators.” Those four supervisors were Jane Kim, Aaron Peskin, Hillary Ronen and Norman Yee.

“I believe the vote today to rescind this sale was the best possible outcome,” Farrell said. “The speculators get their money back — no harm, no foul. The back taxes the Presidio Terrace owners owe will be paid immediately. And, we are moving to implement policy reforms (to) the current broken process that allowed this sale to happen in the first place, so that this situation does not happen to any San Franciscan ever again.”But Emblidge said several other jurisdictions in California have reversed tax sales. Sixteen were undone in Los Angeles, he said. One was annulled in Alameda County, and one in Contra Costa County."

http://www.sfgate.com/politics/article/SF-supervisors-to-vote-on-returning-private-12389377.php

I don't know how CA does things, but in OR I don't run into non-public streets in a subdivision being taxed.

 

[Mark K]

The investors who are the rightful owners of the street should definitely sue the city as they are owed compensation in the amount of the fair market value of the street due to this government taking of their rightfully owned private property.

So what do you think is the fair market value of a street where you, as the new owner, has no more right to use it than the adjacent property owners? You CAN'T stop them from using it in the same fashion that they have over the past many years, as much as some like to think the new owners could charge for the use, tolls, parking, and other such nonsense.

The only sticky part is how to maintain it if the new owners refuse. The property owners can't maintain something that they don't own; the new owner isn't going to spend any money on it.

That's exactly what happened here and why I ended up as one of three court appointed appraisers when the city finally stepped in and condemned and took over a road in a commercial/retail area. The absentee owner had purchased a private street at a tax sale and wouldn't maintain it and the town got tired of the complaints so they used eminent domain, condemned the road, and repaved it. The appraisal reflected the depreciated cost of the street minus 98% discount because the new owner had no more right to the road than anyone else that chose to drive on it. The appraisal fees far exceeded the award to the owner.

 

[Michigan CG]

.............I am proud of my ... colleagues who voted against allowing these speculators to get away with purchasing a neighborhood street and attempting to extort San Francisco residents that I represent into a quick $1 million payday,” Farrell said in a statement after the vote. “I am shocked that four of my colleagues sided with these out-of-town speculators.” Those four supervisors were Jane Kim, Aaron Peskin, Hillary Ronen and Norman Yee.

“I believe the vote today to rescind this sale was the best possible outcome,” Farrell said. “The speculators get their money back — no harm, no foul.......

Farrell is an idiot. He is insulting people who did everything right according to law. And there is harm and foul; the buyers spent time and effort buying the property, they should be compensated.

 

[Elliott]

CG,
What would have been your solution to this issue? Do you not think every HO would have a claim on their title insurance policy?

 

[timd354]

So what do you think is the fair market value of a street where you, as the new owner, has no more right to use it than the adjacent property owners? You CAN'T stop them from using it in the same fashion that they have over the past many years, as much as some like to think the new owners could charge for the use, tolls, parking, and other such nonsense.

The only sticky part is how to maintain it if the new owners refuse. The property owners can't maintain something that they don't own; the new owner isn't going to spend any money on it.

That's exactly what happened here and why I ended up as one of three court appointed appraisers when the city finally stepped in and condemned and took over a road in a commercial/retail area. The absentee owner had purchased a private street at a tax sale and wouldn't maintain it and the town got tired of the complaints so they used eminent domain, condemned the road, and repaved it. The appraisal reflected the depreciated cost of the street minus 98% discount because the new owner had no more right to the road than anyone else that chose to drive on it. The appraisal fees far exceeded the award to the owner.

Although the new owner can probably not stop the property owners from using the road to access their homes, he certainly could prevent them from parking on it or better yet, rent the available parking spaces on the road to other people, which would likely be very lucrative in highly developed urban neighborhood. Additionally, he could open it up to public access, which the property owners in this very high end gated community certainly would not like.

 

[timd354]

CG,
What would have been your solution to this issue? Do you not think every HO would have a claim on their title insurance policy?

Nope, title insurance policies exclude claims that arise from the failure to pay property taxes plus the title insurance policies on the individual homeowner's lots would not cover HOA owned property in any case.

 

[timd354]

CG,
What would have been your solution to this issue? Do you not think every HO would have a claim on their title insurance policy?

The solution to this issue is for the HOA/Homeowners to buy the street back from the rightful owner. The rightful owner is an investor and he no doubt would be willing to sell for a good profit.

 

[Mark K]

Although the new owner can probably not stop the property owners from using the road to access their homes, he certainly could prevent them from parking on it or better yet, rent the available parking spaces on the road to other people, which would likely be very lucrative in highly developed urban neighborhood. Additionally, he could open it up to public access, which the property owners in this very high end gated community certainly would not like.

If they've been parking on it for the past 20, 30, 40+ years he very likely cannot stop them from continued parking.

And the 'pay parking lot' idea probably won't get far unless the street is zoned for commercial use, i.e., paid parking lot.

I think the sale should have stood; the City should have stayed out of it once they collected the check. Let the homeowners and purchaser fight it out if desired. The lawyers and appraisers stood to make a lot of money off of the entire cluster ....

 

[timd354]

Do they have the legal power to do this?

I don't know how they can simply rescind a valid sale without paying compensation...this is definitely a taking, if the action is even valid. If I owned that street, the residents would have awakened this morning to the site of the nice gate being chained and locked closed. I don't see how the city's actions last night remotely voids the property owner's title.