David Franklin et al. v. The Villas Parkmerced et al.
Alleged “Bonus Buck” Scheme at Villas Parkmerced
San Francisco Superior Court, Case No. CGC–06–456720
This is a class action lawsuit filed on behalf of all current and former tenants of The Villas Parkmerced apartment complex who have been injured by the landlords’ allegedly unlawful efforts to circumvent the protections that San Franciso’s Rent Control Ordinance affords existing tenants with respect to rent increases.
The Rent Control Ordinance limits annual rent increases to 60% of the annual increase in the Consumer Price Index for All Urban Consumers in the Bay Area (“CPI”). For example, effective March 1, 2006 through February 28, 2007 the maximum allowable annual rent increase is 1.7%. Each year San Francisco’s Rent Control Board, the administrative agency established by the Rent Control Ordinance, publishes the maximum allowable annual rent increase for the benefit of the law abiding tenants and landlords in San Francisco.
The Villas Parkmerced’s alleged unlawful conduct occurs primarily through the use of the “Bonus Bucks” rebate coupon scheme to obscure the true base rent charged tenants upon their initial occupancy and to facilitate the imposition of exorbitant and illegal rent increases. By way of example, certain tenants agreeing as of October 1, 2005 to lease a unit for one year for $1325 per month were asked to sign two separate documents in order to achieve a net $1325 monthly rent: (1) a lease that stated a monthly rent of $1675 per month and (2) a contemporaneous addendum that issued Bonus Bucks that deducted $350 per month. As of October 1, 2006, at the end of the initial lease term, these tenants’ rent was raised, ostensibly by the maximum amount allowed by the Rent Control Ordinance (1.7%), but calculated based on the $1675 artificial base rent (as opposed to the $1325 true rent), and without the reissuance of Bonus Bucks, resulting in a 28% ($378) rent increase.
The rental increases resulting from these Bonus Bucks practices are illegal because they invariably and drastically exceed the maximum rent increase allowed by law. Plaintiffs contend that The Villas Parkmerced has known definitively of the illegality of its conduct since no later than April of 2004, when the Rent Control Board ruled against it and in favor of a tenant–petitioner on this precise issue. The Rent Control Board confirmed similar rulings against The Villas Parkmerced on October 17, 2006. Nevertheless, The Villas Parkmerced continued and continues to engage in the same Bonus Bucks practices and to collect illegal rents with respect to other similarly situated tenants.
Many tenants were forced out of their homes by these exorbitant rent increases. Many tenants continue to pay rents far exceeding the lawful levels. Many are owed substantial sums for past overpayments.
This class action lawsuit seeks to obtain appropriate relief for all affected tenants, including those who were forced to move out rather than pay these unlawful and exorbitant rents. If you believe you have been a victim of these practices, or have related information, please contact us.
