Adan Lobo, a native of Honduras, was living in a small, run-down place on Hampshire Street, sharing a room and showering under a tarp to keep the dirty water leaking from the ceiling above from dripping on his head.
It was, he says, “kind of nasty.”
But now he misses the place, because since his eviction, he’s been forced into residential hotels that he says were infested with fleas and bedbugs, and now he’s living in a van with three other men. Some of his former housemates are sleeping in their cars, or on the street.
Eviction stories are increasingly common in San Francisco, but the one concerning Lobo has a stunning twist: he and the other residents of 938-940 Hampshire Street were forced out when the landlord allowed the building to decay so badly that the Department of Building Inspection (DBI) ruled that it was uninhabitable.
The ruling triggered a state law mandating that the owner give the tenants relocation money, but according to court filings, Working Dirt LLC, which bought the place in January, stopped payment on the checks.
According to public testimony before the Building Inspection Commission, some of the tenants had already cashed the checks and spent the money on hotel rooms, when the check cashers called demanding the money back.
The tenants had been forced to leave with little notice, most leaving behind their possessions. Then the landlord locked the building with a chain, which made it difficult for them to collect their things.
Months later, the building repairs still aren’t completed and the landlord has removed kitchen and bathroom fixtures and torn down the front stairs, making it impossible for anyone to get in.
“Since the building was vacated, a contractor removed the front stairs with no permit,” Chief Housing Inspector Rosemary Bosque said at a recent commission hearing, which was called because Working Dirt LLC was denying responsibility for the relocation fees.
938-940 Hampshire Street
The property at 938-940 Hampshire Street, which is technically a two-unit building, has been used as a boarding house for at least 20 years. It was owned much of that time by Medardo Avina, who lived there and chose all the tenants, collecting rent from them individually.
There were as many as 24 people living in the two units, often two or three to a room.
“The Hampshire property has been used as a boarding house for decades,” a filing by the tenants submitted to the Building Inspection Commission states. “There are tenants who have lived there for 20 years. Each occupied room has been rented out as an individual unit for which rent has been paid directly to the landlord. No tenant had a say in who occupied the other rooms. New tenants were permitted at the sole discretion of the landlord.”
Avida didn’t put a lot of effort into maintaining the place; the DBI has abatement orders demanding upgrades on the place dating back to 1995.
The tenants, mostly monolingual immigrants, didn’t get their complaints resolved, and learned to live with the situation. “They had to use an umbrella to keep the dirty water from the ceiling out of the shower,” Diana Martinez, who works with the Mission SRO Collaborative, testified at the hearing.
When Avida died, his daughter, America, inherited the property, records show. She sold it in early 2015 to Working Dirt2 LLC for $670,000.
Abraham Farag and Working Dirt
Working Dirt2 is part of a web of companies, including Working Dirt LLC and Working Dirt Management Inc., which are connected to or controlled by Abraham Farag.
Farag is well known in the South Bay for buying foreclosed properties and quickly flipping some of them.
He is, according to a lawsuit filed by the tenants, part of “related real-estate speculative companies [that] have extensive experience purchasing distressed properties, clearing the properties of rent-controlled tenants, and then remodeling to rent out to new market-rate tenants of to sell for profit.”
In 2014, he was indicted on federal charges of bid-rigging and “schemes to defraud mortgage holders and others.”
Farag began buying property in San Francisco recently, and has filed at least two eviction cases against tenants, court records show.
His LLC “purchased the premises [938-940 Hampshire] as-is with the knowledge that it was tenant occupied,” a brief filed by the tenants’ lawyers states. “New owners of rental property are required to address outstanding code violations even if they were caused by the previous owners of the property.”
Unsafe to inhabit
A Jan. 16, 2015 DBI inspection revealed “Housing Code violations including the following items in disrepair: water heaters, windows, locks, showers, ceilings, doors, stove, sink, cabinets, floors, siding, electrical switches and receptacles, as well as mold, infestation, and accumulation of debris.”
A letter citing the violations was sent to Farag’s LLC. On Jan. 21, a “Notice of Violation” was posted on the building. On Feb. 17 the place was re-inspected and “no violations were corrected.”
On March 19, the landlord applied for a building permit that “does not include plans … DBI staff seeks to meet with the contractor to discuss scope, lack of plans, and $47,500 valuation.”
Farag’s group filed papers saying that all of the property’s problems could be fixed for less than $50,000. DBI officials testified that the estimates were way too low.
On April 2, the ceiling in the upstairs unit collapsed. DBI ordered the tenants to leave for their own safety.
According to court declarations, on April 7, Working Dirt sent checks that averaged about $1,800 per tenant to Jason Wolford, who with Lisa Giampaoli, is representing the group. Wolford then wrote checks to the tenants. But the next day, the bank informed Wolford that Working Dirt had stopped payment on the checks, so he had to stop payment too.
Working Dirt is represented by Scott Freedman, a partner in Zachs & Freedman, one of the most notorious landlord law firms in the city. Asked about the checks, Freedman said that his client had stopped payment because there was a disagreement about the amount of the payment. After stopping payment, Farag sent replacement checks for about half the amount of the first payment.
In a declaration filed in court, Farag stated that he stopped payment on another $16,000 in relocation fees because the tenants “refused to accept” the money.
Wolford said that “is not factually accurate.”
“At this point,” Freedman testified, “we have paid more than $30,000 in relocation fees. In response to our offer, the tenants have demanded more than $100,000.”
That’s not a lot of money for more than 20 tenants who have to pay market rents in San Francisco today.
The majority of people in the Hampshire house were family—cousins and brothers. Many of the men were sending money back to Honduras to support their families. That’s become impossible.
“For all of us, the money we earn from work, we spend on hotels,” said one of the former tenants.
While the Building Inspection Commission voted unanimously to reject the appeal of Farag and his LLC, meaning the tenants have the right to their relocation money, the building isn’t repaired, and the tenants are still on the streets—and it’s not clear that they will ever be able to move back in.
El Tecolote contributed to this report, which was originally published on 48hills.com. To read the original version in its entirety, visit 48hills.com