“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.”
Singer (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.
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.