SF Sues Two Landlords Who Allegedly Ellis Acted Tenants, Turned Buildings Into Tourist Rentals

Lawsuits were filed by San Francisco City Attorney Dennis Herrera today against two landlords who allegedly illegally converted residential apartments into short-term rental units used for tourist lodging offered through online housing services.

In the separate cases, the defendants evicted long-term residents from the apartments under the state’s Ellis Act and marketed the vacant units for short-term stays on sites such as Airbnb, Homeaway and VRBO.

The Ellis Act allows landlords to evict tenants if the owner is getting out of the rental business.

According to San Francisco Superior Court and Rent Board records, two of the evicted tenants in these cases were disabled.

The two properties in Herrera’s complaints filed in San Francisco Superior Court this morning are in the 3000 block of Clay Street in Pacific Heights and the 700 block of Bay Street near Fisherman’s Wharf.

Property owners Darren and Valerie Lee purchased 3073-3075 Clay St. in 2004 and evicted tenants under the Ellis Act the following year, according to Herrera’s office.

In the complaint, Herrera claims the Lees have marketed 3075 Clay St. as a four-bedroom, three-bathroom property on short-term rental sites such as Homeaway and VRBO since 2009, charging between $395 and $595 per night.

Herrera alleges that the owners violated the city’s Planning Department code and were cited, and even at one point had received $250 per day fines for violations. However, the Lees continued to rent out the illegal units.

At the Lees’ other property at 3073 Clay St., one of the evicted tenants was disabled, according to Herrera.

The tenant had lived there for more than 10 years paying $1,087 per month until being evicted under the Ellis Act.

Under the Ellis Act, the Lees were not allowed to re-rent the unit at market rate until Aug. 25, 2011.

Herrera claims that the Lees re-rented the unit ahead of that date, charging new tenants between $5,000 and $7,038 per month.

The other civil complaint against Lev, Tamara and Tatyana Yurovsky also alleges the use of the Ellis Act to evict long-term tenants, including another disabled tenant from one of their properties at 734 Bay St.

At another one of the Yurovskys’ properties at 790 Bay St., the Yurovskys allegedly converted the apartments there into illegal hotel-like units and marketed the rooms on Airbnb and greatsfvacation.com for rates ranging between $165 and $320 a night with three-night minimum stays.

In February 2007, court records show that the Yurovskys had sued tenants at their property at 734 Bay St. for failing to vacate the premises by deadline after they had evoked the Ellis Act.

Herrera’s lawsuits come just more than a week after San Francisco Supervisor David Chiu introduced legislation that would regulate and crackdown on abuses of the short-term rental market.

Under the proposal, hosts or property owners who use websites such as Airbnb and other offline services to find renters for short stays at apartments and homes have to register with the city and meet qualifications to rent out units.

Airbnb, which last month agreed to pay hotel taxes for the services offered on their site starting this summer, lauded the proposal but expressed concerns over how users should register with the city.

Herrera has encouraged residents to report housing-related complaints to the city by visiting Up2code.org or by calling a code enforcement hotline at (415) 554-3977.

Sasha Lekach, Bay City News

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