S.F. Tenant Forced Out by 315 Percent Rent Hike Wins $400,000 Settlement

In March 2015, the owner of this Bernal Heights residence raised her long-term tenant's rent from $2,145 to $8,900 a month, with a $12,500 security deposit. (Google Street View)

Updated 11:45 p.m. Tuesday, Jan. 17, 2017

It was a spark for instant outrage in the midst of a San Francisco rental market gone mad: A woman renting an apartment in Bernal Heights announced on Facebook one weekend in March 2015 that her landlord was increasing her rent from $2,145 to $8,900 a month. And her security deposit was going up, too — from $1,500 to $12,500.

The tenant, Deborah Follingstad, was forced to move from her home of 11 years on Bocana Street, and her erstwhile landlord, Nadia Lama, moved in. But that wasn’t the end of it.

Follingstad sued Lama, who had acquired the property through the distribution of a family estate.

In the August 2015 lawsuit, Follingstad and her lawyer, Joe Tobener, accused Lama of trying to get around a city ordinance that requires payments for tenants displaced in an “owner-move-in” eviction.

That litigation proceeded without gaining much attention — until now.

Tobener announced Tuesday that, with a jury trial scheduled to begin next week, Lama had settled for the staggering-sounding sum of $400,000.

Tobener said the high settlement amount reflected both what he called Lama’s “egregious” behavior in raising the rent and the risk Lama ran in allowing the case to go to trial, where a jury could award triple damages for his client’s emotional distress claims.

“It’s the highest constructive-eviction-by-rent-increase case we’ve ever had,” Tobener said, adding that such cases typically settle for amounts “in the high five figures.”

Tobener said that under the city’s owner-move-in ordinance, Lama would have been required to pay Follingstad $9,522 for forcing her to move.

Lama sought to move in to the property early in 2015 after removing an illegal in-law unit that had been built at the Bocana Street property in the early 1990s. That would have had the effect of making the dwelling a single-family home and thus exempt by state law from local rent control statutes.

“Their defense was, hey, they took the lower rental unit off the market, they took out the kitchen, and therefore it became a single-family home, so they were allowed to increase the rent to whatever they wanted,” Tobener said. “Our argument was, ‘Look, you can increase the rent to market rate, but you can’t raise it way above market rate to force someone out to get around the owner-move-in eviction protections.’ ”

Tobener said evidence made it clear Lama wanted Follingstad out simply so she could move in.

“The intent was there, the bad motivation was there, and a jury would have heard that if Nadia Lama had done this right, she could have done an owner-move-in eviction for $9,500. Instead, she took the unscrupulous path and caused the tenant a lot of stress.”

For Follingstad, an acupuncturist, the outcome is bittersweet. She said Tuesday she was “shocked and super-pleased” with the settlement. But she added that events since she was forced to leave the Bocana Street in early May 2015 property have been difficult.

She spent more than a year couch-surfing and house-sitting inside and outside the city before she found a new apartment in San Francisco.

She said the housing challenge pales in comparison to her main preoccupation for most of the last year: breast cancer, which was diagnosed last May, a year after she left Bernal Heights.

“It was a really hard year on top of another really bad year,” she said.

Follingstad, who has specialized in treating cancer patients in her practice, says she feels there is a connection between her illness and the stress of losing her home.

“Every cancer patient in the world would line up around the block to find out what it was that actually gave him cancer,” Follingstad said. “But I can pretty much say that the stress and the depression and all of the anxiety that I went through upon that whole fiasco contributed to my cancer, if not caused it.”

Follingstad said she completed chemotherapy in the fall and radiation treatment last month and that the settlement will provide her funds to pay medical bills.

Attempts to reach Lama on Tuesday were unsuccessful.

Her lawyer, Paul Sheng, said in an email that Follingstad’s “allegations/theories about what defendant was trying to do were denied by defendant and were never proven.”

He said the settlement was reached during negotiations with a private mediator.

“Both sides to the dispute reached a mutual and voluntary agreement to resolve the case in order to avoid the cost and uncertainty of further litigation,” Sheng said. “The parties’ agreement specifically provides that they are settling disputed claims, with no admission or acknowledgement of any liability or wrongdoing by any party.”

S.F. Tenant Forced Out by 315 Percent Rent Hike Wins $400,000 Settlement 30 December,2017Dan Brekke

  • Steve

    ha ha ha ha – finally the evil greed met its match – I hope we see lots and lots more

  • Why didn’t the rental increase limit apply?
    http://sfrb.org/topic-no-051-years-annual-allowable-increase

    • The LL did a shady work around and got caught.

      • What workaround exactly? It’s not clearly stated in this article or the previous one.

        • Anna Estrada

          It’s explained in the article. She got rid of an in-law that had been built in the 1990s which turned the house into a single family home not subject to rent control laws.

          • LilMountain

            An ILLEGAL in-law unit! That shouldn’t qualify it to be subject to those laws

  • Jose Miguel Castello

    As much as I want to support libertarians (not being sarcastic), it simply wouldn’t work in the United States of Litigation. The lack of common sense in people requires us to have laws.

    • LilMountain

      No, common sense is the OWNER shouldn’t be obligated to pay you to leave THEIR property once a lease is up

  • Borgus

    C-I-L-L my lan’lord.

    • Dan Brekke

      An Eddie Murphy SNL classic.

      • Borgus

        Truly. As the whimsical Buttwheat.

        • kurtsteinbach

          That’s Buckwheat. . . .

          • Borgus

            Otay.

  • Marni

    I’ve been waiting a long time for Nadia to come to justice. While this particular incident is egregious, it is just one of a collection of (often) illegal and dangerous actions over the past decade(s) in Bernal She has been verbally, emotionally, and physically assaulting neighbors and tenants for YEARS. Many Bernalites are more than well aware of her bullying and sometimes violent behavior.
    This is just the tip of the iceberg and I hope she finds help before she harms her children or anyone in the neighborhood.

  • a neighbor

    Dan, here’s another story you may want to write, Single mother unable to move into her home despite the fact she owns it. This mother wants to provide a stable home for her children. In the meantime, the tenant, who had years of paying under market rent for years and had over a year to find a new living situation, refused to leave. The tenant settled for $400,000. Who is greedy and egregious?

    I get the evil landlord situation and know too many people who have been forced to move out of the city. This situation is much more complex than you lay out in the article. Its too bad because you really had an opportunity to write a meaningful article with lessons for both tenants and owners.

    • Dan Brekke

      Yes — I documented some of Ms. Lama’s troubles when I wrote about this in 2015: https://ww2.kqed.org/news/2015/03/18/315-percent-bernal-heights-rent-increase/

      I did try to contact her then, directly and through a member of her extended family, and I did so again yesterday. She has never responded. If she’d like to tell her side of the story, we’re more than willing to hear it.

    • Ethan Ramirez

      The fact is she didn’t follow the law. It was her responsibility to know the laws of the land and proceed properly. This applies to everyone, huge corporations with many properties and single mom’s alike.

    • BJ

      Idiot

  • LilMountain

    So it was only subject to those laws because of an illegal in-law unit? Ridiculous maze of red tape this stupid city has

  • Bob

    Foolish judgement. These are reasons why rent control is ridiculous. There are plenty of areas with lower cost of living. Feel free to move there and quit trying to take advantage of people who has put their investments into their property. MOVE OUT.

  • walking dread

    “But I can pretty much say that the stress and the depression and all of the anxiety that I went through upon that whole fiasco contributed to my cancer, if not caused it.”

    THAT IS NOT HOW CANCER WORKS YOU MORON.

  • BJ

    You people are morons. Good for the tenant!

  • “NATURAL PATH”

    CBD OIL CURES CANCER. SODIUM BICARBONATES KILL CANCER. CARROT JIUCE KILLS CANCER. APRICOT KERNALS KILLS CANCER.
    GRAPE SEEDS CURE CANCER. TUMERIC GINGER & CLOVES KILL CANCER.
    KEMO KILLS ! RADIATIONG KILLS ! ITS ALL FOR PROFITS NO CURES IN THIS CLASSICAL APPROACH TO CANCER WICH IS ACTUALLY A “FUNGUS” ITS PRE MEDITATED “LAGAL” MURDER. PERIOD !!!

  • Bob D

    The SF laws which deny the owner of the property the pleasure of using it are Orwellian. I can’t believe those laws would meet constitutional standard. Too bad the owner of the property didn’t have the financial means to ensure the law is followed.

  • Wtf

    Tenants who have cancer blamed the house owner. What happens when the house owners have cancer? Who should they blame it
    on?

Author

Dan Brekke

Dan Brekke is a blogger, reporter and editor for KQED News, responsible for online breaking news coverage of topics ranging from California water issues to the Bay Area’s transportation challenges. In a newsroom career that began in Chicago in 1972, Dan has worked as a city and foreign/national editor for The San Francisco Examiner, editor at Wired News, deputy editor at Wired magazine, managing editor at TechTV as well as for several Web startups.

Since joining KQED in 2007, Dan has reported, edited and produced both radio and online features and breaking news pieces. He has shared in two Society of Professional Journalists Norcal Excellence in Journalism awards — for his 2012 reporting on a KQED Science series on water and power in California, and in 2014, for KQED’s comprehensive reporting on the south Napa earthquake.

In addition to his 44 years of on-the-job education, Dan is a lifelong student of history and is still pursuing an undergraduate degree.

Email Dan at: dbrekke@kqed.org

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