In March of 2015, Debra Follingstad's Facebook post went viral, a story that served as a "sign of the times" anecdote about the state of San Francisco eviction scares and housing horrors. In hindsight, the situation was actually sort of singular in its weirdness, and in the end, the tables have turned for the parties involved, as San Francisco magazine learns in an update to Follingstad's saga.
Follingstad, who works as an acupuncturist, had been in her Bernal Heights apartment for 10 years before it changed hands to Nadia Lama whose father owned several buildings in the neighborhood, and willed this one to her after his death. In order to get Follingstad, who lived on the upper floor, and another tenant living in the downstairs area, out of the building, Lama allegedly first bullied the lower-floor tenant out. His unit wasn't legal, though he had been in it for a long time, and he had no recourse. Once he was gone, Lama converted his in-law apartment into "storage space," ripping out his bathroom. Then in March 2015, Nadia Lama upped the rent at the supposedly rent-controlled building from the $2,145 she had been paying to a whopping $8,900. As a single-family home, Lama claimed, as the building had been at least on paper all along (with the in-law unit not considered as such) rent-control didn't apply. For the $8,900 a month plus a deposit of more than $12,000, Lama offered to rent Follingstad the whole place. All told, the price was way more than she or likely anyone else was going to pay for the apartment, and it was all a ploy in the end so that Lama herself could move in.
The novel tactic, probably not applicable in many other situations, was a de facto eviction but Lama and her attorney didn't believe it required the work of an actual Ellis Act or owner move-in eviction and the ensuing buyout or mandated relocation fees. After Follingstad was displaced, she bounced around, staying with friends and looking for permanent housing, and a year after her ersatz eviction she was diagnosed with breast cancer. She moved in with her boyfriend while she went through radiation treatments. Meanwhile, for what she claimed was essentially a wrongful eviction, Follingstad sued Lama, and a week before a jury trial was set to begin, the landlord agreed to a $400,000 settlement.
That's a lot more than the $9,250 that an owner move-in eviction relocation payment would have cost Lama had she just done this properly two years ago. In fact, it's that missing relocation payment times forty. As Follingstad's lawyer Joseph Tobener explains, the damages a jury could have awarded might have been even higher, although he calls this sum "the highest amount we've ever settled a case [of this type]."
Per SF Mag:
Why such a big payout? Why 40 times the required relocation payment, and not, say, 10? It all goes back to the damages a jury could award, says Tobener. Tenants who unfairly lose rent-controlled tenancies get compensated for the rent savings they would have accrued over some number of years. Then there are damages awarded for emotional distress, if the tenant's side can show that the landlord had a reckless disregard for the tenant's rights. And this is the real doozy: Rent damages are automatically tripled under San Francisco's Rent Ordinance. Emotional distress damages, if they are awarded, get tripled too. "Part of the reason wrongful eviction cases tend to settle is that emotional distress damages are unpredictable," says Tobener.
"It's hopefully a warning to landlords who want to be greedy," Follingstad tells the magazine, who do note via Lama's attorney that the settlement is not an admission of liability or wrongdoing. SF Mag also points out that Follingstad won't see all $400,000, as Tobener will take at least a 30 percent cut, leaving her $280,000 to then be taxed, which she says she'll likely spend on medical bills.
Last, it remains to be seen what Lama will be able to pay. After all, KQED speculated back in 2015 that Nadia Lama may have opted for the rent increase instead of paying relocation fees as she was feuding with her two sisters, three brothers, and some children, over family assets accrued by her father, a native Palestinian who moved to Chile and then San Francisco, building a small real estate empire in the Bernal Heights neighborhood. Lama at the time was being evicted from a home up the street by her own siblings, and was still awaiting a payment from the sale of two other properties their father had owned.
Previously: [Update] Landlord Uses Loophole In Rent Control Law To Raise Woman's Rent To $8900
[Update] Lawyer Behind Egregious Bernal Heights Rent Increase Gives Snide Statement Denouncing Rent Control
Bernal Heights Woman Who Was Given 400 Percent Rent Hike Moves Out Today