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Longtime Rent-Control Tenant Shocked to Discover $6,700 Rent Hike Is Totally Legal

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On March 1, Deb Follingstad and her boyfriend were living in a rent-controlled apartment in Bernal Heights, paying $2,145 for a two-bedroom above what had once been a gas station and garage. On March 2, that all changed. Follingstad found herself holding a legal notice informing her that her rent would soon jump to $8,900—a fourfold increase—with a security deposit set at an astounding $12,500 per month. Follingstad, a Chinese medicine practitioner who treats cancer patients at Smith Integrative Oncology on the Embarcadero, had always believed that she enjoyed the protections of rent control. "I understand that a rent-controlled apartment is a ticking time bomb," explains Follingstand, who has lived in the unit, at 355 Bocana Street, since 2004. "But I never expected what I was served, nor did I think that what they gave me could be legal." Over the weekend, she posted a scan from the legal notice to Facebook with an appeal to friends for any leads on open apartments. The post quickly went viral. As of this writing, it's been shared more than 2,600 times.

But the action taken by Follingstad's landlord, Nadia Lama, appears to be legally sound, thanks to a workaround that gives landlords a way to free themselves of tenants without making the relocation payments required under the Ellis Act. According to tenant rights attorney Joseph Tobener, managing partner at Tobener Law Center, the move is known as a constructive eviction by rent increase, and it's just what it sounds like. A landlord raises the rent to an exorbitant amount, far above market rate, so that the tenant is all but forced to leave—but without being formally evicted or collecting a relocation payment. (Current Ellis Act relocation payments stand at $5,555.21 per tenant.) "When there's this moving allowance at stake, that's what incentivizes the landlord to try and get around the eviction protection," says Tobener.

More about San Francisco's housing crisis:
Guy from 'Mission Playground Is Not for Sale' Video Tells His Eviction Story
Renting Laws Your Landlord Probably Doesn't Want You to Know
The Bounty on Evicted Tenants' Heads May Be As Much As $130K
Map of Ellis Act Notices Shows Eviction Trends

Denise A. Leadbetter, an attorney for Nadia Lama, disputes that Follingstad's situation is a constructive eviction by rent increase. When asked to elaborate, Leadbetter said, "You are not receiving all the information from Deborah, and I have no other comment at this time."

For most of her 11-year tenancy, Follingstad, 46, was protected from large rent hikes under the Rent Ordinance of 1979, because she was living in a multi-unit building (single-family homes and condos are treated differently under the Rent Ordinance). But by 2014, a tenant who had been living in the downstairs apartment moved out, after which, recalls Follingstad, the Lama family ultimately removed the stove, sink, and toilet from the vacant ground-floor unit. "They put down some crappy carpet and now call it a 'storage' space," she wrote in her Facebook post. That change turned her building into a single-family dwelling and effectively dissolved the protection against large rent hikes, or what is known as rent-ceiling-limitation protection.

Normally when landlords want to take a unit out of service, they need to go through discretionary review with the Planning Department, Tobener explains. But because the downstairs unit was not on the books—city documents reflect just one dwelling unit at the address—the landlord needed only building permits to do the work, no blessing from Planning required.

According to building permits filed for the property, the owner had a permit for reroofing, issued in 2012, and one for replacing 37 windows, issued in 2014, after the last tenant moved out of the downstairs unit. "They did replace the roof," says Follingstad. "They didn't do anything to the windows."

Tobener recently represented another party in a wrongful eviction suit against two members of the Lama family, Antoinette Lama and Claudia Lama, who are Nadia Lama's sisters. (Nadia Lama is currently named on property records as the owner of 355 Bocana, though before December 2014 a trust controlled by Antoinette Lama and Claudia Lama was listed as the owner.) When Tobener got a call from Follingstad and she explained her situation, he said, "I couldn't believe I was hearing the same story again." The case Tobener brought reached a settlement in January.

Follingstad, who says she has always been on friendly terms with the Lama family, finds herself in a difficult spot, however. Her position is weaker than that of the party in Tobener's recent suit, in part because, she says, the Lama family made the downstairs storage space available to her. This way, they offered her the use of the entire, newly single-family unit—a step they had apparently neglected last time around, which had cost them in Tobener's case. "That really took the wind out of my sails," Follingstad says. "Ultimately I understand I have to leave." She is currently looking for a lawyer.

For her part, Follingstad sounds overwhelmed by the attention her Facebook post has received. "I am still trying to embrace that posting on Facebook that I needed a home has put me in a larger spotlight than I expected," she told Curbed. At the time, her post's reach stood at 1,442 shares. When we read her the total, she sounded surprised. Then she recovered a bit. "1,442?" she asked. "Right on. I might not be able to get a lawyer and I might not be able to win, but at least people know this can happen."

· Deb Follingstad Acupuncture [Official Site]

· Smith Integrative Oncology [Official Site]

· Notice of Change in Terms of Tenancy [Facebook]

· Tobener Law Center [Official Site]

· Renting Laws Your Landlord Probably Doesn't Want You to Know [Curbed SF]

· Relocation Payments for Tenants Evicted Under the Ellis Act [Residential Rent Stabilization and Arbitration Board]