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Everything You Need to Know About the Dispute Over the 315% Rent Hike in Bernal

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Ever since news broke of the stunning 315 percent rent increase Deb Follingstad faces at her Bernal Heights apartment, the Internet has been obsessed with Follingstad's conflict with landlord Nadia Lama. The case of the displaced acupuncturist has captured the attention of San Franciscans at a time when those lucky enough to benefit from rent control enjoy a privileged status among renters, but also find themselves vulnerable to eviction by landlords who want to cash in on the city's overheated real estate market.

As you recall, Lama seeks to increase the rent on Follingstad's two-bedroom apartment—which had until recently been protected by rent control—from $2,145 to $8,900 per month. In her now-viral Facebook post, Follingstad alleges that the increase is an attempt to force her to move without going through a formal eviction (and thus without triggering a relocation payment under the Ellis Act). But Lama's attorney, Denise A. Leadbetter, characterizes the rent hike as a fair increase based on the new terms' offer of more space in the building. Follingstad's predicament sparked outrage on Monday, but matters were soon complicated by the revelation that she had been intermittently renting out a bedroom in her unit on Airbnb.

At this point, there's little question of Follingstad staying on in the apartment. "I definitely need to move," she tells us. But sorting out the legality of Lama's actions—and to a much lesser extent the legality of the Airbnb listing—does shed light on the merit of a potential wrongful eviction lawsuit, if Follingstad were to file one. (Joseph Tobener, a tenant rights lawyer who has been advising Follingstad, declined to comment on the merits of such a case.)

If such a case were to move forward, it would in part hinge on whether the rent increase to $8,900 is above market rate for the kind of unit and the new terms Lama offered.

Another issue is whether the steps Lama took to remove Follingstad's building from rent control protection were legitimate. In her Facebook post, Follingstad alleges that Lama took the illegal downstairs unit out of service—or "demolished" it, in Planning parlance—by removing the stove, sink, and toilet. Once that happened, the building became a single-family residence and lost its rent control protections, paving the way for the rent hike.

Weirdly, that kind of move can be legitimate under San Francisco's laws, thanks to a difference in the way the city treats legal units and illegal units. As Tobener explained in our earlier story, landlords who want to merge two legal units into one need to go through discretionary review with the Planning Department. But landlords who want to take an illegal unit out of service need only get building permits for the work—a much more rote process. However, Curbed's search of the Department of Building Inspection's online records did not turn up a building permit for removing a kitchen or bathroom at 355 Bocana, Follingstad's building.

The revelations around the events leading up to the rent hike keep growing, most notably with KQED's carefully reported deep dive into the Lama family's legal drama. To help us all keep track, here now is a complete timeline of everything we know so far in the battle sweeping Bernal.

2004: Deb Follingstad moves into a two-bedroom apartment on the second floor of 355 Bocana Street with a roommate. As a two-unit building built before 1979, the building falls under the city's rent control law, despite the ground-floor unit being illegal. Follingstad's landlord is Shukry Lama, a.k.a. Chuck Lama.

2006: Follingstad's roommate moves out and she takes over the lease. Her downstairs neighbor in the illegal unit, Wayne Moore, has been living there for more than a decade. He runs a housepainting business out of a converted garage in the downstairs space. The building was once a service station with living quarters on the second floor.

July 2012: Chuck Lama dies. His daughter Antoinette Lama becomes Follingstad's point of contact and de facto landlord.

Early 2013: Wayne Moore moves out of the downstairs unit. According to KQED's report, Moore says his annual rent increases exceeded those permitted by rent control. "I didn't have the time or energy to fight it, so I just paid it," he tells KQED. Later, a friend of the Lama family moves in downstairs, according to Follingstad, but doesn't stay more than a year.

November 2013: Sometime after Follingstad's latest roommate in her own unit moves out, she joins Airbnb and lists one of the bedrooms as a short-term rental.

To determine whether the Airbnb listing was legal, Curbed requested a copy of the lease from Joseph Tobener and from Denise Leadbetter, the lawyer for Follingstad's current landlord, Nadia Lama. Leadbetter has not responded as of press time; Tobener did not provide the lease itself but did describe the terms of the lease. "The lease did not prohibit subletting or short-term rental," he says via email.

That would mean that Follingstad's Airbnb was not in violation of her lease. As tenant rights attorney Jason Wolford (who is not connected to Follingstad or the Lama family) explains, "If there's no prohibition against subletting in the lease, then utilizing Airbnb wouldn't be a violation of the subletting agreement, because there is no subletting agreement."

However, Follingstad's Airbnb—like all Airbnbs before the city's short-term rental ordinance went into effect February 1—violated San Francisco's Residential Unit Conversion Ordinance, which prohibited rentals of fewer than 30 days. If the owners had chosen to, they could have pursued a just-cause eviction by claiming the Airbnb rental created a nuisance. Or they could have alleged unlawful use under the city's conversion ordinance. But Follingstad describes Chuck Lama as a friendly yet hands-off landlord. "I was told by Chuck that he only dealt with me and he only accepted checks from me and that I did whatever I wanted to do roommate-wise," she says. "I was told the same thing by Antoinette."

December 2013: Two tenants of another Lama family-owned two-unit building in Bernal Heights, Nina Gelfant and Gayla Worrell, file a wrongful eviction suit against sisters Claudia Lama-Parakka and Antoinette Lama, according to Superior Court filings. The suit alleges that the Lamas pressured the tenant in the property's illegal in-law unit to move, took the unit out of commission to strip the building of rent control, and then raised the rent for their one-bedroom from $1,650 to $4,250.

Sometime around early 2014: Back at 355 Bocana, with the last tenant gone, work begins on the downstairs unit. Follingstad doesn't think much of it. "The apartment was pretty bad," she recalls. "They needed to gut it anyway." In February, the Lamas remove the stove and sink from the kitchen and leave them in the backyard.

June 2014: The Lamas list the Bernal Heights property where Gelfant and Worrell rented, a two-bedroom cottage, for $945K.

August 2014: The cottage sells for $850K.

December 2014: Two years after Chuck Lama's death, the assets in the family trust are distributed among the siblings, according to a San Francisco Superior Court document obtained by KQED. 355 Bocana is transferred to Nadia Lama, along with $750,000 in cash—and an extra $7,500 for an "attorney of Nadia's choosing for eviction of tenant or tenants" at 355 Bocana.

January 2015: Claudia Lama-Parakka and Antoinette Lama settle the case brought by Gelfant and Worrell. Nadia Lama takes over as Follingstad's landlord and begins working on the vacant illegal unit downstairs, according to Follingstad.

February 2015: Nadia Lama pulls the toilet out of the downstairs apartment and turns the unit into storage space, according to Follingstad. The apartment is no longer habitable, and the building is henceforth a single-family dwelling, which removes it from rent control.

March 2, 2015: Denise Leadbetter, the attorney for Nadia Lama, serves Follingstad with a change in terms of tenancy that would take effect May 5, 2015. The new terms raise the rent by 315 percent, from $2,145 to $8,900, and increase the security deposit to $12,500. (According to Follingstad, the new offer would give her access to lower level, albeit as a personal storage space.) Meanwhile, Zumper's February 2015 rent report puts the median asking rent for a two-bedroom in Bernal Heights at $4,300/month. No rental website we know of, however, tracks median rents for apartments that include vast storage spaces in former garages.

Early March 2015: Follingstad updates her Airbnb listing with news of the rent hike and invites prospective guests to come "celebrate my final months hosting wonderful travelers from all around the world, sharing interesting places to see, eat and enjoy in this beautiful city I have called home for 26 years."

March 14, 2015: Follingstad posts the now-infamous photo of the new agreement showing the rent hike to $8,900 on Facebook. She includes her account of the "loophole landlords have found in San Francisco to evict their tenants without actually having to pay relocation"—namely, converting two-unit buildings with one illegal unit back into single-family homes and thus voiding rent control. Follingstad's post is shared about 2,200 times in the first 36 hours.

Morning of March 16, 2015: Follingstad's story goes viral in the press.

The backlash is palpable in Bernal when someone tapes up a cardboard sign markered with "Shame on You," along with Nadia Lama's name and the phrase "315% rent increase," on the door of the old Reliable Grocery, a.k.a. Chuck's Store. The store had been owned and operated by Lama family members until its closure in July.

Afternoon of March 16, 2015: Someone discovers that Follingstad was renting one of her bedrooms out on Airbnb. (The Airbnb listing has since been taken down, but it survives for now in Google Cache.) Speculation takes off, and some of the outrage that had been directed at Lama deflects onto Follingstad. The Internet accuses her of exploiting her situation for profit.

March 17, 2015: The Department of Building Inspection confirms that Nadia Lama did not have the required building permit to take the illegal apartment out of commission. William Strawn, the department's manager for legislative and public affairs, tells Curbed: "[P]er research by our Deputy Director for Permit Services, Ed Sweeney, no permits were applied for, or issued, by DBI for the removal of any unit at 355 Bocana."

Follingstad responds to the Airbnb controversy, telling the Chronicle, "The rent increase and me being forced to move isn't about Airbnb."

March 18, 2015: Denise Leadbetter, Nadia Lama's attorney, releases a statement describing the change in terms of tenancy Follingstad was offered. "The rent increase that has generated this controversy is actually an offer by the owner to rent a substantially larger home than was originally rented," she writes. "Ms. Follingstad will have access to 60% more space which can be used by the tenant to offset the rent increase through her existing Air BnB business."

Curbed requested a copy of the full change in terms of tenancy from both Leadbetter and from Tobener. Leadbetter has not returned our email. Tobener did not share the document either, but he described some of its terms. The new terms have a no-sublet provision and thus prohibit Airbnb, according to Tobener. "The lease specifies that it can be used for storage only," he adds, referring to the additional space the new terms offered.

An email to Leadbetter asking if the offered space currently has a kitchen, shower, and toilet has not been answered.

· Longtime Rent-Control Tenant Shocked to Discover $6,700 Rent Hike Is Totally Legal [Curbed SF]
· Renting Laws Your Landlord Probably Doesn't Want You to Know [Curbed SF]
· Guy from 'Mission Playground Is Not for Sale' Video Tells His Eviction Story [Curbed SF]
· Backlash Begins in Bernal Over Landlord's 315% Rent Hike [Curbed SF]
· Change in Terms of Tenancy [Facebook]
· Tobener Law Center [Official Site]
· The Family Dispute Behind Infamous Bernal Heights Rent Hike [KQED]
· Wolford Legal [Official Site]
· February 2015 Rent Report [Zumper]
· Mapping the Median Rent of a One-Bedroom in San Francisco [Curbed SF]
· UPDATED: Bernal Resident Stunned by 315% Rent Increase [Bernalwood]
· Bernal Heights Woman with Huge Rent Increase Does Airbnb and the Internet Freaks Out [The Bold Italic]
· Bernal Heights Tenant with Huge Rent Increase Addresses Airbnb Situation [SFGate]
· Lawyer of Bernal Heights Landlord Provides Statement: 'There Are Many Sides to a Story' [SFGate]