It took five years of legal tug-of-war, but San Francisco City Attorney Dennis Herrera finally got the notorious Lembi family — The City’s most abusive large-scale landlord — to accept a court settlement forcing them to pay San Francisco millions and either clean up their act or leave town.
In sort of a flashback to old-time Western movies where the sheriff tells the black-hat guys to “Git out of town,” Herrera could make the Lembis pay as much as $10 million. Yet damages are capped at only $2 million if the Lembis agree “to forever cease property management” in San Francisco “permanently and irrevocably.”
The city attorney’s 2006 lawsuit against the Lembi companies — CitiApartments, Skyline Realty and smaller shells — charged them with an “egregious pattern of illegal business practices” amounting to a “panoply of lawlessness, intimidation tactics, [and] retaliation against residents.” For more than a decade, the Lembis were notorious for allegedly pushing out rent-controlled tenants — sometimes even using armed guards.
CitiApartments and affiliates routinely refused to give back tenant security deposits, tenants charged, and they wouldn’t make repairs. Tenants complained they illegally entered units, changing locks, shutting off utilities, intimidating and harassing tenants who refused buyouts. They allegedly did construction work without legal permits or inspections and illegally rented out residential units as hotel rooms or executive suites.
Last week’s settlement agreement specifically forbids Lembi companies from continuing a laundry list of egregious practices, including offenses as basic as failing to give 48-hour written notice of utility shut-offs and not answering tenants’ requests for repairs within 72 hours.
Meanwhile, in an unexpected example of “karma,” at the same time as the city attorney’s charges were closing in, the Lembis’ rental empire was falling apart. At the peak, they owned more than 300 San Francisco apartment buildings. CitiApartments and Skyline Realty signs posted new vacancies on multi-unit buildings throughout The City.
Today, two-thirds of their properties have been sold or repossessed. Eighty of the remaining 100 are in receivership and only 20 remain under Lembi family control. Apparently the Lembis became caught up in the housing bubble. At one point, they were scooping up three-quarters of the San Francisco apartments for sale, frequently at prices far above market value.
This shaky financial condition is why the City Attorney’s Office has allowed a sliding scale for the Lembi fines. What the family ultimately pays will depend on how many of their holdings are still left, as well as whether the family is willing “to forever cease property management” in San Francisco.
This newspaper would be first to recognize that The City’s thorny regulations make it difficult for residential landlords to obtain a fair profit on their investments. But the Lembis’ long record of abuses shows how a truly ruthless landlord can exploit the system to force out rent-controlled tenants by threats and intimidation.
The Lembi clan fully deserves whatever punishment they get for years of exploiting and stealing from San Francisco’s middle-class market-rate apartment renters. Our only regret is that it took so long to get CitiApartments tenants protected and that so many people who got hurt have still never received any relief.