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Tenants sue, allege rent coupons were misleading

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Renters were given monthly discounts; after one year, the price was raised

Tenants of one of The City’s largest landlords are suing over an alleged scam in which their rents were hiked above legal limits after receiving rent coupons for a year.

The owners of Villas Parkmerced, which includes more than 3,400 apartments near San Francisco State University, gave tenants “bonus bucks” coupons that effectively lowered their rents below the actual amount shown on their leases, the plaintiffs allege.

The lawsuit by tenants David Franklin and Derek Tanguay was filed in San Francisco Superior Court on Wednesday. The two aim to be joined by others in the creation of a class action lawsuit.

The lawsuit alleges that they signed a one-year lease for $1,675 a month and received 12 “bonus bucks” coupons for $350 each. With the year’s supply of coupons, they were paying $1,325 a month.

At the end of the lease, their rent was raised to $1703, the legally allowed 1.7 percent increase of $1,675 permitted under rent controllaws.

The tenants claim they were duped into believing the $1,325 was the real rent and that the landlord was seeking to skirt the rent control laws by providing the coupons.

Attorney David Wasserman, who represents the owners, said the tenants knew that the coupons constituted a short-term incentive and that they were aware of their true rent.

“Nothing was hidden from the tenants,” Wasserman said. “They knew it was temporary.”

Wasserman said the coupons were the equivalent of a store having a sale and lowering prices temporarily.


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