Big landlord’s lawsuits piling up

One of the largest landlords in The City, which is already facing a slew of lawsuits for allegedly withholding tenants’ deposits, is the subject of a new class-action lawsuit — this one related to labor laws.

The housing empire of more than 7,000 apartments — controlled until last year by CitiApartments, the Lembi Group, Skyline Realty and associated companies — has been hit hard by the real estate slump and dour credit market.

Lenders have foreclosed upon, or are in foreclosure proceedings for, more than one-quarter of the 307 buildings previously owned by the group.

As CitiApartments and the related companies have run into financial problems, former tenants have alleged in individual lawsuits and a class-action suit that security deposits and payments offered to vacate rent-controlled units are being withheld.

Now, a handful of former property managers for the companies has alleged in a class-action lawsuit in San Francisco Superior Court that payments for their work violated California and San Francisco labor laws.

The property managers were paid for their work through free or discounted rents, according to the lawsuit. If their work exceeded a certain number of hours in a two-week period, the managers were paid an additional hourly rate.

Plaintiff Connor Casey, for example, was hired to spend up to 28 hours per month managing a 16-unit building on Jones Street in exchange for free use of an apartment worth $1,025 monthly. Additional work was paid at a rate of $10 per hour, under the agreement.

Although the property managers agreed to the arrangements, they are now suing the group of companies because the remuneration arrangements allegedly violated state and city labor laws.

“The law places the burden on the employer to enter into lawful agreements,” said attorney Scott Weaver, who is representing the plaintiffs.
Weaver said various laws place restrictions on the use of rent as payment for work.

The class-action lawsuit will likely go to mediation hearings, according to CitiApartments attorney Ed Singer, who said he has not yet been served with a copy of the lawsuit.

Singer said the company believes that it was complying with labor laws, but there might be some “record-keeping issues” with property managers who worked more than 48 hours per month.

“It’s going to be one of those ‘he said, she said’ record-keeping issues, I think,” Singer said.

Legal action

Former property managers have filed a class-action lawsuit against S.F.-based CitiApartments and related companies, alleging labor violations connected with minimum-wage laws. According to their lawsuit:

  • Property managers were paid for their work through free or discounted rents.
  • If their work exceeded a certain number of hours in a two-week period, the managers were paid an additional hourly rate.
  • The payment arrangements allegedly violated state and city labor laws.
  • Various laws place restrictions on the use of rent as payment for work.

    jupton@sfexaminer.com

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