Court allows building owners in Iris Canada case to convert to condominiums

Planning Commission finding that removal of elderly tenant rendered owners ineligible overturned

The owners of a six-unit San Francisco residential building won permission from a state appeals court on Friday to proceed with a condominium conversion, in a case that drew widespread attention over a 100-year-old woman’s efforts to stay in one of the units.

The First Appellate District of the California Court of Appeal unanimously reversed a decision of the San Francisco Planning Commission that held that the unit owners were barred from an expedited conversion of the property because the tenant Iris Canada had been “displaced” prior to the conversion.

The appeals court decision is the latest milestone in a convoluted and long-running dispute.

In 2002 Peter Owens, along with his wife and brother, bought the six-unit Page Street building in the city’s Western Addition neighborhood. Shortly afterward, they gave the four tenants then in the property notice of their intent to “remove” the building from rental use, as permitted by the Ellis Act, a state law that allows an owner to take a property out of the rental market subject to certain limitations.

By 2003, all but one tenant had moved and the Owens sold the five empty units as tenancy-in-common units. A tenancy-in-common is not a condominium but rather a form of collective ownership of a building in which the owners agree, among themselves, to the separate use of individual units.

The one unit that was not vacant at the time was occupied by Canada, who was then in her 80s and had lived there for decades.

In 2005, represented by counsel, she made a deal with Owens and received a “life estate” that allowed her to remain in the unit for the rest of her life, subject to several conditions. Among other things, the conditions required Canada to permanently reside in the unit as the sole occupant. She also had to keep the unit in good repair and not to commit “waste,” a legal term meaning to damage a property by ill-use or lack of maintenance.

Canada lived at the property until 2012, when according to Owens she began to live with family members. The condition of the property at that time, according to testimony of neighbors, was squalid. The court noted that “residents saw rotting food, trash, roaches, and dead and dying vermin caught in traps.”

The unit was cleaned and exterminated in in July 2012.

According to the court, there were many signs thereafter that Canada was no longer living at the unit. Packages stacked up outside, a smoke detector went off daily for more than a month, residents no longer saw or heard her, lights were left on for months at a time, food deliveries ceased.

A 2014 city inspection found the refrigerator was empty, there were large piles of trash and bags of old clothes, and all of the water in the toilet had evaporated, leaving it “bone dry.” The court noted that there was a “very strong and horrendous smell.” The kitchen calendar displayed the month of July 2012.

In 2014, the TIC owners applied to convert the units to condominiums, but because Canada’s life estate was shown in the real estate records, the city required her signature on the application, which the applicants were not able to obtain.

Owens then took legal action to terminate the life estate on the grounds that Canada had violated the conditions that she reside permanently in the unit and keep it in good repair.

In March 2016, Owens obtained a court order terminating the life estate, but the next month, Canada obtained another hearing. At that time, Owens offered to settle the issue by reinstating the life estate if Canada signed the paperwork to let the condo conversion proceed.

Canada declined and appealed. The appeal was denied and in February 2017, San Francisco sheriff’s deputies removed her belongings and changed the locks.

Canada died in March 2017 at 100 years old and became a symbol for many local housing advocates of African American displacement from the Western Addition.

A new condominium conversion process was instituted thereafter. The planning commission refused to approve the conversion on a number of grounds, among them that “an elderly tenant has been displaced from her unit within three years preceding the application date.”

After the San Francisco Board of Supervisors declined to overturn the planning commission decision, the TIC owners sued the city, arguing that the commission had improperly refused to approve the conversion.

The trial court disagreed and the unit owners appealed.

The appeals court reviewed the determination of the planning commission that an “elderly tenant” had been “displaced” in the relevant time period. The court concluded that Canada was an elderly tenant, but she had not been displaced.

The court found that while the term “displaced” was not defined in the law, the dictionary provided that it means “to remove from the usual or proper place” or “to move physically out of position.”

The court then determined that beginning in 2012, Canada was no longer living alone in the unit and she was cared for by relatives in their homes outside of the city.

While she continued to keep her furniture and belongings in the unit, she was there only occasionally. The fact that Canada continued to vote in San Francisco and in 2016 had held a 100th birthday party in the unit did not change that conclusion.

The court also rejected the city’s other arguments and ordered the planning commission to approve the condominium conversion.

John Cote, a spokesperson for the San Francisco City Attorney said, “We’re disappointed in this decision. We’re reviewing the court’s order and weighing our options.”

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