S.F. condo rules snarl FBI agent’s plans

When Jennifer Wilson bought her first home, a condominium on Nob Hill, it seemed like a sound entry-level investment. The 39-year-old FBI criminal lawyer paid $473,000 for the grimy one-bedroom apartment, which she spent two years fixing up to the tune of $40,000.

But when the upwardly mobile federal employee was offered a promotion and move to Washington, D.C., and began looking into selling her apartment, she discovered that the unit was under a strict price control as part of The City’s Condominium Conversion Program, and that she couldn’t legally get more than $200,000 for the sale.

The program governs the conversion of rental apartments to condominiums. In order to maintain The City’s affordable housing stock, a certain percentage of each development must be sold below market rate. That so-called restricted housing can only be resold at its restricted rate, prescribed by the Mayor’s Office of Housing, not market rate.

According to Wilson and her lawyer, Timothy Flaherty, the unit should have been sold for about $180,000 to somebody who qualified for restricted housing. As an FBI agent and attorney, Wilson does not qualify.

Wilson bought the condo in March of 2004 in a probate sale after the original owner, Lola Jane Anderholm, died. Anderholm’s brother, Beuford Hopkins, listed the apartment with Pacific Union real estate company for $499,000, Wilson said. Anderholm had lived in the apartment since the late 1970s and bought it in the 1980s when it was converted into a condominium and dedicated low-income, according to Flaherty.

Photographs Wilson took at the time of the sale showed a dingy apartment with damaged paint, plaster, floors and windows, which Wilson repaired while she lived in the unit. The repairs cost $40,000 altogether, Wilson said, but she said she expected to recoup that amount in the sale.

According to a lawsuit Wilson filed against the brokers and seller last year — Leon and Polina De-Levi, Beuford Hopkins and McGuire Real Estate agent Kevin Campbell, who represented Wilson — they had two opportunities to tell Wilson about the restriction on the apartment, which they failed to do.

The restriction, according to the lawsuit, was indicated on the title report ordered by Pacific Union before the sale. The De-Levis and Campbell both reviewed the report, but neither alerted Wilson that the apartment was restricted and she did not qualify to buy it for the reduced price, the lawsuit alleges.

Brokers on both sides earned a commission of the sale. “The higher the price, the more money everybody makes,” Flaherty said Wednesday. “These are experts. They have duties toward Jennifer.”

Wilson said Wednesday that she would not be allowed to sell the apartment for much more than about $200,000. She said the last apartment sold in the building went for nearly $800,000. A search Thursday revealed several comparable, one-bedroom Nob Hill apartments listed for the same price.

In the lawsuit, Wilson claims a loss of about $500,000. “This could potentially wipe me out financially,” Wilson said Wednesday. I’m not even 40 years old and I’m looking at financial ruin.”

Attorney Alexander Weyand, who represents Pacific Union and the De-Levis declined to comment on the case Wednesday. Dennis Shanaghar, who represents McGuire and Campbell, did not return calls for comment. Neither did Beuford Hopkins, who sold the apartment to Wilson.

Conversion law

The Old Law: The condominium conversion law, passed in 1980, required a percentage of apartments converted to condominiums in a building to be sold for below market rate.

The New Law: A 2002 inclusionary housing ordinance requires all new developments to include low- to moderate-income units. It prevents full condo conversions of large apartment buildings.

– Source: Mayor’s Office of Housing

After losing promotion, woman's only course of action was lawsuit

A woman who inadvertently bought a designated below-market-rate apartment at market rate has little recourse and is one of few people this happens to each year.

Jennifer Wilson has very little choice but to sue everyone involved, a process that has already cost her a “dream job” at the FBI.

According to Doug Shoemaker, the housing development director for the Mayor’s Office of Housing, Wilson is doing the only thing she can in order to recoup her losses. “That’s what we encourage people to do,” he said Thursday. “Based on what our staff has seen over the last couple of years, we think it happens once or twice a year that someone comes forward with something like this. From our perspective, this is a real problem that the companies are not catching these restrictions, and it [the onus] is on them.”

Wilson, an FBI agent and lawyer who heads the bureau’s legal team in the San Francisco field office, discovered in 2006 that the apartment she bought at market rate in 2004 was restricted under a 20-year-old condo conversion program, meaning she can’t sell it for its current market value, or anything above roughly $220,000.

Wilson made the discovery after she put in for a promotion in early 2006. She applied for a job she described as a “lateral promotion” to the criminal division at FBI headquarters in Washington, D.C.

“It would have been a very good career move for me,” Wilson said. “I wanted that position. I wanted to work for that division chief. It was honestly the one job I was interested in going back there for.”

But because of the unfolding financial nightmare surrounding her apartment and subsequent lawsuit against the brokers and seller, Wilson had to turn down the promotion, a move the FBI penalized by preventing her from applying for any other promotions for a year.

“I couldn’t support this, support litigation and support myself in D.C. … It’s been the most emotionally difficult, stressful thing I’ve ever been through, so I couldn’t imagine trying to start a new job.”

Shoemaker said his office is working with Wilson on her next move, but she’ll have to vacate the apartment eventually so that it can be sold to someone who qualifies for the controlled rate.

amartin@examiner.com

Staff Writer Josh Sabatini contributed to this report.


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