Rich SF residents shock: Someone bought their street (home, buying)

[Commonproject]

it's funny because the Asian guy that bought it is one of the top contributors on Quora in real estate.

[mysticaltyger]

Originally Posted by Three Wolves In Snow

I find this incredibly hilarious:

Rich SF residents get a shock: Someone bought their street - San Francisco Chronicle


Were that me, I'd be using that money for good...let those rich folks actually pay for something worthwhile. I hope this couple uses the money for good, but even if they don't, this cracks me up.

Anyway, what do others think about this?

My thought was "the insanity never ends".

[mysticaltyger]

Originally Posted by davidt1

You make it sounds like the couple are some kind of scammers. They were just one of many bidders in the city auction. They happened to outbid the others and won. If anybody is to be blamed here, it's the people who didn't pay the taxes for years, or the city for not making an attempt to notify the homeowners of the auction.

They're not quite scammers. But there's what's legal, and there's what's ethical. The couple isn't doing anything illegal, but ethical? Eh, I don't think so. That said, the homeowners were negligent and so was the City. The City was also unethical in the way they went about notifying homeowners. As is often the case, there's a lot of bad behavior all the way 'round.

[UNC4Me]

It'll be interesting to see if the couple figures out a way to make money by owning the street. And they better hope they can do so before the street needs maintenance or even worse repaving. They're now on the hook for keeping the road properly paved as the owners of record and repaving is pricey.

One other question - does SF really tax undevelopable land? When we took over the HOA in my neighborhood, the city gave us a tax bill for the common areas. Our real estate attorney laughed and told us they try that with all new developments hoping they don't know that undevelopable land isn't taxed. The city can only tax on zoned land specifically platted for future development. Since the common area didn't meet those criteria they had to negated the bill and remove the land from the tax rolls.

Maybe someone familiar with SF tax code knows how SF taxes in regard to this type of land.

[NoMoreSnowForMe]

Originally Posted by UNC4Me

It'll be interesting to see if the couple figures out a way to make money by owning the street. And they better hope they can do so before the street needs maintenance or even worse repaving. They're now on the hook for keeping the road properly paved as the owners of record and repaving is pricey.

One other question - does SF really tax undevelopable land? When we took over the HOA in my neighborhood, the city gave us a tax bill for the common areas. Our real estate attorney laughed and told us they try that with all new developments hoping they don't know that undevelopable land isn't taxed. The city can only tax on zoned land specifically platted for future development. Since the common area didn't meet those criteria they had to negated the bill and remove the land from the tax rolls.

Maybe someone familiar with SF tax code knows how SF taxes in regard to this type of land.

Goes to show just because you pass the bar exam doesn't mean you know all the laws or have common sense. Unless it's public property (city, county, state, federal), somebody owns it privately. All private property gets taxed, whether there's anything on it or not. The land gets assessed separately from the improvements and both get taxed accordingly.

Just for fun, if we pretend they actually did get ownership of the street and common area, they would then have to give easements to all of the property owners because there would be no other way in or out of their property.

This would require lots of legal work, drafting documents showing easements owned by each owner to enter and exit each separate property affected. So, they'd have to draw up a plot of the street they "own" that is broken up into little bits in-between each private property LOL. And if they decide to open up the street and people park in a way that blocks the private owners from using their legal easements, they'll probably get sued. A lot.

And in order to use the landscaped area - looked like there was an island of sorts in the middle of the street - they'd have to do it within the building code. Doubt they could build on it or do anything lucrative with it.

There isn't normally any type of law that would require the easement to be maintained by the person who gives the easement, though, so they probably wouldn't have to actually take care of the paving, etc.

[NoMoreSnowForMe]

Originally Posted by Commonproject

it's funny because the Asian guy that bought it is one of the top contributors on Quora in real estate.

That is funny.

[oldtrader]

Lets look at the know facts.

1: Home Owners Association failed as required by law, to notify the city/tax office, when they changed the address to send the tax bill to. The did not do so for 30 years. Annually the tax bill was sent to the address of record. and returned to the tax office. The fact the HOA did not get the tax bill due to the HOA negligence.

2: The city tax office sent the notice of pending sale to the address of record. They advertised the sale of the property, as required by law. That is how a number of bidders, found out about the sale including the couple that bought it.

3: The property was auctioned as required by law, and sold to the highest bidder.

4: The sale became final,. one year after the sale, which is when the buyers received the deed for the property they bought. A lot of people bid on and buy tax sale property, and it is paid off with a substantial interest payment to the one that bought the tax deed. They do this, as it gives them a much higher return on their money than putting it into a bank or other investment. Only rarely does the actual tax sale end up with the tax sale winner getting the property.

As the couple said, they could do nothing until the year was up and they received the deed from the city. Some people actually make their living, if they have the money to invest and get such a good return on their investment, buying up property at tax sales. They rarely get title to the property, but the interest rate sure beats the bank interest.

The couple should now be paid for the property they bought. The Home Owners Association should have insurance to protect them for errors such as this, and this insurance company would be the one that has to buy the property from the couple.

Don't blame the couple. Blame a bunch of rich people and the management of the HOA who were responsible for creating this problem.

[austin-steve]

Originally Posted by oldtrader

...

Don't blame the couple. Blame a bunch of rich people and the management of the HOA who were responsible for creating this problem.

That's the bottom line.

[oldtrader]

Originally Posted by NoMoreSnowForMe

Just for fun, if we pretend they actually did get ownership of the street and common area, they would then have to give easements to all of the property owners because there would be no other way in or out of their property.

This would require lots of legal work, drafting documents showing easements owned by each owner to enter and exit each separate property affected. So, they'd have to draw up a plot of the street they "own" that is broken up into little bits in-between each private property LOL.

No they would not have to give an easement to each of the property owners to use the property.

It does not have to be done by easement. It could be made a toll road. There would be a monthly, or annual fee to use the street by the occupants, with each vehicle paying the fee, and having a sticker to show they have the right to use the road. And it could charge a fee, for each car without a sticker to use it each time they went over the road. Walkers could have to pay a fee, to walk on the property, going to and from the gate and the houses.


And if they decide to open up the street and people park in a way that blocks the private owners from using their legal easements, they'll probably get sued. A lot.

This could easily be handled, by marking designated parking spots such as done in parking lots. Each would have a number, and those leasing the parking spot on an annual basis, would be issued the spot by number. The home owners could keep the area in front of their home free of cars, by an annual lease of the parking spaces.

And in order to use the landscaped area - looked like there was an island of sorts in the middle of the street - they'd have to do it within the building code. Doubt they could build on it or do anything lucrative with it.

This could easily be turned into more parking spaces to lease out. Additional income. In fact there would be more potential income from the parking spaces than building on it, at San Francisco parking rates.

These type of things are never going to happen. Those property owners are going to get together before this is over, and buy their way out of a problem their HOA caused by not following the laws and notifying the taxing authority of the change in the address and their not paying the taxes as due. They created the problem due to negligence, and now must pay to make the problem go away. This type of thing happens every year all over the country, and only made the news due to who the homeowners are, and the size of the home.

These home owners are not going to want to be fighting in court, and all the publicity they will get, plus the huge attorney fees they would run up. It will be cheaper to pay up and settle, than to run this out to the end. If they lose which is a strong possibility, it will cost them more in the long run than to just settle soon, plus all the unfavorable publicity that would be involved.

[NoMoreSnowForMe]

Originally Posted by oldtrader

These type of things are never going to happen. Those property owners are going to get together before this is over, and buy their way out of a problem their HOA caused by not following the laws and notifying the taxing authority of the change in the address and their not paying the taxes as due. They created the problem due to negligence, and now must pay to make the problem go away. This type of thing happens every year all over the country, and only made the news due to who the homeowners are, and the size of the home.

These home owners are not going to want to be fighting in court, and all the publicity they will get, plus the huge attorney fees they would run up. It will be cheaper to pay up and settle, than to run this out to the end. If they lose which is a strong possibility, it will cost them more in the long run than to just settle soon, plus all the unfavorable publicity that would be involved.

You're right, it's never going to happen, but I believe you're incorrect regarding easements. Property owners must have access to their properties if there is no other means of ingress and egress, and they can't be held hostage for payment:

Easement by Necessity

An easement is a right to use the property of another. An easement by necessity is an easement that is created when the owner of a landlocked parcel has no access to a public right of way such as a street or highway. An easement by necessity arises by operation of law only if two strict conditions are met: (1) there is a strict necessity for the right-of-way such as owning a landlocked parcel with no access to a public right of way; and (2) at one time, the landlocked parcel and the parcel over which the right-of-way is sought, were owned by the same person(s).

And I still go back to the city not following state law requiring proper notification of all interested parties. If they didn't properly notify all interested parties, the sale was improper.

The law says nothing about anyone paying the buyer interest, if it is determined that the sale was improper. The law says the tax collector refunds their money. That's it. Then, obviously, the bill gets paid to the tax collector by the HOA.