Couple that paid $90k for a private street in SF is forced to give it back
businessinsider.comThe transaction was fully legal and similar to hundreds of others in the area where investors buy properties with delinquent taxes. I would have more sympathy for SF and the families on the street if they were actually working to change the screwed-up bureaucracy that allowed this sale to happen. However, this seems to be a case where money talks. There's nothing to prevent it from happening again or to protect San Franciscans who don't have an in with the board of supes.
(Disclaimer: I work with Tina and can vouch for her character. The character assassination and racist comments leveled against her and her husband in other forums are dismaying.)
This is interesting; the couple bought the street which has a privacy gate - do they own the gate too? Is is possible that they owned the street but could not legally access it (by not owning the gate)? Does that affect the case/transaction? I'm not familiar enough with the details.
> Overhead View: https://www.google.com/maps/place/Presidio+Terrace,+San+Fran...
> Street View: https://www.google.com/maps/@37.788234,-122.4593631,3a,75y,2...
I don't what the specific details are in this case, but there may be an easement. Generally property owners are entitled to access their real property. For example, if an owner purchases a plot of land that has no access except by crossing another property there is an "easement by necessity" for the former owner to cross the property of the latter to access his property.
Whether the sidewalk owners can enforce it is another matter. (See also Kosla's jackassery around denying water access.)
Most places disallow disallowing access to property you own.
I don't have much personal sympathy for anyone involved in this story.
From a principled standpoint however, this appears to be a violation of property rights. It is highly unlikely that 'normal' people would've been able to reverse the transaction the way these residents did which makes me root for the clearly predatory real estate schemers.
There's no moral party here it's just a question of what type of society you want to live in. I'd rather have the laws apply uniformly regardless of wealth and political influence which led me to my decision.
I also lack sympathy.
But... I actually am a fan of the ability to reverse the transaction.
I'm absolutely sure that having people who are politically connected in the neighborhood was part of making that happen, and I'm just as sure that it would have been impossible for most people in the same situation.
But now that it has happened, people who lose their property via tax liens have something to point to in a last ditch effort to save their property. And given that these transactions are more dangerous today than they were yesterday, perhaps the prices that the auctions bring will be lower - meaning that maybe once in a while a regular joe will be able to pop in and get a deal.
That is another outcome that I'd be okay with. If this procedure weren't a one-off but a new standard then that would probably be a higher net benefit to society.
> clearly predatory real estate schemers
How are they predatory? They purchased a parcel of land on a government-approved website through a vetted legal process and followed all the rules.
Patent trolls generally follow all laws. There are all kinds of legal ways to make money that I find extremely distasteful.
With respect, this is not an argument, but a non-sequitur. I agree with you that legality and morality do not always align. However, if a legally binding transaction can be overturned simply because powerful people complain, then there is no such thing as a legally binding transaction.
I hope the couple win this case. It's totally a question of privilege. The notice being sent to the deceased bookkeeper is the adult equivalent of the dog ate your homework.
People who are out of work or live on a fixed income (i.e. more legitimate excuses for not paying your property taxes) lose their homes to tax auctions all the time.
There is a difference between losing your property because you can't afford the taxes and losing it because you didn't know that taxes needed to be paid and the state didn't bother to tell you.
The point is that there really isn't a difference for most of us. I've had a town send a tax bill to the wrong address, but there was still no way out of the penalty that accrued. We only discovered the problem when we realized we hadn't seen a tax bill in quite a while (it was still being sent to a previous owner).
I'm fine with penalties and late fees for people that don't pay on time because they didn't handle the paperwork properly. I'm not fine with their property being confiscated with no warning.
They told them based on the most recent address of the contact on record. Why should it be the responsibility of the tax collector to make sure this is up-to-date and accurate?
Because it's always the responsibility of the tax collector? Because the government is the least cost avoider?
I used to work for a title search company that contracted with counties within that state to handle tax foreclosure. In order to foreclose on property for delinquent taxes, certified mail had to be sent to the most recent known address, the delinquency had to be published in a local paper, and a notice had to be posted on the property itself. I believe this is more-or-less the norm.
I don't think it's the norm because it doesn't sound like most of these things happened in this case.
Also, I've participated as a bidder in one auction where I live in FL. There was no notice posted on the property. I don't know if the other things happened.
By the time it goes to auction it's already been foreclosed on.
It's way different where I live. There is no foreclosure before the tax deed auction.
Because the government exists to serve the people, not to rigidly enforce laws like a mindless automaton no matter the consequences.
I agree but what are the extenuating circumstances in this case? Was the person responsible off serving in the Armed Forces so they didn't get the notice?
Nope, actually it sounds like someone forgot to change their address seventeen years ago. How hard is this to take care of? Or hey, even for someone in the HOA to notice they haven't been getting a tax bill for the last 17 years.
The extenuating circumstance is that it's obvious to anyone that this was a clerical mistake not an inability or unwillingness to pay the bill.
People shouldn't forfeit their property without warning because of clerical mistakes.
Sorry I don't agree. The situation was one of the HOA's own making. The tax collector didn't make the mistake, the HOA did. That's how life works for most people. There are consequences for making mistakes.
Also, with regard to there being "no warning". Why wouldn't there be an assumption by the HOA that they owed taxes even though they weren't receiving a bill?
You can obviously believe whatever you want, but if you think that the consequences of failing to properly file a change of address form and then forgetting about a $14 annual bill should be that dire, that's pretty extreme.
What do you think the penalty for littering should be? The death penalty?
The practical effect of the penalty is relative to a person's ability to handle it.
Wealthy people having to pay their way out of an awkward situation caused by their own irresponsibility? I don't know the means of these people but based on where they live, it amounts to the equivalent of a speeding ticket.
Keep in mind, they aren't the only victims of their irresponsibility now. They have had to create this narrative of a bottom feeding couple trying to cheat them out of their street. It's character assassination and it's another reason not to feel sorry for them.
We don't asses penalties in this country based on the resources of the perpetrator. All are equal before the law (at least that is the aspiration. we obviously fall short in many instances.).
And besides, your idea is non sensical. We should confiscate their property knowing that they have the resources to get it back in order to induce some higher lawyer fees and a pain-in-the-ass factor as some kind of penalty increase? That's bizarre! That's not how government should work at all! It ends up being a waste of time and resources for a lot of people and, as you mention, draws in innocent 3rd parties who end up taking some of the heat.
If we actually wanted a higher penalty for richer people than there should just be a bigger fine or late fee.
Dude, you're presenting a straw man argument. This entire thread, I've been saying I don't want them to be treated differently.
YOU are the one defending special treatment. Isn't that what has happened here?! They've successfully lobbied the city to treat them differently than everyone else?
All I was saying is it's harder to feel sorry for them. If you really cared about this issue, I'm sure you could find REAL tragedies that aren't being heard by the city council every single time the city does these tax sales. Like actual families being evicted for "clerical mistakes".
I don't think anyone should have their property confiscated without warning for a clerical error. I think that everyone should be treated equally in that respect.
The article did say it was a $14 Million Dollar tax bill.
I think you misread it. The annual bill was $14, not $14 million.
I see this like I see a bug bounty. The bug is the fact that they were able to buy the property at all under those circumstances. Their bounty "reward" should be that they can keep the property that they rightfully bought. And now the public is aware of this problem ("bug") and can move to prevent it from happening in the future.
A bug bounty os a program run voluntarily by the owners of a service.
This is more like exploiting a security hole and then claiming a moral right to your gains.
They're claiming a legal right.
Use whatever adjective you want, the comparison still doesn't make any sense due to the involuntary nature of the situation.
It's not clear to me what they get out of owning the street (or is it just sidewalks?), and what the homeowners lose by not owning it.
Previously only owners of the surrounding houses could use the street. The new owners could have opened the street up for public use harming the privacy of the house owners. The plan of the new owners, if they had won, was to sell the street back to the house owners at a markup so that they could get their privacy back.
They could charge for parking, for example.
What's really shocking is that the tax bill for a private street in one of the hottest property markets in the world is $14/year.
It might be that being a private street, the residents are responsible for maintaining it. Like paving the road, sidewalks, sewer repair. Those things can be a substantial expense for an individual.
When I own a private house, I'm responsible for maintaining it. The government's not going to fix my roof when it leaks.
My tax bill, however, is still a bit higher then $14/year, for acres of land in the middle of a land-strapped metro area.
I'm sure the situation is the same for these people.
My house doesn't scarf up acres of land in the middle of a city, for $14/year.
This is a colossal subsidy.
I believe the $14/year property tax is for the private street, not the individual lots which go at a different rate.
Proposition 13 does indeed suck.
What's really shocking is that a "private street" is a thing.
I mean, if you own land, and a street is on it. It's private, yes?
A private street is not necessarily something glamorous. I live in a small townhouse community and our HOA owns a small street.
Why I say it's not glamorous is because we have to come up with ~$100,000 in the next 10-15 years to do major pavement replacement (not resurfacing or sealcoating), because this street is not maintained by the county. For a small townhouse community that has not been properly saving for major capital expenses like this, this is not fun.
Yes. I'm not objecting to the concept of putting asphalt on land you own.
What I find weird is the concept of "the only access to your own home is someone else's private street".
I think it was owned by something similar to a HOA. Because the HOA didn't pay a minuscule property tax bill, the private street went up for auction, and a private citizen purchased it. That private citizen now has the ability to charge the residents for use of the street, including the right to park in front of houses.
No. In most places I have lived in the USA, streets are not only public property but they regulate what can be placed within so many feet of the side of the road. So basically, they restrict your land use next to a road, even if you own the property. This is so they can add a sidewalk or expand the road at some point in the future.
Yes, most streets are public and maintained by local government. But anyone who owns sufficient land can build a private street on it. A piece of land doesn't magically become public just because you lay down some asphalt and start driving on it.
OP seemed to be asserting that owning a house implied owning the road in front of it.
So what you're saying is that most places where you lived had privately owned sidewalks.
What's so surprising about private roads, then?
Nothing. My only point was most roads are public.
I was referring to public side walks on the right of way not private ones.
If people have to live space on their private land for sidewalks, then when the city does build the sidewalks they are building privately-owned sidewalks.
The difference between public roads/sidewalks and private ones is called "public right of way". Google it. Chances are if you own property along a public street, you own the land to the middle of the street but for all practical purposes, it's controlled by the local government. You have to allow people to travel across your land. This includes sidewalks within the right of way area and they usually are within the right of way.
Is it that shocking that people may own real estate sold by the state?
I'm sympathetic to the idea that rich people are being treated differently here. That's almost certainly the case. It's also, of course, always fun to see a bunch of rich folks get some kind of comeuppance.
But, to me, it's also pretty clear that the original owners were in the right here. You shouldn't be able to lose something worth $90,000 because of a small administrative oversight without some kind of notice from the government about what is going on. The world shouldn't work that way for anyone, rich or poor.
> The world shouldn't work that way for anyone, rich or poor.
But it does. These types of "investors" exist in all markets, and they are about the real estate equvilant of shady debt collectors.
They buy properties that have delinquent taxes and once the city sells you it there are "no backsies" - the homeowner/whomever needs to now deal with the "investors" that bought the property from under them.
It's extremely common that those who owe those back taxes had no idea - or at least they claim so. That's never a defense I've seen hold up.
The problem is that the rich aren't paying the piper this time, and then changing the way things work. They are simply saying "eh, obviously that's wrong! fix it!" while completely ignoring the thousands of people affected in exactly the same manner each year.
Why is your solution to the problem making sure that everyone gets screwed rather than no one gets screwed?
That's not the solution. That's the bit that gets a real solution in place.
The current status quo is "you're screwed if you are not rich and/or politically connected, but it's not a big deal if you know people" - so absolutely nothing will change.
You must make "important" people feel the same pain as the little people or they will never care enough to take any amount of action.
Probably because it's better than "everyone that isn't rich gets screwed" which is the current situation.
But... They were given notice. Notice was sent to the record on file. What more do you want the government to do?
I don't think it's a comeuppance. More of a lack of empathy.
If you didn't receive a tax bill for your house one year. Would you just figure that you didn't owe taxes that year? Probably not, there is a minimum level of adult responsibility required to own property. Part of that is paying your taxes.
It being mailed to the wrong address is irrelevant. The HOA most likely had officers that didn't get the address changed at some point. Doesn't matter that it was 17 years ago.
This was a situation where a speculator saw an opportunity to get rich off an oversight, and it didn't work out. Hard to be too sorrowful about that.
Wouldn't mind seeing more of a penalty for the rich landowners, though.
This is unequal application of the law. If this were an unoccupied house and the bill was sent to the person on file for nearly 40 years, there would be no way out of the foreclosure for poor people. The fact is that the buyers followed the law and the wealthy did not.
The wealthy once again got a free ride from the system while working to put others in debt. This is what's broken in our system. The wealthy have the money and should have purchased the land back. Instead they used money to buy political favor. The rich probably paid more in legal expenses than just buying the land back. This is spite and exertion of power, money, and influence, plain and simple. If the rules don't apply equally to everyone, then why do they apply to anyone?
This is the biggest takeaway for me:
The couple didn't know what Presidio Terrace was when they bought it
They are, as the article explains, real-estate investors who do not always examine properties before purchasing them. The couple knew that Presidio Terrace was in a nice neighborhood and seemed to be very well-priced, and they also were bidding in many auctions, so that they probably would not have cared about precisely which properties they acquired.
And there were others bidding on it as well, it wasnt a secret these people just happen to win the auction.
I already understood their motivation and situation. But I still find it concerning.
Maybe it's the bitcoin effect, but when people start investing in things they don't know anything about, that sets off my alarm.
What alarm bells, out of curiosity?
There is always risk in investment and investing in property sight-unseen is perhaps very risky, but they felt like it was worth it to them. As the article said, sometimes you can sell off their investment for a profit. Other times, evidently, you can annoy the politically powerful.
As predicted. This isn't much of a surprise, really - there is too much money on the side of the homeowners to allow someone outside to own a piece of their area.
Forced to sell it back. This isn't the USSR.
Boo-hoo. That couple deserves the social karma coming to them.
I don't understand this perspective.
There was a process and the city followed it. Just because a group with wealth and power don't like that outcome doesn't mean it should be changed. They bought it fair and square and, to believe them because I have no reason not to, they didn't do ti with any sort of malice.
The suit against them by the homeowners seems entirely punitive and particularly harassing. Their issue is whether the city followed the process. If they are that concerned with fixing what is very obviously the screw up of an organization they fully own and run then they can pay to do so.
What sort of karma do the decades-delinquent homeowners deserve?
I'm ok with some karma for the deliquent homeowners, but I see no reason why this should turn into a giant cash prize for a private citizen.
I have noticed that people who support the buyers tend to point out the problem with wealthy and powerful people getting special treatment. I'm against that, but it doesn't remove my distaste for making money this way.
What did the buyers do that’s so awful? As far as I know, they were going to charge a reasonable rate for parking to cover maintenance and their $90,000 purchase price. It’s not like they were going to start charging a toll or something. They wouldn’t be legally able to anyway. Nobody was being forced to pay the buyers anything, they just had the option of paying to park.
What would you say should have happened here? I don’t see what else you could do with this land if you bought it. If the city didn’t auction it off, then why would anyone ever pay their taxes again?
It's clear that we disagree about the nature of this tax bill, why it wasn't paid, and whether it's appropriate for the government auction off private property under these circumstances.
The strongest argument I've read here on HN is that if the wealthy and powerful don't experience the injustice of their own laws, they won't change them - and that less connected and wealthy residents would not have gotten a similar rescue from government.
I’ll ask again, what do you think should have happened here? Auctioning off delinquent property isn’t great, but I have trouble coming up with something better.
So, what should have happened here? Not this.
OK, ok, you're asking, what should have happened, not what shouldn't have happened. I can't say it's a totally unfair question. It probably would be worth thinking this through.
But overall, I don't really feel like I need to propose a new a system for collecting minuscule delinquent property tax bills that doesn't involve selling off massively valuable property at auction to point out that this is a really bad and completely unnecessary outcome. Guess that's so obvious to me that I just don't feel inclined to engage with the question.
I think you do, at least if you want to convincingly argue that this shouldn’t have happened. The existence of a better way is decidedly non-obvious.
It’s not as if there’s a bunch of standard alternatives they could have used. Traditionally, taxation is enforced by garnishing wages, forcibly withdrawing money from accounts, seizing property, or putting people in jail. None of these were possible here except for seizing property. The only alternative I see is to just let delinquents get away with not paying taxes forever, which defeats the whole purpose of taxes.
For what, buying land that legally went up for sale when a laughably low tax went unpaid for 40 years? If this had happened anywhere else to people other than the ultra-rich, nobody would care and they'd be allowed to own it. This is nothing more than a demonstration of America being ruled by the whims of oligarchy rather than law.
Defective service is defective service. The tax bill was being being returned every year and the city made no meaningful attempt to contact the property owner before auctioning off the property.
The same result would have happened with anyone who could afford an attorney to pursue rescission of the sale.
A bureaucracy-induced property ownership spat between two groups of affluent people in a state that has defined limousine liberalism and a city which has personified it.