Thanks to a little-noticed auction sale, a South Bay couple are the proud owners of one of the most exclusive streets in San Francisco — and they’re looking for ways to make their purchase pay.

Tina Lam and Michael Cheng snatched up Presidio Terrace — the block-long, private oval street lined by 35 megamillion-dollar mansions — for $90,000 and change in a city-run auction stemming from an unpaid tax bill. They outlasted several other bidders.

Now they’re looking to cash in — maybe by charging the residents of those mansions to park on their own private street.

Those residents value their privacy — and their exclusivity. Past homeowners have included Sen. Dianne Feinstein and her financier husband, Richard Blum; House Democratic leader Nancy Pelosi; and the late Mayor Joseph Alioto. A guard is stationed round the clock at the stone-gate entrance to the street to keep the curious away.

So imagine the residents’ surprise when San Jose residents Cheng and Lam wound up with the street, its sidewalks and every other bit of “common ground” in the private development that has been managed by the homeowners since at least 1905. That includes a string of well-coiffed garden islands, palm trees and other greenery that enhance the gated and guarded community at the end of Washington Street, just off Arguello Boulevard and down the hill from the Presidio.

“We just got lucky,”said Cheng, a real estate investor.

The homeowners, however, are crying foul and want the Board of Supervisors to negate the sale.

The couple’s purchase appears to be the culmination of a comedy of errors involving a $14-a-year property tax bill that the homeowners association failed to pay for three decades. It’s something that the owners of all 181 private streets in San Francisco are obliged to do.

In a letter to the city last month, Scott Emblidge, the attorney for the Presidio Homeowners Association, said the group had failed to pay up because its tax bill was being mailed to the Kearny Street address used by an accountant who hadn’t worked for the homeowners since the 1980s.


Two years ago, the city’s tax office put the property up for sale in an online auction, seeking to recover $994 in unpaid back taxes, penalties and interest. Cheng and Lam, trawling for real estate opportunities in the city, pounced on the offer — snatching up the parcel with a $90,100 bid, sight unseen.

Since the purchase in April 2015, the couple have been quietly sitting on the property, talking to a number of land-use attorneys to explore their options.

“We were looking to get title insurance so it could be marketable,” Cheng said.

He and his wife see plenty of financial opportunity — especially from the 120 parking spaces on the street that they now control.

“We could charge a reasonable rent on it,” Cheng said.

And if the Presidio Terrace residents aren’t interested in paying for parking privileges, perhaps some of their neighbors outside the gates — in a city where parking is at a premium — would be.

Unsurprisingly, the residents were more than a little upset when they belatedly found out what had happened.

They didn’t learn that their street and sidewalks had been sold until they were contacted May 30 by a title search company working on behalf of Cheng and Lam, said Emblidge. The title search outfit wanted to know if the residents had any interest in buying back the property from the couple, the lawyer said.

“I was shocked to learn this could happen, and am deeply troubled that anyone would choose to take advantage of the situation and buy our street and sidewalks,” said one homeowner, who asked not to be named because of pending litigation.

Last month, the homeowners petitioned the Board of Supervisors for a hearing to rescind the tax sale. The board has scheduled a hearing for October.

In addition, the homeowners association has sued the couple and the city, seeking to block Cheng and Lam from selling the street to anyone while the city appeal is pending — a move residents fear could complicate their efforts to reclaim the land.

The residents say the city had an obligation to post a notice in Presidio Terrace notifying neighbors of the pending auction back in 2015 — something that “would have been simple and inexpensive for the city to accomplish.”

Treasurer-Tax Collector Jose Cisneros’ office says the city did what the law requires.

“Ninety-nine percent of property owners in San Francisco know what they need to do, and they pay their taxes on time — and they keep their mailing address up to date,” said spokeswoman Amanda Fried.

“There is nothing that our office can do” about the sale now, she added.

Fried said that as far as she knows, the Board of Supervisors “has never done a hearing of rescission” — and that because it’s been more than two years since Cheng and Lam bought the property, it could be tough to overturn the sale now.

As for the threat to charge them for parking, the residents suspect it’s part of a pressure campaign by the couple to force the homeowners association to shell out big bucks to buy back the street.

The couple, however, say they’re in no hurry to sell.

“I’m a first-generation immigrant, and the first time I came to San Francisco I fell in love with the city,” said Lam, an engineer in Silicon Valley who was born in Hong Kong and came to the U.S. for college.

“I really just wanted to own something in San Francisco because of my affinity for the city,” Lam said.

There’s a bit of irony in the couple’s purchase. Until a 1948 U.S. Supreme Court ruling banning the enforcement of racial covenants, homes in Presidio Terrace could be purchased only by whites.

“The more we dug into this,” said the Taiwan-born Cheng, “the more interesting it got.”

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I liked the fact the couple have been quietly sitting on the property for a couple of years...much harder to overturn/set aside the sale when it is that old

I hope they charge more for parking spaces if the house is worth more. I mean, that's what the dirty commies in San Francisco would want, right? To pay their "fair share."

Cosmic irony.

quote:

I mean, that's what the dirty commies in San Francisco would want, right? To pay their "fair share."

I don't know. Seems like typical liberal hypocrisy. They clearly didn't want to pay their $14 per year tax bill.

Just think of what you could do. They also own all the common areas. Rent the common areas for $1000/ day for protestors, mimes, food carts, whatever. Given the houses would rent for $100+/sq.ft./mth. should a parking spot cost any less? Teach the damn commies what capitalism looks like. You want a guard house on common area, guess what?

Ken

I think an outdoor music venue would fit with the neighborhood. Perhaps something along the lines of a large tent hosting a TWERK CONTEST or perhaps a stage for aspiring young rappers. Of course just parking a pickup truck in the neighborhood after 5:00 pm could cause quite an uproar.

I would setup a hobo camp to fuck everyone on that street. But that's me.

Enough land to have 120 parking spaces in San Francisco and the property tax bill is only $14.00 a year?

It's hard to know what exactly happened. I doubt the homeowners ignored a bill for taxes, or that the tax was that low. One possibility is that maybe they missed a deadline, incurred a penalty, and because they are big shots, fugured it would be washed away somehow.

There is an entire industry in Whackyland that follows delinquent tax notices very closely. Decades ago, there would be a handful of shabbily dressed older men at these sales, sitting there with the ad listing, pen or pencil in hand while the county auctioneer drones on endlessly. Now the sales are better attended, the bidders more organized, the curse of a more efficient market. Lenders sometimes fail to advance the taxes and lose the defaulted property to a tax sale after 5 years of ball dropping.

A great many of the parcels are orphans, not really useable except as an adjunct to some other parcel, a closed street that was left off a deed description and forgotten. Private streets are not common. Maybe the private road was in the name of all the parcel owners, a title nightmare.

There will be a bunch of young very well dressed lawyers crawling all over the property tax and default sale statutes, looking for some omission, a loophole, an ambiguity.

I wonder if the lucky buyers were able to get title insurance.

This message has been edited. Last edited by: JALLEN,

It's funny how people get joy out of rich people getting screwed. I'm pretty sure if something happened like this in your neighborhood you would be pissed, I know I would be.

this was the talk of the office the yesterday. I work in SF for a lender and If any of those 35 homes is worth less than 5mm I'd be surprised. Those rich folks will likely bury them in legal filings but if they can hold out I think the city and the courts will tell the HOA too bad so sad we followed our rules, you didn't. They didn't get title insurance on the tax sale and have been sitting on it for 2 years while consulting their land use lawyers. I suspect to further run out the clock on any chance the HOA can appeal. My suspicion is that a special assessment is coming to the homeowners to buy these folks out. Not sure why they ever made a public issue out of it. I would have encouraged the HOA to quietly pay them their ransom and moved on. Don't answer the phone call from the newspaper.

quote:

It's funny how people get joy out of rich people getting screwed.

How exactly were the homeowners "screwed"?

quote:

Originally posted by 1s1k:
It's funny how people get joy out of rich people getting screwed. I'm pretty sure if something happened like this in your neighborhood you would be pissed, I know I would be.

I think your scolding is misplaced.

It's not about rich people, specifically. It's about a little turnabout for rich, arrogant, protected people.... the type of people who are wealthy enough to always be shielded from negative consequences of anything, no matter how much what those rich people advocate costs ordinary people. Look at the list of homeowners on this street again.

I think they should install a halfway house for drug addicted illegal aliens with gender issues. That's a very vulnerable population, you know.

quote:

Originally posted by a1abdj:

quote:

It's funny how people get joy out of rich people getting screwed.

How exactly were the homeowners "screwed"?

He's calling us all hypocrites for idly thinking of amusing things for the new street owners to do.

Absolutely nothing has *happened* in reality, so we're only (hah) guilty of badthink.

quote:

Originally posted by JALLEN:
“We could charge a reasonable rent on it,” Cheng said.

And if the Presidio Terrace residents aren’t interested in paying for parking privileges, perhaps some of their neighbors outside the gates — in a city where parking is at a premium — would be.

Thats my favorite part.

How would you possibly be dumb enough to buy a property on a private street without a homeowners agreement or monthly fee to maintain said street? Just plain ignorance on the buyers and their realtors.

Mr. Allen-IIRC, you were perhaps a RE lawyer in California? At least versed in CA RE law?

I'm aware of the term "adverse possession", although I probably have an imperfect understanding of it. How would that come into play in this matter? Thanks in advance.

quote:

Originally posted by Opus Dei:
Mr. Allen-IIRC, you were perhaps a RE lawyer in California? At least versed in CA RE law?

I'm aware of the term "adverse possession", although I probably have an imperfect understanding of it. How would that come into play in this matter? Thanks in advance.

Adverse possession applies where someone is in actual and open possession of real property openly, notoriously, exclusively, under a claim of right or color of title hostile to the true owner for a period of five years, and made payment of all taxes assessed against the property during at least a five-year period.

Adverse possession really doesn't come into play here. Until the tax sale, there was no claim of ownership other than the true owners.

I see. I guess it is an exacting specification; that is, not presumptive (say, the homeowners *thought* the HOA was doing their part and they understood the street was part of the various fees they paid). I know that doesn't square the taxes not going where they were supposed to, but it does seem it meets at least the claim of right and the exclusivity, were it gated.

I have read where people have made or used paths across other's land and when contested, held to be now a public easement. That doesn't seem to meet the definition of adverse possession, so what is that defined as? Thank you again.