Pierre v. Cox

Description

Jury trial to resolve claims that an Oakland landlord improperly attempted to cause 13 tenants at the Monte Cresta Apartments to terminate their tenancies, by rent increase and disruptive management and construction practices at the property.

According to plaintiff attorney Steve McDonald, "The defendant had a business plan when he purchased the apartment building where the tenants lived. And this plan included forcing the tenants out so he could raise rents and increase the property value. The plan was that he would push for this huge rent increase. He would subject the tenants to living in a construction zone. He would mismanage the property while doing so. And he would implement an unfair dog policy."

According to McDonald, the landlord purchased three apartment buildings at the same time. Two of the buildings were financed with low-interest 30-year loans. But the Monte Cresta apartments were financed with a 10.5% interest, two-year loan. McDonald contended that the landlord chose the expensive monthly financing so as to hike his tenants’ rents, claiming the expense as justification.

"The plan," said the plaintiffs' attorney, "was to use his 10.5% loan as a pretext to increase the tenants rents. A debt service increase would be far greater borrowing from a hard money lender than if he went to a traditional lender or got a different loan with a lower interest rate."

Defense attorney Kurt Bridgman said that the landlord "was an extraordinary man. He followed the Oakland rent law as written. He followed all the Housing Codes. He fixed up a property that had suffered 40 years of deferred maintenance. And that really is the sin in the plaintiffs' eyes -- that he fixed a property that they all had complained about for years and years."

Bridgman said that the landlord had put over $1M into fixing up this property. The work was done by licensed contractors, and was permitted by the City of Oakland. The Oakland rent board approved that there was a need for the improvements and the amount spent.

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