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S.F. Tenant Forced Out by 315 Percent Rent Hike Wins $400,000 Settlement

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In March 2015, the owner of this Bernal Heights residence raised her long-term tenant's rent from $2,145 to $8,900 a month, with a $12,500 security deposit.  (Google Street View)

Updated 11:45 p.m. Tuesday, Jan. 17, 2017

It was a spark for instant outrage in the midst of a San Francisco rental market gone mad: A woman renting an apartment in Bernal Heights announced on Facebook one weekend in March 2015 that her landlord was increasing her rent from $2,145 to $8,900 a month. And her security deposit was going up, too -- from $1,500 to $12,500.

The tenant, Deborah Follingstad, was forced to move from her home of 11 years on Bocana Street, and her erstwhile landlord, Nadia Lama, moved in. But that wasn't the end of it.

Follingstad sued Lama, who had acquired the property through the distribution of a family estate.

In the August 2015 lawsuit, Follingstad and her lawyer, Joe Tobener, accused Lama of trying to get around a city ordinance that requires payments for tenants displaced in an "owner-move-in" eviction.


That litigation proceeded without gaining much attention -- until now.

Tobener announced Tuesday that, with a jury trial scheduled to begin next week, Lama had settled for the staggering-sounding sum of $400,000.

Tobener said the high settlement amount reflected both what he called Lama's "egregious" behavior in raising the rent and the risk Lama ran in allowing the case to go to trial, where a jury could award triple damages for his client's emotional distress claims.

"It's the highest constructive-eviction-by-rent-increase case we've ever had," Tobener said, adding that such cases typically settle for amounts "in the high five figures."

Tobener said that under the city's owner-move-in ordinance, Lama would have been required to pay Follingstad $9,522 for forcing her to move.

Lama sought to move in to the property early in 2015 after removing an illegal in-law unit that had been built at the Bocana Street property in the early 1990s. That would have had the effect of making the dwelling a single-family home and thus exempt by state law from local rent control statutes.

"Their defense was, hey, they took the lower rental unit off the market, they took out the kitchen, and therefore it became a single-family home, so they were allowed to increase the rent to whatever they wanted," Tobener said. "Our argument was, 'Look, you can increase the rent to market rate, but you can't raise it way above market rate to force someone out to get around the owner-move-in eviction protections.' "

Tobener said evidence made it clear Lama wanted Follingstad out simply so she could move in.

"The intent was there, the bad motivation was there, and a jury would have heard that if Nadia Lama had done this right, she could have done an owner-move-in eviction for $9,500. Instead, she took the unscrupulous path and caused the tenant a lot of stress."

For Follingstad, an acupuncturist, the outcome is bittersweet. She said Tuesday she was "shocked and super-pleased" with the settlement. But she added that events since she was forced to leave the Bocana Street in early May 2015 property have been difficult.

She spent more than a year couch-surfing and house-sitting inside and outside the city before she found a new apartment in San Francisco.

She said the housing challenge pales in comparison to her main preoccupation for most of the last year: breast cancer, which was diagnosed last May, a year after she left Bernal Heights.

"It was a really hard year on top of another really bad year," she said.

Follingstad, who has specialized in treating cancer patients in her practice, says she feels there is a connection between her illness and the stress of losing her home.

"Every cancer patient in the world would line up around the block to find out what it was that actually gave him cancer," Follingstad said. "But I can pretty much say that the stress and the depression and all of the anxiety that I went through upon that whole fiasco contributed to my cancer, if not caused it."

Follingstad said she completed chemotherapy in the fall and radiation treatment last month and that the settlement will provide her funds to pay medical bills.

Attempts to reach Lama on Tuesday were unsuccessful.

Her lawyer, Paul Sheng, said in an email that Follingstad's "allegations/theories about what defendant was trying to do were denied by defendant and were never proven."

He said the settlement was reached during negotiations with a private mediator.

"Both sides to the dispute reached a mutual and voluntary agreement to resolve the case in order to avoid the cost and uncertainty of further litigation," Sheng said. "The parties’ agreement specifically provides that they are settling disputed claims, with no admission or acknowledgement of any liability or wrongdoing by any party."

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