Real Estate Investor at Center of Oakland's 'Moms 4 Housing' Standoff Hit by State With $3.5 Million Penalty for Unlawful Evictions

California Attorney General Rob Bonta on Wednesday announced a $3.5 million judgment against real estate investment firm Wedgewood — known for its 2019 standoff with Oakland activist group Moms 4 Housing — over accusations it unlawfully evicted tenants from foreclosed houses.

The Redondo Beach-based company, which describes itself as an "acquirer of distressed residential real estate," allegedly used a variety of illegal tactics to push out existing tenants in order to quickly fix up and resell — or "flip" — the properties for profit.

"Unfortunately, for too many Californians, their home has been ripped away from them, while others live on the precipice of eviction," Bonta said at Wednesday's press briefing, underscoring the importance of housing laws and tenant protections. "But even amid this crisis, there are some who pursue profits over the interest of families and, worse, profits over the law."

As the property owner, Bonta said, Wedgewood deprived tenants of their legal right to continue living in their homes under preexisting leases for at least 90 days after foreclosure. The company's alleged tactics included evicting tenants without just cause in rent-controlled jurisdictions, filing false declarations to support unlawful evictions and failing to provide essential utility services to tenants, he said.

"When you break the law, you will be held to account. There will be consequences," said Bonta, touting his office's recent housing initiatives.

Wedgewood drew national attention in 2019 when activist group Moms 4 Housing occupied a then-vacant house in West Oakland and remained there for several months before being forced out in a court-ordered eviction. The firm eventually sold the property to a community land trust, which offered some of the activists involved access to the property.

Although Bonta noted that Wedgewood, under certain conditions, is legally entitled to evict tenants, he said the company's business model of rapidly buying, renovating and reselling properties often resulted in tenants being pushed out faster than the law allows.

According to the complaint from Bonta's office, Wedgewood often filed eviction lawsuits against absentee homeowners who had lost their properties to foreclosure — as opposed to the current tenants — and used that "as leverage to either pressure or remove tenants who were lawfully residing on the property."

"We will be flipping Wedgewood's business model on its head, ensuring that tenants of its homes are afforded full protection under the law," Bonta said. "If you are breaking our housing laws, I suggest you reconsider. Californians deserve better and I promise you, this is just the beginning. We will do everything in our power to hold those who violate our housing laws, and all laws, to account and bring them to justice."

While part of the settlement, which Wedgewood has agreed to, awaits court approval, the firm must pay $2.75 million to wrongfully evicted tenants and $750,000 in civil penalties and programs that support tenants or help combat homelessness.

The company also must submit regular updates to the attorney general’s office to demonstrate compliance with eviction laws, provide adequate notice and compensation to tenants when properties are sold, and educate its staff on tenants' rights.

In an unsigned statement sent from a generic company email, Wedgewood denied any wrongdoing.

"Ultimately, Wedgewood made the business decision to reach a settlement and move forward with our ongoing commitment to revitalize and recirculate residential properties back into California’s housing supply, creating thousands of homeownership opportunities across the state," the statement said.

For Oakland Councilmember Carroll Fife, who formerly led a grassroots group that supported Moms 4 Housing, Wednesday's announcement came as a welcome surprise.

"I'm excited that there's been some action by the attorney general to listen to what the people's legal teams have been saying, which is there needs to be attention to how Wedgewood operates in California," she said. "And it's a big deal because we also will utilize this as evidence that we will hold you accountable if you're engaged in practices that harm tenants."

KQED's Tara Siler and Erin Baldassari contributed reporting to this post.