We all know that staying on top of your bookkeeping and taxes is important in order to avoid financial troubles.
Homeowners living in a very exclusive San Francisco neighborhood learned that lesson the hard way. According to The San Francisco Chronicle, after residents failed to pay a little-noticed tax, a South Bay couple bought their street and can now charge the homeowners rent to park their cars in front of their own houses.
The elite neighborhood is Presidio Terrace, a collection of mega-million-dollar mansions in a stone-gated community with a 24/7 guard. Previous owners in the exclusive community include Senator Dianne Feinstein (D-CA), House Democrat Minority Leader Nancy Pelosi (D-CA), and former Mayor of San Francisco Joseph Alioto.
The homeowners now find themselves in a strange situation as a chain of events has led to an outside couple from the South Bay area owning their subdivision’s streets and sidewalks.
The couple, Tina Lam and Michael Cheng, bought the street after it was put up for auction when the homeowners association failed to pay property taxes for 30 years. The failure to pay was the result of an incorrect address for an accounting firm since its change of location back the 1980s. The accounting firm’s location was bought out by a Pilates studio. The change was never updated in the records and the tax bills were sent to the wrong address for three decades.
The couple bought the street for $90,000 two years ago and have been looking into ways they might capitalize on their investment. In May, they approached the residents with an offer for them to buy back the street.
According to The Federalist Papers, the homeowners were understandably upset, as evidenced by the words of one anonymous homeowner, “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.”
The disgruntled homeowners appealed to the Board of Supervisors to negate the sale and return ownership back to the community, but it doesn’t look good. Because the sale occurred legitimately, due to unpaid taxes, and it’s been two years since the sale occurred, there’s very little legal action that can be taken.
According to a statement by a spokeswoman for the Treasurer-Tax Collector Jose Cisnero, the city did what it was supposed to and blames the homeowners for the mix-up. “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. There is nothing that our office can do,” as reported by The San Francisco Chronicle.
Lam has remained optimistic about the purchase and enjoys the sense of ownership. “I’m a first-generation immigrant, and the first time I came to San Francisco I fell in love with the city. I really just wanted to own something in San Francisco because of my affinity for the city,” she said.
If the residents show no interest in buying back the street, the couple has expressed an interest in charging them a “reasonable rent” to park on it. If the residents refuse to pay for parking, the couple could likely sell the spaces to individuals living outside the community.
It is an unfortunate situation for the homeowners. Though no one wants to pay fees to park in front of their own home, or be unable to park there because someone else paid for the spot, the fact remains the mix-up is due to poor bookkeeping and not paying attention to financial matters.
Paying taxes and ensuring that those payments are getting through is part of sound financial management. As evidenced by the mega-million-dollar mansions these individuals live in, one would think poor money management shouldn’t have been a problem for them.