On April 23, 2014, the City Attorney sued Darren and Valerie Lee for illegal conversions and unlawful business practices. The Lees Ellis Act evicted disabled tenants to illegally convert residential apartments into tourist lodging.
As the news release read:
“According to one of Herrera’s civil actions, defendants Darren and Valerie Lee purchased 3073-3075 Clay Street in 2004, and invoked the Ellis Act in 2005 to evict their tenants from both of the property’s residential units. One of the evicted tenants was disabled. Evidence presented in the complaint found that the Lees have marketed 3075 Clay Street, a four-bedroom, three-bathroom property, for tourist lodging on such vacation websites such as Homeaway.com and VRBO.com since 2009, describing it as an “exquisitely renovated home, in prime Pacific Heights.” The Lees charged their guests between $395 and $595 per night for a minimum stay of three nights. But in doing so, the owners flouted the city’s required conditional use authorization process—depriving neighbors and city planners of their role to first determine whether the conversion is necessary or desirable; compatible with the neighborhood; detrimental to the City’s housing stock; or consistent with the city’s Planning Code or Planning Department’s General Plan. According to Herrera’s complaint, San Francisco’s Planning Department repeatedly cited the Lees for their illegal use of the property for commercial tourist lodging, even collecting penalties of as much $250 per day for violations. The Lees—who at one point assured Planning Department officials that their illegal conduct had stopped—then defiantly resumed marketing and renting their property to tourists. In 3073 Clay Street, the Lees evicted a disabled tenant who had lived in the unit for more than ten years and, until evicted, was paying $1,087 per month. By invoking the Ellis Act, the Lees were legally restricted until August 25, 2011, from re-renting the unit at market rate. But evidence presented in Herrera’s action shows that the Lees admitted to the Planning Department that they had, in fact, re-rented 3073 Clay Street and charged their new residential tenants between $5,000-$7,038 per month."
Besides defying the planning department’s orders, the Lees consistently get one star reviews on yelp:
"My partner and I rented an apartment from Valerie Lee. We paid our security deposit and when we moved out a year later, she refused to return it. We spent months trying to get her to return our calls and to return our deposit. We went by her business address on Mission Street multiple times and were always told that she was not there.
My partner and I are both attorneys, so we decided to sue her in small claims court and were successful. In preparation for the hearing, I searched the public records database at the civil courthouse (400 Mcallister) for other cases in which she or her brother (Kevin Lee) had been involved. I found 14 cases in San Francisco! Most of the cases were related to her refusal to return renters' security deposits. Other cases involved their refusal to make necessary repairs, refusal to pay contractors, bad checks, fraud, and breach of fiduciary duty."