Neighbors shocked to find out their street has been sold for $90K

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The wealthy residents of San Francisco’s tony Presidio Terrace have initiated a law suit in the battle to take back their street, which was literally sold right out from under them through an online auction in April of 2015 for just over $90,000.

The homes in Presidio Terrace are all worth millions, but after the neighborhood’s homeowner’s association failed to pay a $14-a-year property tax — which is something owners of all 181 private streets in San Francisco must do — the city’s tax office eventually put the property up for sale at the cost of $994 in an online auction in its efforts to regain the unpaid back taxes, penalties, and interest.

A four-floor San Francisco mansion at 26 Presidio Terrace was recently on the market for $14.5 million; and 30 Presidio Terrace, a neighbor in the gated community, last sold for $9.5 million.

Bay Area real estate investor Michael Cheng and his wife Tina Lam bid $90,100 for the street, which had been managed by the homeowner’s association dating as far back as 1905; now, they own the sidewalks, the street itself and other areas of “common ground” in the private development, the San Francisco Chronicle reported.

Oval-shaped and sealed off by a gate, the famous neighborhood has been home to notable residents, including Sen. Dianne Feinstein and House Democratic leader Nancy Pelosi.

Cheng says that his new neighbors are not taking the situation very well. “I thought they would reach out to us and invite us in as new neighbors,” he told The Associated Press. “This has certainly blown up a lot more than we expected.”

Scott Emblidge, the attorney for the Presidio Homeowners Association, sent a letter to the city stating the owners failed to pay the city’s bill because it was mistakenly being sent to the address of an accountant who hadn’t worked for the homeowner’s association since the 1980s, according to news reports.

Emblidge further noted that the residents had no idea their street was put on the auction block, let alone sold, until May, which was when a title search company hired by Cheng and Lam reached out to ask if any of the homeowners wanted to buy back the property in a shakedown scheme they are none too happy about.

In addition to selling the property back to the outraged residents of Presidio Terrace, Cheng and Lam are reportedly considering several different ways to make their investment bear fruit, such as charging the homeowners to pay to park on their street.

“As legal owners of this property, we have a lot of options,” Cheng stated, noting that he’s not made a decision yet, as he’s likely waiting for the highest bidder to step up.

However, if the homeowners — who petitioned the Board of Supervisors for a hearing to rescind the tax sale — have their way, he won’t get a penny. The board has scheduled a hearing for October. In addition to that, the homeowner’s association has also sued Cheng and the city, seeking to block the couple from selling the street to anyone while their appeal to the city is pending.

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