Judge Rules in Favor of Accused ‘Slumlord,’ Tenant Who Lived in Hazardous Apartment Evicted

A renter who has been fighting eviction and accused her landlord of subjecting her to dangerous and squalid living conditions lost her case in court Thursday.

Katherine—who has no job, no housing subsidy and asked to withhold her surname—has little more than a month to find a new apartment. Michael Lucich, her landlord, can now raise the rent-controlled unit to market rate and lease it to someone else.

“He’s putting people onto the street,” says Ly Huang, a friend of Katherine’s who has paid her rent since she lost her housing voucher last year.

Multiple tenants who live in the San Jose apartment building, located at 2125 Rexford Way, have labeled Lucich a “slumlord” in interviews with San Jose Inside. By measure of his repeated and egregious code enforcement violations, he fits the profile.

While he lives with his family in a multi-million dollar home in Los Gatos, Rexford Way tenants endure rodent and cockroach infestations, black mold, sewage leaks and hazardous electrical wiring.

As San Jose Inside reported earlier this week, Katherine accused Lucich of demanding rent hikes beyond the city’s 5 percent annual cap. She says he also retaliated against her by upping the rent after Huang confronted him about the illegal living conditions.

Santa Clara County Superior Court Judge Carol Overton seemed sympathetic to Katherine’s plight in court. She even admonished Lucich for glowering at her during Thursday’s hearing.

But the judge ruled in the landlord’s favor on a technicality.

On paper, Katherine agreed to move out by June. The deal—signed after mediation earlier this year—tasked Lucich with exterminating vermin, eradicating the mold and fixing the electrical problems. It also gave Katherine a deadline to move out.

Katherine argued that she didn’t have to move because Lucich failed to live up to his end of the bargain. But the agreement she signed didn’t make her move-out contingent upon Lucich’s compliance.

“I wouldn’t have let them sign that agreement,” said Shaunn Cartwright, founder of the South Bay Tenants Union, who attended the eviction proceeding. “It was an ‘and’ agreement, not an ‘if.’ It said, basically, she will move and he will clean the apartment, not she will move if he cleans the apartment.”

Had Katherine’s answer to the complaint included her allegations that the eviction was retaliatory, Cartwright said, she might have won the case. But Katherine had no attorney. Though the Silicon Valley Law Foundation helped draft her answer to the complaint, she had only a friend to help her through the rest of the process.

“My biggest takeaway from this is that there’s not enough avenues for tenants,” Cartwright said. “Tenants can’t afford lawyers, but the landlords can.”

Hours after San Jose Inside published a report about Katherine’s situation on Tuesday, city inspectors issued nine citations for code enforcement violations in her unit and four violations on the building’s exterior.

They told Lucich he has to remove the mold, fix the heater, get rid of rats and replace the floor and kitchen counters, as well as the stove’s electrical outlet. And yet, despite Lucich failing to keep his 12-unit apartment on Rexford Way up to code, he prevailed in court.

Lucich has repeated the same pattern for nearly two decades, raising the question of how the landlord will ever be held accountable.

When tenants complain, they say, Lucich retaliates. Every few years, he cycles through tenants, which allows him to reset the lease cost of his rent-controlled building to market rates. According to interviews with tenants, some pay upward of $2,000 to live in hazardous, illegal conditions.

In April of this year, San Jose enacted new renter protections, including an ordinance that requires landlords to cite one of a dozen approved reasons for ousting a tenant. Part of the idea was to prevent landlords from evicting someone just so they could raise the rent, which Katherine believes is exactly what Lucich did to her.

Lucich has denied her claims and blamed the building’s dilapidated state on his tenants. He said maintenance and repairs take up about 15 percent of the $250,000 in annual revenue he makes from the rental property.

But several of Lucich’s tenants say they’ve lost faith in the city’s ability to protect them. Over the past two decades, their complaints haven’t gone far. Repeated requests for repairs have netted only perfunctory improvements. In 2015, water damage on the second story forced the city to red-tag a unit.

The California Health and Safety Code spells out a list of hazards that make a rental unfit for tenants. That includes a lack of electricity, water or heat. It also includes relatively minor issues, such as the dampness of a room. Under state housing law, the city has the authority to pursue criminal or civil remedies. The city also has the authority to seize properties, in some cases, to force landlords to remediate hazards.

In the late 1990s, the city cracked down on unscrupulous landlords in the low-income Santee neighborhood. In 2000, a judge sentenced San Jose landlord Linda Arciaga to house arrest, forcing her to live in the same slummy apartment as her tenants. Overton—before becoming a judge—was involved in that case, too, as a city attorney.

But in the years since, San Jose has refrained from escalating code enforcement issues to that extent. Instead, it essentially plays whack-a-mole with code enforcement. Repeat violators like Lucich can repeat the same cycle year after year. Diane Buchanan, a deputy division manager of Planning, Building and Code Enforcement, said civil and criminal remedies are considered a last resort.

“We do have the ability to issues criminal citations,” she said, “but that rarely happens. We have so many other enforcement tools that are usually effective. … Because, to be honest, people usually respond to being hit in the wallet.”

Mollie McLeod, the city’s code enforcement division manager, said the city has proactively dealt with repeat violators for decades. But in 2015, it adopted a new model in which landlords are ranked on a three-tiered scale to speed up inspection cycles for property owners with a higher number violations. Tier I apartments are inspected on a six-year cycle, Tier II on a five-year cycle and Tier III every three years. Previously, all properties were inspected on a six-year cycle.

Residents can check the service tier level of their apartment on an online database called the Multiple Housing Roster. Lucich’s Rexford Way building falls on Tier III, which means it gets inspected more often and more thoroughly. More than 2,300 units citywide fall on the third tier.

McLeod said the city is working on bolstering its enforcement. This week, she conducted interviews for three vacancies in her department. The city is also searching for a new department head and conducting a survey to find out what the community wants from the person who fills the position.

Meanwhile, San Jose kicked off the field trial phase of a project with the University of Chicago’s Center for Data Science and Public Policy, which could lead to further improvements and efficiencies. The study aims to answer two questions:

  • Given the history of inspections and parcels in San Jose, which buildings should be inspected in the next month to catch the largest number of violations?
  • And which buildings should be inspected in the next year to catch violations sooner?

“We’re really excited about this,” McLeod said. “Because we are focused on having a ‘smart city’ vision.”

As for Lucich, he has until Sept. 6 to correct the latest round of violations. If not, the case could go to an appeals hearing, where fines of $2,500 a day per violation could accumulate to as much as $100,000. The case could also be appealed to the Superior Court. Whether the city takes it that far remains to be seen.

Jennifer Wadsworth is a staff writer for San Jose Inside and Metro Newspaper. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.

26 Comments

  1. Brava. Great follow up.

    Question: Who is in charge of seeing to it the violation mitigations are actually in place before he rents it again? The city has let him repeatedly re-rent units with code violations. Tenants move in without knowing when it’s been minimally cleaned and discover that it’s infested, mold starts coming through and other pre-existing issues are there. This tenant moved in under such conditions and after dealing with him for decades, I’m pretty sure the next one will, too, if this isn’t stopped. It appears to be his business model.

    • Our housing and office inventory would sharply contract were landlords required to correct every claimed defect before leasing. Most buildings have several and some are worse than others. The City’s graduated fine and inspection process seems like a reasonable approach.

      Otherwise, we displace thousands living with violations such as illegal conversions, excessive occupancy, mold, rodents, and insects. Uncorrected egregious conditions merit consequences that make such behavior unprofitable.

      A better question is how do we know our current practices are striking the right balance?

      • The city’s program works only if enforced. This property had outstanding violations for years with no enforcement. So, while it sounds good on paper, reality is a completely different matter. Maintaining the units is required by law. Unless there are severe structural issues, tenants are not displaced during mitigation.

        • Randi, will appreciate clarification and supporting info for your claim. I’m not sure if you’re criticizing PBCE’s overall lack of enforcement or PBCE’s enforcement for Lucich’s property. The City Auditor’s 2015-16 report (pages 100-101) http://www.sanjoseca.gov/DocumentCenter/View/63203 indicates Cases Opened have declined by more than 50% since the peak in 2009-10.

          The 2013 Code Enforcement audit report http://www.sanjoseca.gov/DocumentCenter/View/23918 suggests a poorly managed department. Example: $2.6M unspent since 2008-8 due to staff vacancies. Our unemployment rate was then at 7.6% and about half that now.

          Norberto Dueñas has had 2 years to fix PBCE and it doesn’t seems like the 2013-identified problems have been corrected. The Planning Commission bears culpability for failing to hold officials responsible as is allowed under their charter.

          • The Planning Commission bylaws and scope of duties do not include investigating the efficiency of the department. They only hear planning and land use issues.

            When a city is in contract litigation it’s hard to fill slots.

            Perhaps that drop in open cases reflects the fact the city has gone to a self reporting method rather than inspection of all units. It does not provide information on duration of a case being opened nor does it provide info on repeat offenders.

            Or, perhaps the real problem with PBCE is the fact that it is a revenue driven department. We certainly don’t hire police based on how many tickets they can write, yet those who are responsible for the health and safety of our citizens work for a department that hires based on revenue generation.

          • The Planning Commission’s Bylaws https://www.sanjoseca.gov/DocumentCenter/View/57531 provide for EXACTLY this type of review. The Neighborhoods Commission’s does too. Both require placing the matter on an agenda and would be subject to a majority vote commission members to move forward. Using data (e.g., public records) is often persuasive to convince others. But even if voted down, championing the matter focuses a spotlight that usually leads to reform. One can win by winning or win by loosing.

            “problem with PBCE is the fact that it is a revenue driven department.” – or that they aren’t when $2.6M is unspent. Ongoing inspections can be built into the permit cost, achieved through fines, business licenses, etc. – and SJPD *does* fund programs via civil forfeiture. The Auditor’s 2013 report and last Services report suggest the primary problem lies with mismanagement. Fix PBCE and we’d have many fewer Lucich-type cases and improve our housing stock.

          • Looking forward to you leading the charge on revamping PBCE in these matters. You’ll note that the audit doesn’t report a high volume of fines collected by them…because they do everything they can to let people fix things.

    • > SAD. Sounds like the Donald Trump model to me.

      Sounds like you’re getting revved up for 2020.

      Not too early to start testing those campaign slogans:

      “Hillary: she didn’t intend to be a crook”.

      By the way, is there an expiration date on Super Delegates, or can Hillary re-use hers in 2020?

  2. Lucich may be sleazy, but the story raises puzzling aspects not the least of which is Wadsworth’s ignorance of contract law. There was no “technicality” – Judge Overton had little choice to rule as she did. It would seem likely that the Law Foundation declined to represent Kathleen because they recognize futility. Kathleen signed an agreement after mediation, but subsequently regrets it. We don’t know her representation during mediation. We don’t know what consideration she received, but something of value is required for an enforceable contract.

    Meanwhile Shauun Cartwright, a self-appointed community activist, claims Kathleen got a raw deal. But unlike Ly Huang, no mention of providing any help to Kathleen. Arguably, Cartwright hurts those she purports to support. Despite her claims, there are pro bono attorneys for tenants that can’t afford representation as I suspect Wadsworth knows.

    Kathleen appears to have made a series of unfortunate decisions that resulted in no job, a withdrawn housing voucher, and bleak prospects.

        • And, yet, none were available. This is not small claims, attorney for landlord was present. Law Foundation is at capacity. They frequently do not have the capacity to take on cases and listed pro-bono attorneys are either at capacity or don’t return calls. Please don’t think this wasn’t tried. But, will gladly add your contact info to the small army that makes these calls when needed.

          • RANDI, I donate to the Law Foundation, but don’t see your name on its donor list.

            Many pro bono applicants bear significant blame for their circumstances. Lawyers often triage egregious cases, ones that offer legal fee recovery, or ones that will further their careers. Not everyone gets a free ride – even when deserving.

            I find nothing on LF’s site that highlights the tragic consequences of insufficient capacity –
            maybe pro bono layers are meeting their objectives. Addressing structural deficiencies seems like a better use of time to increase representation capacity if needed. More productive than ‘sob sister’ pieces in SJI.

        • Taxpayer, good for you. As you know any group like this sets a budget based on fundraising and that determines how many attorneys and case workers they can have on hand. They do a phenomenal job when they are on the case. They, unfortunately, are limited. Perhaps as a donor you can ask them how many cases they turn away and why/how they make that determination. I can assure you that they must at times do this. On this property alone, they’ve either been able to kick ass or unfortunately not.

          As for where/how I donate, is that really the point? Show me yours and I show you mine? I will offer to take you along the next time I’m at a unit where tenants don’t have the intellectual wherewithal to deal with these things. Too bad I couldn’t take you out there two years ago when the building was yellow tagged and tenants weren’t moved and nobody notified anybody…good times.

          I do thank you for contributing to the legal resources. Perhaps, if PBCE actually starts really fining landlords and making it not worth their while to rent and re-rent units under code violations, we can see the need for donations lessened.

          • I don’t plan to continue Law Foundation support. Per free evaluation service Charity Navigator, LFSV have failed to respond to questions about their organization, goals, and attainment. https://www.charitynavigator.org/index.cfm?bay=search.profile&ein=521014754 There are many worthwhile nonprofits and many smaller ones do submit responses. And unlike many non-profits, they fail to provide this information on their website.

            Their IRS 990 (2014) shows their CEO’s compensation at $180K for a 35 hour work week and overseeing an $8M operation – much of which is government funded.

            Thanks for prompting me to more closely examine their operation. I will be inquiring why public money is provided to LFSV without apparent accountability. SJI investigation?

  3. watch what God Almighty is going to do with Michael Lucich. This game of life is you reap what you sow. May The God of Jacob bless all tenants in this apartment complex with blessing and success now and always. Amen. May we see new ownership and a clean up to date apartment complex.

  4. “He’s putting people onto the street,” says Ly Huang, a friend of Katherine’s who has paid her rent since she lost her housing voucher last year.

    Ly Huang is incorrect, the landlord removed Katherine from his property, he didn’t “put” her anywhere. If we apply Huang’s logic elsewhere then bartenders who cut-off tipsy customers cause sobriety, tow operators who repo cars create pedestrians, and techs who shut-off cable service promote book reading. All nonsense, of course.

    If Katherine’s housing options are limited it is due to circumstances over which her landlord has no control: he’s played no part in the local housing shortage, he didn’t cause Katherine to live in an area she can’t afford, he’s not responsible for her inability to make a living, and he is not preventing her family or friends (like Ly Huang) from helping her out.

  5. “According to interviews with tenants, some pay upward of $2,000 to live in hazardous, illegal conditions.”

    They are not paying rent, Section 8 is.

    While the conditions may be deplorable, it could very well be the occupants causing damage as they have no skin in the game. Lucich certainly doesn’t live there- he’s not damaging the property.

    • You are making incorrect assumptions about who pays the rent. I’m curious why you aren’t outraged about the potential Section 8 violations rather than dismissive. It is, after all, your money as a taxpayer he would be stealing.

    • Jate: Section 8 gets its money from working taxpayers. Government pays for NOTHING, working people pay for everything.

  6. This landlord is disgusting, greedy, and should be made to pay hefty fines until his properties are in full compliance. He should be ordered to live in that apartment until his entire building is completely up to code. The City is failing tenants by not enforcing the law to the maximum extent of the law. I’ve seen the City do this too many times. No wonder nothing ever changes.

    • Kathleen, do you have personal knowledge, not hearsay, about this landlord, or are you just buying Jenn’s story?

      • It takes one google search to find he was sued for the same thing two years ago. It takes very little research to find his property has not been free of a code complaint any year in at least a decade. And I’m not talking minor things that are corrected easily or quickly.

    • > It’s simple really. the renter should move to a nicer place.

      An excellent point.

      And if there isn’t a nicer place to move to, don’t blame the housing market, blame politicians.

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