Tenderloin Tenants Wrongfully Hit With Eviction Notices

Residents at various buildings in the Tenderloin are dealing with an ongoing eviction saga even though they allegedly are current on their rent and haven’t violated their leases.

A total of 24 tenants in seven buildings were served with notices of unlawful detainer, the first step in eviction proceedings, late last summer, the San Francisco Chronicle reported. People living at 347 Eddy Street, 1029 Geary Street and five other properties were hit with the eviction notices.

In 2023, Mosser Companies defaulted on the loan it used to buy the buildings, leading to a receiver being appointed to manage the properties during foreclosure proceedings. As part of the new ownership arrangement, tenants — largely non-English speakers — were allegedly unknowingly required to switch from paper checks for rent payments to an online portal. They reportedly continued to pay rent by check, and one tenant claimed that their payments had been cashed for the months last year that the eviction lawsuit against him said he hadn’t paid.

After Mosser’s default and the receiver appointment, in 2024, El Segundo-based TerraCotta Multi bought the loan on the portfolio for about $61 million. A spokesperson for TerraCotta Multi told the Chronicle the company is “committed to working with our tenants to find solutions and keep people in their homes wherever possible” and noted that the company did not take official ownership of the properties until Nov. 20 of last year, approximately two months after the evictions lawsuits were filed.

“We have successfully reached resolutions with several tenants in recent months, and we are in active discussions with a number of tenants currently,” the spokesperson said, urging tenants who receive a notice for nonpayment or believe there is an error in their payment history to contact their property manager.

TerraCotta and Mosser are currently involved in litigation over tenant security deposits that have seemingly disappeared. TerraCotta said in court filings that the security deposits from tenants in 12 formerly Mosser-owned properties, including 347 Eddy Street, should total $578,676, but Mosser’s accounts dedicated to the funds only showed a total of $2,120 in deposits. TerraCotta also claims that the amount of rent the receiver was collecting “cannot be reconciled with the financial records and rent rolls provided to TerraCotta, such that it is unclear if rental income is being withheld from TerraCotta.”

— Chris Malone Méndez