Real estate firm sues S.F. nonprofit, says it abandoned tenants

A San Francisco real estate company filed a lawsuit Tuesday against a nonprofit organization, saying it breached a lease agreement, in part by abandoning subtenants who are still living in the 33-unit building it was managing, according to a copy of the complaint.

In a complaint filed in San Francisco Superior Court, lawyers for Murkelley LLC accused Mission Housing Development Corp. of leaving 5524 Mission St. while its subtenants were still living in the building. According to the filing, the nonprofit signed tenants to subleases that continue beyond the term of its contract with Murkelley, which Murkelley said was a violation of the lease.

The filing states that the nonprofit entered into a 10-year lease with Murkelley in February 2013 to provide supportive housing for veterans, with assurance that the Department of Veteran Affairs would subsidize the rent and provide services to the veterans. The agreement ended Feb. 13, according to the filing, and Mission Housing Development Corp. left without making arrangements for its subtenants, Murkelley said.

After the nonprofit’s alleged abandonment of the building, Murkelley said, it hired a security company and a temporary “quasi-management company” to handle the needs of the subtenants. The company said that if the subtenants do not leave and the company cannot find someone to manage the building, Murkelley will be unable to use the building.

Murkelley said in the complaint that it had no desire to evict the subtenants but it lacks the experience to provide services to the veterans and cannot act as their landlord. Additionally, Murkelley said Mission Housing Development Corp. subleased units to some non-veterans, which it said violated the lease agreement.

“In sum, Defendants, with the City of San Francisco’s backing, abandoned otherwise homeless veterans, leaving them without assurance, security, or stability,” the complaint read.

Murkelley is demanding a jury trial in addition to monetary compensation for attorney fees and damages. “Murkelley has suffered, and will continue to suffer, damages in an amount according to proof and is entitled to compensation for the damages it has incurred,” the filing read.

A spokesperson for Mission Housing Development Corp. said it had no comment on the complaint.