Herrera secures $1.2 million from rogue developer for gaming permit system

Settlement with real estate developer Ashok Gujral is a warning to other house flippers tempted to flout the law

The before and after shots of 4068 Folsom St. Although the defendant claimed he would be doing simple construction, the photos illustrate the major renovations at the property done without permits.

SAN FRANCISCO (July 29, 2019) — City Attorney Dennis Herrera today announced he had settled a case against real estate developer and investor Ashok Gujral, who will pay the City $1.2 million to resolve a lawsuit that alleged Gujral routinely flouted the law by doing unpermitted construction on seven residential properties in San Francisco.
 
According to Herrera’s lawsuit filed on June 21, 2018, Gujral would either not seek permits or he would obtain permits for uncomplicated construction, only to later do major renovations that were far beyond the scope of what was allowed. For example, at 1613 Church St., Gujral obtained permits to remodel the interior of the home but instead substantially expanded the building, adding both vertical and horizontal additions and constructing interior stairs from the ground floor all the way to a roof deck.
 
Unscrupulous developers employ this type of deception to cut costs and build faster so they can flip homes and profit off of San Francisco’s housing crunch. This calculated scheme is intended to avoid the Planning Department’s oversight to determine if the work is safe or beneficial to the community. Work on one Gujral property undermined the foundation of a neighboring building, for example.
 
“It’s game over for house flippers who thought they could ignore the rules in San Francisco,” Herrera said. “We will catch you, and the price will be steep. We will make sure that breaking the law just isn’t worth it. Unscrupulous developers trying to make a quick buck by flouting the law increase safety risks, endanger the character of our neighborhoods and cheat honest developers by creating an uneven playing field. The City is not going to tolerate people trying to game the system so they can profit off of San Francisco’s housing crisis. I want to thank the Planning Department for their help in bringing this case.”  
 
“We have regulations for a reason,” said Planning Director John Rahaim, whose office was central to building the case against Gujral. “The vast majority of applicants play by the rules, and they shouldn’t have to pay a higher price due to those who don’t. Blatantly dodging necessary oversight and shirking fees only hurts the honest folks who are trying to do business in San Francisco. I’d like to thank the City Attorney’s Office for their hard work in holding Mr. Gujral responsible and ensuring he pay his debts to the City.”
 
In addition to paying $1.2 million under the settlement, Gujral had to bring all of his properties in line with land-use laws, including paying an additional $83,000 for proper permits. He also agreed to a court-sanctioned order with notice, inspection and quarterly reporting requirements for any properties he or his wife, Susan Gujral, own in San Francisco. Gujral did not admit liability as part of the settlement. The $1.2 million will be used for future code enforcement.  
 
The properties involved were:
 
•              531 33rd Ave., San Francisco, California 94121
•              120 Brewster St., San Francisco, California 94110
•              1613 Church St., San Francisco, California 94131
•              437 Ellsworth St., San Francisco, California 94110
•              4068 Folsom St., San Francisco, California 94110
•              903 Minnesota St., San Francisco, California 94107
•              310 Montcalm St., San Francisco, California 94110
 
The case is: City and County of San Francisco v. Ashok Gujral et al., San Francisco Superior Court, CGC-18-567479, filed June 21, 2018. Additional documentation from the case is available on the City Attorney’s website at: www.sfcityattorney.org 

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