The Real News

September, 2018
Not So Private Transactions Thanks To Yolanda

In today's technology driven world, it is not surprising to most people that bad guys are able to find out information about their private transactions if they want to.  But, most of us expect that the service providers we are using to conduct those transaction will not make that information public.  On high profile and high dollar transaction, that expectation is often backed up with a non-disclosure agreement by the service provider.

So when the details of a private transaction are splayed all over the internet before the transaction is closed, it gets attention.  That is exactly what has occurred for the blogger known as Yolanda who posts about such transactions on the website

Not only have Yolanda's posts gotten attention, but the search to find out who Yolanda actually is and where the information is coming from is also on.

The reason for such inquiries and concern is that many of Yolanda's posts are published before a deal is closed. The posts often include personal, private information including the final sale price. The information published is typically only available to those with intimate knowledge of the deal, namely the real estate professionals and settlement service providers handling the transaction.  These professionals are required by contract and by law to protect the confidences of their clients so if they are the source for Yolanda there are likely in breach of contract and at risk of potential regulatory discipline.  So when Yolanda blows the lid off a deal, it can potentially harm the real estate professional's ability to land another big client.

As a result of these risks and liabilities there are many trying to unmask Yolanda's identity.   Like most great internet conspiracy theories, the identity of Yolanda has been "proven" by multiple different sleuths, including the Los Angeles Times.  To date, however, there is still speculation and litigation has not been initiated.  Based upon the current strength of the investigation, and the continuing disclosures, it is reasonable to believe that more is to come.  If and when things do come to light, Yolanda and her sources may well be subject to both regulatory discipline and civil damages.  
Case of the Month

Martin J. Coyne v. Diego De Leo

Martine J. Coyne (Coyne) is the landlord of a property in San Francisco. He brought an unlawful detainer action against his tenant, Diego De Leo (De Leo), invoking the Ellis Act. An unlawful detainer is typically when a tenant occupies an apartment or leased space and refuses to leave when their lease expires, or they don't pay rent, or other reasons that may endanger others. The landlord's typical result of a successful unlawful detainer action is eviction of the tenant. The Ellis Act was passed by the California legislature in 1986. The Ellis Act allows a property owner of rental units to stop renting the property(ies) by going completely "out of business" of renting said property. City and county boards cannot force an owner to continue to rent property when they want to retire from the rental business. This is a very important act, especially for areas with strict rent control regulations.

Coyne owned a rental property (Property) in San Francisco since 1996. The property includes a building with three apartments (3rd floor, 2nd floor, and 1st floor) and a free standing, three-bedroom cottage. De Leo (who was 81 years old at the time of the trial) has rented the cottage since 1989. De Leo paid $770 per month in rent, pursuant to an oral leasing agreement with the previous owners. When Coyne purchased the property, De Leo agreed to an increase in rent to $800 per month. In contrast, the 3rd and 2nd floor apartments rented for $2,250 per month, while the 1st floor rented for $1,600 per month.

In 2012, Coyne decided he wanted to move into the cottage. He discussed this with De Leo, who agreed to move into the 1st floor apartment and pay only $600 per month in rent. Based upon De Leo's agreement to move, Coyne paid the existing tenants of the 1st floor apartment $10,000 in relocation. After they moved out, Coyne painted the 1st floor apartment. In October 2012, Coyne asked De Leo to move to the 1st floor apartment. However, De Leo had a change of heart and decided to remain in the cottage. In December 2012, Coyne transferred ownership of the property into three trusts, including himself and his children as the beneficiaries. The 2nd floor tenant moved out. The 3rd floor tenant moved to the 2nd floor. Coyne moved into the 1st floor and his daughter moved into he 3rd floor as a part owner. Now the 1st and 3rd floors were owner occupied.

Coyne filed a "Notice of Intent to Withdraw Residential Units from the Rental Market (NOITW) with the San Francisco Residential Rent Stabilization and Arbitration Board (Rent Board). A second notice filed in August 2013 superseded the first notice. There were a few discrepancies with the 2nd notice, such as listing Coyne as residing in the 3rd floor apartment, although he lived in the 1st floor apartment. The only two units with renters listed was the 2nd floor apartment and the cottage.

De Leo received his notice of termination of his tenancy on August 8, 2013. Based upon his age, he requested a tenancy extension. In San Francisco, the age extension for De Leo is 12 months. His request was granted, and he was due to move out on August 8, 2014. Coyne paid half of De Leo's relocation fee (dictated by the Board) and extended the 2nd floor apartment's relocation date to coincide with De Leo's August 8, 2014 date.

After waiting the 12 months, the day of De Leo's moving out arrived, but De Leo ignored it and continued to occupy the cottage. So, Coyne filed an unlawful detainer action against De Leo. De Leo argued the notice of termination of tenancy was defective and won the argument. Judgment was entered in De Leo's favor and he was not evicted.

In May 2015, Coyne filed a third NOITW. The only tenant listed on the third NOITW was De Leo in the cottage. All three apartments were listed as owner occupied. De Leo was served with a new written notice of terminating his tenancy and required him to move out within 120 days. De Leo again invoked the extended timeframe based upon his age, which was granted. His new move out date was now May 8, 2016. The three apartments were removed from the rental market on September 5, 2015. Coyne invoked the Ellis Act and instructed his children to not collect any rent from the three apartments. He also made an offer to the 2nd floor apartment tenant to become a part owner. She signed a purchase agreement where she paid interest only payments on a $500,000.00 "loan" from Coyne with a balloon payment due after 5 years. The interest only payment just happened to be the exact same dollar amount as her rent.

May 8, 2016 comes around and De Leo still refuses to leave. Coyne sues him invoking the Ellis Act for his unlawful detainer action. The Trial Court agrees with Coyne and De Leo is ordered to move out. Of course, De Leo appeals the Trial Court order. The Trial Court did not allow the information about how the 2nd floor tenant became a partial owner. In fact, she moved to North Carolina and stopped making payments. Since she stopped payment, ownership (per the purchase agreement) reverted to Coyne. De Leo argued this was a sham purchase and she was really a tenant. The Appellant Court agreed with De Leo and struck down the Ellis Act argument made by Coyne since not all the units were removed from the rental market. The Trial Court judgment was reversed. De Leo is to recover his costs on appeal.
Miami Realtor Accused of Extortion

Kevin Tomlinson was arrested on August 8, 2018 for allegedly trying to blackmail two competitors in Miami.  We was fired from his position at One Sotheby's International Realty just days after his arrest.  He wasn't out of a job long though, as he started working for Julian Johnston at Calibre on August 12, 2018, just four days after this arrest.  "He's innocent until proven guilty.  I wanted to offer him my support," Johnston said.

According to Miami police, they have evidence that Tomlinson attempted to extort $800,000.00 from Jill Herszberg and Jill Eber, collectively known as "the Jills".  Tomlinson allegedly told the Jills he discovered they were manipulating a database used by brokers to list properties.  He supposedly filed a confidential complaint with the Miami Association of Realtors.  He threatened to go public with the Jills misuse if they don't pay in the $800k.
Instead of paying the money, the Jills contacted the authorities.  A spokesman for the Jills said they had entered incorrect information into the property database but that it has been unintentional.  The data had nothing to do with properties for sale.  It involved off market, expired listings according to their spokesman Bruce Rubin.  He continued, "When they became the victims of a blackmail attempt, they did the right thing - they immediately called the authorities.  When good people make an honest mistake, they do the right thing.  Others choose extortion."

The Miami Realtors' association said that its rules prevent it from confirming or denying the existence of complaints about its members.  When contacted, Tomlinson stated that he had uncovered a massive data breach and everyone is attempting to keep him quiet.  He continued to imply that the Jills, the Miami Association of Realtors, and even Coldwell Banker and Sotheby's wants to keep him quiet about it.  He also refused to address the extortion charges, stating that's something for his attorney to comment on.  His attorney was not available for comment.

In addition to extortion, Tomlinson has been charged with resisting arrest and reaching for an officer's gun when the police served a warrant at this Miami Beach penthouse.  Apparently, it didn't go well for him, as his face was bruised in his mugshot.  He was released on $11,000.00 bail.  If convicted of a felony, Tomlinson faces possibly having his real estate license suspended or revoked by the state of Florida.
Upcoming Speaking Engagements

September 29 - Escrow Training Institute 

October 2 - Women to Women Westlake

October 3 - Woodland Hills Tax & Estate Planning Council

October 13 - Speak at California Escrow Association Conference
Link to Conference Website


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