Southern California home-flip giant Wedgwood was thrust into the spotlight last month after homeless mothers from Moms for Housing barricaded themselves in a vacant West Oakland home the company owned and refused to leave — an unusual turn of events for Wedgwood, which until recently had received little public attention or scrutiny in Northern California.
Attorneys representing Moms4Housing argued Monday in Alameda County Superior Court that housing is a human right and that the mothers have a right to continue living in their homes because of Oakland's ongoing homelessness problem. Judge Patrick McKinney is expected to rule soon.
With all the attention focused on the fight for control of the three-bedroom homes on Magnolia Avenue, little attention has been paid to Wedgewood's other activities in the area, where it has faced legal challenges from tenants and opposition from housing advocacy groups.
An NBC Bay Area analysis of property records and legal documents reveals that Wedgwood's Bay Area real estate portfolio is much more extensive than the Magnolia Avenue home it purchased in foreclosure in August. The home represents less than 1 percent of Wedgwood's Bay Area holdings and an even smaller portion of the assets the company owns nationwide.
It's hard to gauge how much real estate Wedgwood owns in the Bay Area and elsewhere because the company operates through an extensive network of LLCs, including Catamount Properties 2018, LLC, which owns the homes where the homeless mothers now live.
But Catamount Properties 2018 is just one of 98 active LLCs that NBC Bay Area traced back to Wedgwood using Secretary of State business filings and real estate records databases from Santa Clara and San Mateo counties. Though the LLCs have different names, they all have one thing in common that links them to Wedgwood: the mailing address for the company's Redondo Beach headquarters.
A review of assessor and recorder records shows that Wedgwood currently owns at least 125 properties through a network of LLCs in eight Bay Area counties. That number does not include properties the company may own in Solano County, which said it cannot provide ownership records over the phone. There may also be other LLCs connected to the company that were not identified in the NBC Bay Area investigation.
Of the 98 active LLCs, assessor and recorder records show 31 Wedgwood entities appear to have owned real estate in Bay Area counties since 2015. Other entities appear to perform other functions for vertically integrated companies.
But Wedgwood's current number of properties isn't an accurate representation of the scale of the company's Bay Area operation. Its business model revolves around buying homes, fixing them up, and quickly flipping them, meaning that Wedgwood rarely holds onto them for long. The Magnolia Avenue home was vacant when the homeless mothers took it over in November, but Wedgwood had only purchased it in August and said it planned to fix it up and sell it soon.
California county deed records record thousands of real estate transactions over the past five years. These records provide evidence of activity in a particular area, but one purchase or sale may involve multiple transactions.
Wedgwood LLC, identified by NBC Bay Area, has appeared in Solano County deed records more than 220 times since 2015, Kern County deed records more than 726 times and San Bernardino County deed records more than 926 times.
That's just in California: Dallas County, Texas, for example, has had more than 544 deed records linked to Wedgewood LLC since 2016, and Broward County, Florida, has more than twice that number. Catamount Properties 2018, LLC is currently registered in 18 states, according to state business records.
“This speculative activity drives up home prices,” said Amy Inglis, program director for Tenants Together, a San Francisco-based nonprofit tenant advocacy group.
While companies' acquisition of foreclosed properties has slowed significantly since the peak of the foreclosure crisis, the practice continues and can lead to evictions for tenants renting foreclosed homes, Inglis said.
“Companies were buying up foreclosed homes, many of which had already been rented out,” Inglis said. “By the end of the crisis, we calculated that at least 1 million tenants in California had been evicted by new owners who came in and served eviction notices without allowing the tenants to continue living in the property, and then resold the property.”
In response to NBC Bay Area's request for comment, a representative for Wedgwood said:
We regularly acquire a large number of distressed properties, most of which are occupied by previous owners who have been foreclosed by lenders. In some cases, the properties may not be owner-occupied, in which case, to the extent the occupant has a legal right to reside in the property, Wedgwood will respect that right and permit the occupant to reside there for the duration of the lease or other rights. Wedgwood always complies with all legal requirements relating to its efforts to obtain title to properties it purchases.
Sam Singer, spokesman for Wedgwood
A review of court documents in the four counties where Wedgwood owns properties found more than 300 lawsuits involving the company since 2015. Most of the cases were squatter suits seeking to evict tenants or former owners from homes the company had recently purchased.
In San Bernardino County alone, Wedgwood has been party to 275 lawsuits since 2015, the majority of which are related to illegal occupation.
“Their job is basically to take property where people are living and then evict them,” said Leah Simon Weisberg, legal director for the Alliance of Californians for Community Empowerment (ACCE), who is handling eviction defense for the homeless mothers residing in the Magnolia Avenue home.
The mothers were not living in the home or owners of the property when Wedgwood purchased it in August, which makes the dispute different from other litigation involving Wedgwood, in which legal actions have been brought against previous owners or existing tenants at the time the company purchased the property.
“They seem to be more of an eviction machine than anything else. That's exactly what they're selling. They take properties, they evict people and they sell them while they're vacant,” Simon Weisberg said.
In San Francisco, which has strong tenant protection laws, Wedgwood has been sued three times since 2016 for wrongfully evicting tenants from foreclosed properties it had recently purchased.
In a 2016 lawsuit, plaintiff Maria Hernandez sued Wedgwood for wrongfully evicting her from the home she had rented for many years. The suit alleges that Wedgwood agents illegally evicted Hernandez from her home after she refused to pay a small buyout.
“Defendant Wedgewood directed its employees and agents to aggressively remove foreclosed housing while at the same time refraining from repairing the poor conditions within these properties until all occupants had either moved out or been forced to leave,” the complaint states. “When these pressure tactics were unsuccessful, Defendant Wedgewood's eviction department would assign these tenant-occupied properties to local eviction attorneys who would uniformly initiate 'no cause' post-foreclosure eviction proceedings that illegally circumvented probable cause eviction protections.”
At the time, Wedgwood denied each of the allegations in written responses to the court.
Two of the San Francisco wrongful eviction cases investigated by NBC Bay Area were settled for undisclosed amounts; one is still pending.
In response to inquiries about the matter from NBC Bay Area, a company representative said, “There are confidentiality clauses in the two settled lawsuits, and Wedgwood cannot respond beyond saying the matter is resolved.”
The West Oakland home was vacant when the Moms4Housing moms seized it without Wedgwood's permission, and the company is now fighting in court to evict the moms.
Wedgewood has served eviction notices to the Moms4Housing mothers, and if the Alameda County Court rules in Wedgewood's favor, the mothers could be evicted.
Meanwhile, Oakland City Council members Rebecca Kaplan and Nikki Fortunato-Bass have called on Wedgwood to negotiate a sale or transfer of the land to the women.