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Wealthy San Francisco residents lose private street over tax bill 

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Residents of a San Francisco private street where homes sell for millions of dollars have had the street itself bought from under them.

Presidio Terrace is now owned by two investors, Tina Lam and Michael Cheng, who snapped up the private road for about $90,000 (£69,039, €76,203).

The street – parking, pathways and all – was sold by the city over a $14-a-year tax which went unpaid for decades.

Wealthy residents say they knew nothing about the sale until it was done.

The result is that residents no longer own the road, pavements, trees, or any of the common land – and might have to pay its new owners for parking.

The terrace, an oval-shaped private compound, is seen as one of the expensive city’s most prestigious addresses.

How does buying a road work?

Like other US municipalities, the City of San Francisco regularly auctions off properties that owners have failed to pay taxes on.

According to the city’s website, San Francisco advises bidders that all sales are final and so they must thoroughly inspect the property for any damage and consult local zoning rules.

Because maintenance is the duty of owners, privately owned roads can save money for cities.

However, some cities discourage the practice, out of concern that private owners might at some point require taxpayer dollars to keep roadways functioning.

Owners become legally liable for any accident or injury that occurs due to lax upkeep, such as not clearing snow or repairing potholes.

Number 24, recently for sale, was listed at $6.5m. Number 26, an “exceptional residence” on the southern slope, was listed for $14.5m.

“Among San Francisco’s many prestigious communities, there are few that offer the privilege of privacy amid the magnificence of nature,” reads the blurb on one property ad.

The agency was keen to point out that “stone privacy walls and a round-the-clock security guard provide peace of mind”.

But despite the affluence of the neighbourhood, it didn’t pay its taxes – and so the city sold it at auction for defaulting on a $944 tax debt.

The auction took place in 2015, the San Francisco Chronicle reported, but residents didn’t know about it – it took place in an online auction among a mix of properties.

“We just got lucky,” Mr Cheng told the newspaper. He and Ms Lam outbid dozens of others to buy the street without seeing it – and are deciding what to do with their investment.

“We could charge a reasonable rent on it,” he said of the 120 lucrative parking spaces that they now own. But some residents believe their new landlords may be looking to sell the street back – at a profit – to the locals who believe they should still own it.

Read the full article on: Wealthy San Francisco residents lose private street over tax bill – BBC News