A downside of private streets: who exactly owns it?

There is a dispute about the ownership of a wealthy private street in San Francisco:

Tina Lam and Michael Cheng of San Jose said that in 2015 they were looking at parcels being auctioned online by San Francisco’s tax office when they saw a description of “this odd property in a great location.”

“Part of Pacific Heights, the right location, land in a good neighborhood. We took a chance,” Cheng told the San Jose Mercury News. He said they bought the land sight-unseen, beating out 73 other bidders and dropping $90,000 for the street and its common areas…

The Presidio Homeowners Association, which has maintained the space since 1905, blames a wrong address for the misdirected tax bills at $14 a year, bound for an accountant who had not worked for the association since the 1980s. The debt grew to $994, and the street was sold to recoup additional fees and penalties.

But the association did not know the back taxes threatened ownership of the street, the suit against Lam said. No notices were posted on the street, and no one on Presidio Terrace knew it changed hands until May 2017, when an investor representing Lam asked whether the association wanted to buy it back, according to the suit.

Is an odd case like this enough to suggest that having private streets is a bad idea in the first place? While the municipality does not have to pay the same costs to maintain the infrastructure, it seems like the private street is often an attempt by wealthier residents – whether homeowners or firms – to control their settings. And then there is a compelling reason for local government to make a claim to the street, there is a fight from the owners who felt that this property was theirs.

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