San Jose tenant illegally ran an unlicensed independent living home

A San Jose landlord has filed a complaint to evict a tenant operating an unlicensed business at her property without her knowledge.

Nelson Muan signed a lease agreement with Angela To in 2013. He then, unbeknownst to her, illegally converted the property on 659 N. 13th St. into an unlicensed independent living home. Muan converted the three-bedroom, 1,380-square-foot house to accommodate 10 people and installed of a makeshift canopy in the backyard for a renter. To maximize his profit, Muan turned the living room into a bedroom, packed multiple beds into rooms and stuffed people in the basement, which was supposed to remain locked under the lease agreement.

Muan pocketed the renters’ money and stopped paying To rent.

Muan’s eviction hearing is scheduled for Jan. 10. In an appeal filed by Muan, he claims the house needed major repairs and To hasn’t done any maintenance on the house since he signed the lease in 2013.

He did not respond to multiple requests for comment.

It’s unclear if the tenants in the home, who paid Muan between $750 to $900 a month, will be allowed to stay, but a sign previously posted on the front door said the business will no longer operate on Dec. 4.

San José Spotlight interviewed several residents and reviewed various lease agreements.

To said she only met Muan once, and he seemed like a nice man. But more than a decade later she has learned he was scamming her. To filed an eviction notice last May stating Muan owed her nearly $23,000 in rent from past due payments in 2023 and from January to May of 2024.

To said Muan hadn’t paid any rent in 2024, owing her more than $40,000 in total.

“He tricked us many times,” 80-year-old To told San José Spotlight. “He always tried to not let (us) come into the property. It’s a lot of things that we look back at and we think that we were so naive, because we (are) honest people.”

Illegal home conversions

This may not be the first time Muan worked this scam.

San José Spotlight reviewed another landlord eviction notice at 419 N. 13th St. filed in 2022 showing Muan violated the lease agreement by constructing unpermitted drywalls and arranging barriers made of room dividers. He was not authorized to remodel or run a business on the property. Muan was evicted from the property, according to a document filed by the Santa Clara County Sheriff’s Office.

Unlike licensed residential care homes which are monitored by the state Department of Social Services to ensure cleanliness and a standard of care, independent living homes are not required to be licensed. They fall out of the purview of the county or state’s monitoring system. Any landlord can turn their property into an independent living home for people with mental health illnesses or substance use disorders—and even renters can do so without checks in place.

“That’s a big, big problem. Sometimes operators and (landlords) are not in sync. Sometimes (landlords) may not know what the operators are doing,” Lorraine Zeller, coalition lead and volunteer with the Community Living Coalition, told San José Spotlight.”We need a multidisciplinary team that can effectively mobilize to address serious incidents, including pending evictions and substandard conditions, and ensure that victims are relocated to habitable housing.”

Both North 13th Street properties were on a 2022 NAMI (National Alliance on Mental Illness) resource list to help people with mental illness find housing. NAMI stopped publishing online listings after receiving property complaints and operators falsely advertising partnerships with the nonprofit, Executive Director Rovina Nimbalkar told San José Spotlight.

Mental health agencies contracting with Santa Clara County also have housing lists. San José Spotlight learned after talking to residents and advocates that organizations such as Momentum for Health and Asian Americans for Community Involvement placed people at the 659 N. 13th Street home, as well.

At least seven residents lived onsite when San José Spotlight visited the property in December. The tenants are some of the most vulnerable in the community: individuals with mental health or substance use issues who are often transitioning back into the community after receiving treatment in a hospital or other residential treatment facility.

San Jose code enforcement documented the property’s substandard condition and various problems in 2019, including a malfunctioning heater, stairs needing repair and a toilet detached from the floor. The report doesn’t state if the problems were resolved. The case was reopened in 2024, documenting an illegal business operating in the back. Other properties Muan ran were also flagged by code enforcement, including one for having unsanitary conditions with mice and bedbug infestations and another for overcrowding.

Muan took advantage of a broken system that exists in Santa Clara County where properties known as independent living homes go unregulated and unchecked.
A 2020 county audit revealed more than 30 licensed residential care facilities closed from 2014 to 2018 because they’re too expensive to operate, resulting in 262 lost beds. The decline of licensed homes means people with mental illness have meager options after being discharged from hospitals or residential treatment facilities. The outcome often results in homelessness, jail or re-hospitalization, the audit found.

At the 659 N. 13th St. house, the property reeked of cigarettes, paint was peeling off the walls, people slept on filthy mattresses and a pile of trash was strewn outside of the property.

“Now we know that we’re not the only victims,” To said. “It’s not just us that suffer, the people (who) live there suffer too.”

Contact Joyce Chu at [email protected], or @joyce_speaks on X.