OpenAI CEO bought a “lemon house” for 27 million and must spend another 4 million to repair it, suing the developer

In a surprising development, Sam Altman, the CEO of OpenAI, has made headlines with his recent purchase of a mansion in San Francisco’s Russian Hill neighborhood for a hefty $27 million. This acquisition is particularly noteworthy as the property is being referred to as a “lemon” house, a claim that Altman attributes to significant defects within its structure. As a result, he has filed a lawsuit against the builder.

According to a report from the San Francisco Standard, 950 Lombard LLC, the property owner, filed a lawsuit on July 12 in San Francisco Superior Court, alleging they were misled into purchasing a property with substantial flaws. The lawsuit outlines a variety of issues, citing problems with internal walls, ceilings, floors, the roof, foundation, plumbing, drainage, and the septic system, with repair costs estimated to reach as high as $4 million.

The suit claims that Gregory Malin, the CEO of construction company Troon Pacific, was aware of these extensive installation issues but misrepresented the condition of these systems to expedite the sale.

The mansion, once regarded as one of San Francisco’s priciest homes, features amenities such as an elevator, century-old olive trees, and an infinity pool that boasts breathtaking views of the bay.

Public records show that 950 Lombard LLC purchased the home in March 2020, with Altman himself listed as the registered owner. Additionally, this address is linked to Apollo Projects, an investment firm co-owned by Altman and his brother, Jack.

Interestingly, both 950 Lombard LLC and the management of the “Sam Altman Qualified Opportunity Fund” share a manager in Jennifer Serralta. Furthermore, Altman’s residence in Hawaii is also registered under the same fund.

It’s important to highlight that Troon Pacific and Malin have faced a number of lawsuits related to poor construction quality and alleged fraudulent practices in the past. Just six weeks prior to Altman’s lawsuit, a San Francisco Superior Court ordered Troon Pacific to refund $48.1 million to investors involved in four other luxury properties, of which only two were completed. Reports indicate that although investors provided $14 million for the project, they saw no returns.

Initially listed for $45 million in 2018, Altman’s newly acquired mansion saw its price drastically drop during the COVID-19 pandemic, ultimately selling to 950 Lombard LLC for $27 million in 2020.