This Iron-clad Master Tenant Agreement May Save Your Housing & Freedom
Eviction is an extremely difficult and complex undertaking in the 7×7 square miles of San Francisco. But what do you do when you are just a master tenant and have a subtenant or squatting guest from hell? With approximately 73% of San Franciscans living in rent control units according to Census.gov, rental laws are slanted heavily in favor of renters, although is an important law, it does however make it usually difficult to evict problem renters–unless you have an ironclad agreement and an iron will. Most people do not know that as a Master tenant, there is a no-cause eviction clause where you can give any roommate 30 days notice vs a Landlord who does not live in the unit, that needs just cause to evict after 30 days. The problem is, if you don’t have an iron-clad agreement with the exact 16 point font and wordage, you could be stuck in a loophole with a roommate or squatter due to the SF Rent-Control laws.
The Story of Master Tenant Brent Marsh
Master tenant, Brent Marsh, made his way up the totem pole to sole master tenant in 1990. Since then, he had shared his rent control apartment with many roommates over the years who came and went… until guest lodger Ellen James deemed herself a tenant and squatted rent free for over 4 ½ years claiming a debt that was being repaid through rent.
Steven MacDonald of Steven Adair MacDonald Law Firm says” There are two very important laws you must understand as a Master tenant. A master tenant does not require Just Cause to evict their subtenant however the rent board which has power to right regulations to interpret the law, passed what I consider a silly regulation that requires the master tenant to warn the subtenant in writing at the inception for the tenancy about this exemption. None of the tenants are aware of this so they don’t to do this. Then they lose the exemption so they can be stuck for the rest of their life with someone they met on Craigslist. ”
This is precisely what happened to 27 year Master tenant, Brent Marsh when he made a verbal agreement with his business colleague, Ellen James for her to stay at his rent-control apartment in Nob Hill.
A documentary with the working title “Master Tenant: The Price You Pay” is in the works. It documents how work colleague and house guest and self proclaimed tenant was able to utilize free lawyers and manipulate the system to stay rent free in Master tenant Brent Marsh’s apartment for nearly 5 years and how you can protect yourself from the same happening to you. This unlikely story tells how desperate and convoluted two otherwise, decent people, can turn ugly when fighting over a 4 bedroom rent control apartment in San Francisco. What began as a business deal turned into a Criminal trial where Mr Marsh was looking at 4 years in Prison after events took place at the very apartment.
Marsh says, “ I am sharing my story because I hope what happened to me, never happens to another person in San Francisco. We all think, it would never happen to us. I trust so-and-so. But I have been through hell and it could have all been avoided if I had just had a clear agreement. I didn’t know about these regulations that I had to warn the subtenant at the inception of the tenancy.”
Another law to be wary of, is any guest, whether they pay rent or not can become a tenant after 29 days. This means they are a lodger and unless they signed the “No Just Cause Eviction” exemption in an agreement, then you could be stuck with them! A person gains tenancy in an apartment by living there for 30 days. They also gain all rights under rent control (if their building is under it) and state law. No actual written lease is needed in order to be a tenant. According to Police officer Raymond from Central Station in San Francisco, officers consider tenant issues a Civil matter and they will not remove a lodger from your house as a considered trespasser if they have been there for over 29 days, without direction from the courts.
Attorney, Steven Adair MacDonald was introduced to Marsh because of his situation. He was unable to represent Brent pro-bono against Ellen’s free attorneys, however MacDonald and Marsh did become friends. Landlord attorney Karen Uchiyama, ended up taking Brent’s complex case Pro-bono with a drawn out, but successful conclusion through settlement.
WHAT TO DO TO AVOID SUBTENANTS FROM HELL
Always have a written agreement to be signed by you and your subtenant. It should include details about where and how to pay the rent, who is responsible for utilities, the duration of your sublet agreement and any other agreements you have come to with your subtenant. These might include expectations about how your subtenant should handle your personal property and other maintenance and upkeep issues. Ultimately, the agreement you enter into with a subtenant must be consistent with the contents of the agreement you have with your landlord.
MacDonald says, “There is another law you must understand, the master tenant can not gauge the subtenant.” What MacDonald speaks of is the city’s Rent Board law that you cannot charge more for rent than what you are paying to your landlord. For sublet agreements struck after May 24, 1998, you must show your subtenant, in writing, how much rent you pay for your unit. As of Aug. 21, 2001, the Rent Board notes that if you share your space with a roommate, you cannot charge him more than a “proportional share of the total rent” you pay to your landlord. You can determine a roommate’s share of the rent on the basis of the number of people occupying the unit, square footage shared or another method that ensures the subtenant is paying a fair share of the rent.
Be sure that your subtenant is approved by your landlord or property manager before moving him/her in.
Draft a written subtenant agreement in which your sub tenant waives his/her rights to Just Cause protection. This is perfectly legal and it allows the master tenants to evict subtenants for reasons other than the 15 Just Causes.
Include in your written subtenant agreement that the first month of his/her residency in the unit is on a trial basis, and that if all master tenants are happy with the situation, the subtenant will be permitted to remain, but if not, the subtenant will agree to vacate at that time.
Charge subtenants a deposit, even if it is not required by your landlord or property manager, and include specific instances in which some of the deposit money may be withheld in your subtenant agreement (e.g. to cover unpaid rent, unpaid utilities, damages to the unit).
Be sure your agreement is signed and dated by the subtenant and all master tenants. Each person should have his/her own signed and dated copy, and the landlord may want a copy as well.
IronClad San Francisco MASTER TENANT / SUBTENANT Rental Agreement:
This sublease agreement is to begin on ________ by and between __________ (hereinafter “Master Tenant”) of the flat with an address of ____________ (hereinafter the “Flat”) and _____________ (hereinafter “Subtenants”). SUB-TENANT acknowledges that any false statements found in RESIDENT’S application shall constitute a non-curable material breach of this Agreement.
Master Tenant agrees to sublet the Master Bedroom consisting of ____________ in the apartment . The Suite includes furnishing of __________ (for a fee of _______ per month/ included in the fee ).
Subtenants shall also have the use of the various household and kitchen amenities. Wi-Fi and water are included in the rent. The PG&E gas and electric bill shall be split amongst the tenants beginning from the move-in date ______. Any unpaid PG&E charges shall be deducted from the security deposit.
Master Tenant hereby discloses to Subtenants that the sub tenancy granted by this agreement is not subject to the just cause eviction provisions of the San Francisco Rent Ordinance, Section 37.9. I hereby waive my right to just cause protection and agree that I may be evicted for any reason including reasons other than evictable causes so long as the master tenants provide 30 days notice to vacate the premises. Duly notified, Subtenants hereby acknowledges his right to just cause protection is waived and agrees to be evicted by Master Tenant for any reason and without just cause.
As required by the San Francisco Rent Ordinance, I am informing you that the monthly rent paid for the flat, including the sole garage parking space, is ___________.
Subtenant initials _____
Master Tenant and Subtenant agree to give each other a 30-day notice to vacate or end the lease agreement.
- Term: The lease begins on ________, on a month-to- month basis.
- Rent Amount, Security Deposit and Due Date: Subtenant shall pay to Master Tenant ___________ to be paid on the 1st of each month. The security deposit is________ and shall be paid along with the first month’s rent.
The move in amount of the first month’s rent and the security deposit is total of __________. Rent shall be paid to the Master Tenant on the 1st of each month, by direct deposit of cash into the Master Tenant’s bank account at _________. Should that bank account change, the Master Tenant will provide an alternate means of money transfer, and the Sub-Tenants will agree to make payment according to future instructions designated by Master Tenant.
LATE CHARGES and RETURNED CHECKS: SUB-TENANT acknowledges that OWNER will incur certain administrative and related costs in connection with a late Rent payment or dishonored Rent check, and that the amount of such costs are extremely difficult or impractical to ascertain. Therefore, the Parties agree that, if RESIDENT fails to pay the rent in full by the end of the ______day after it is due, RESIDENT shall pay a late charge of $ _________ (not to exceed 4% of unpaid rent amount), and the Parties agree that this amount is reasonable for such administrative costs. RESIDENT further agrees that such administrative costs are deemed additional Rent. If Owner elects to accept Rent after the tenth day after it is due, payment in a form other than by personal check may be required. No acceptance of late rent by OWNER, at any point, shall constitute a waiver of the right to insist on full payment of Rent on the day it is due, and OWNER may serve SUB-TENANT with a three day notice to pay rent or quit at any time after a rent payment becomes due and is unpaid. In the event SUB-TENANT’S check is dishonored by the bank for any reason, SUB-TENANT shall pay a returned check charge of $________ as additional Rent. The same late charge stated above will be imposed as additional Rent if the returned check causes the Rent to be late.
Subtenants will be given one set of keys to the Premises upon payment of __________ and the Subtenants shall be allowed to make a copy of the keys.
- Right of Entry
Subtenant hereby grants permission to the Master Tenant to enter the Suite for practical reasons only, including the entry by the landlord and/or contractors should repairs be needed, or if required to show prospective tenants at reasonable hours of the day.
- Upkeep and maintenance; no nuisance or substantial interference.
Subtenant agrees to keep and maintain the Flat and the Suite both in a clean and sanitary condition and in good working order, and to care for all appliances and furnishings on the Premises.
Subtenant shall not create a nuisance or annoy Master Tenant, the neighbors, or the owner.
- Pets and overnight guests
Other than service animals permitted or required by law, no animal (e.g., fowl, fish, reptile, and/or pet of any kind) shall be kept on or about the Premises, for any amount of time, without obtaining the prior written consent and meeting the requirements of the OWNER. Said consent, if granted, shall be revocable at OWNER’S option, upon giving a 30-day written notice. In the event laws are passed or permission is granted to have any item prohibited by this agreement or if for any reason such item exists on the premises, there shall be minimum additional rent of $25.00 a month for each such animal if another amount is not stated in this Agreement. In the event laws are passed or permission is granted to have a pet and/or animal of any kind, an additional deposit in the amount of $_______________ (not to exceed) shall be required along with the signing of a “PET AGREEMENT ADDENDUM”, which OWNER will supply. This provision shall not apply in the case of an individual with a disability who has the right to be accompanied by a guide dog, signal dog, or service dog, especially trained for the purpose. However, the individual shall be liable for any damage done to the premises or facilities by his or her dog.
The Subtenants also agree to limit overnight guests to 5 nights per month, unless permission is given by the Master Tenant.
Subtenants shall be liable at all times for the conduct and damages of their guests on the premises.
- Subletting or Assigning
Subtenants agree not to assign or sublet the Suite or any part of the premises thereof, or any (other) part of the Flat. This provision also includes Airbnb type arrangements.
Subtenant initials _____
- Damages, Legal Fees and the Security Deposit
In addition to the first month’s rent of ______, the Subtenants agree to also pay a security deposit of ________ as permitted under the SF Rent Ordinance for furnished rooms.
If there is any action brought by Master Tenant to recover damages to the Flat beyond that expected from normal wear and tear, or to pursue an eviction; Subtenants agree that their security deposit will be used to pay all of the costs in connection therein, including attorney’s fees.
If the costs do not exceed damages and costs incurred, the entire or remaining deposit shall be refunded, with interest, to Subtenant within 21 days, pursuant to Chapter 49 of the San Francisco Administrative Code. Furthermore, any reason for retaining all or a portion of the deposit shall be explained in writing within 21 days of the end of the sublease term.
If the costs incurred exceed the amount of the deposit, the Subtenants agree to pay for those costs. If the Subtenants won’t pay the extra costs, legal actions may be initiated to recover damages in court.
- Representations and Warranties; Entire Agreement
Master Tenant represents that he has lawful possession of the Premises along with the right to assign and sublet for the duration of this sublease agreement.
Furthermore, this sublease agreement incorporates and is subject to the original lease agreement between Master Tenant and his lessor. Subtenants agree to assume all of the obligations and responsibilities of Master Tenant under the original lease for the duration of this sublease agreement.
This sublease constitutes the sole agreement between Master Tenant and Subtenants.
Subtenant initials _____
If any provision of this Agreement is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provisions of this Agreement, and this Agreement will be construed and enforced as if such provision had not been included.
Agreed to and signed on ________
Name, Signature, date ______________________________,
_____________________________ as Subtenants.
- San Francisco Tenants Union – This page contains an explanation of the 15 Just Causes of eviction.
- San Francisco Rent Board – This page offers more information on the Just Causes of eviction
- The San Francisco Rent Ordinance – This page provides the full text of the San Francisco Rent Ordinance, governing all evictions in San Francisco.