Inevitably, all landlords are going to one day face the situation of accepting a subtenant onto their property.
Although all Lingsch Realty leases prohibit subletting apartments, under regulation 6.15A(d) of the San Francisco Rent Board code, a landlord may not refuse a tenant the right to replace roommates on a one-for-one basis every 12 months. A landlord, however, does have the right to a proper written request from the tenant, and an opportunity to screen the new subtenant.
There are two ways to handle a subtenant:
- Add them to the lease. If added, the new tenant is explicitly bound to all its terms even after the master tenant vacates. The downside is that you are making the new tenant your tenant and therefore bestowing the benefits of the master tenants already restricted rent when the master tenant departs unless a 6.14 Notice has been timely served (more on that below).
- Lingsch Realty recommends NOT adding a subtenant to the lease. Therefore, when the master (original) tenant moves out, the subtenant either has to vacate as well, or re-rent the apartment with a new lease at the current market rent.
Two things you must remember when accepting a subtenant
- Run a background and credit report on a subtenant just as you would a new master tenant. Though some attorneys argue with this procedure, as they fear acknowledging the subtenant in any way, may put you at risk for establishing a tenancy with the subtenant, the legal team I consult with argues that you want to know who is living in your building at all times.
- Explain to the master tenant that you are not establishing a tenancy with the sub tenant and that all rent, correspondence and maintenance requests must come from the master tenant, not the subtenant. If the subtenant contacts you, do not communicate with them, but rather refer to the master tenant.
- Serve a 6.14 notice on the subtenant. This is a legal notice that places the master tenants and subtenants on formal notice that once the last original, or master, tenant vacated, rent could be adjusted to market levels.
- DO NOT ACCEPT RENT FROM THE SUBTENANT. All rent must come directly from the master tenant. Accepting rent from the subtenant creates a tenancy and can be used as an argument by the subtenant for combating the 6.14 notice.
Subtenancies can work well for all parties as they tend to create fewer turnovers in apartments. Do not be dissuaded by the extra work involved. Just stick to the rules above and you should be protected. For more information, please contact a qualified landlord attorney.
Best,
Natalie M. Drees
Broker