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Grasp tenants are the true landlords of San Francisco

San Francisco has all kinds of unique rental situations. From bunk bed pods to beds that descend from the ceiling, living in one of the most expensive cities in the country forces people to get creative in order to find semi-affordable housing. And one of the best ways to get a deal is to luck into a room in a San Francisco apartment that’s been rent-controlled for years.

But when you sign up to live with someone who’s paying far below market rate, they’re not just becoming your roommate — they’re also becoming your landlord. The “master tenant,” as they’re often known, gets to decide your rent; you’ll likely cut a check directly to them and even funnel repair requests their way. This situation is ripe for conflict, seeing as one person has drastically more power than the other tenants. But it’s not a perfect arrangement for the de facto landlord, either: They often hold even more power than they may have bargained for.

To understand a “master tenant” situation, it’s important to start with rent control and all the rules that come along with it. More than 60% of San Francisco’s rental units are subject to rent control. Specifically, rental units in a building constructed before June 13, 1979, qualify. Under the San Francisco Rent Board, people living in rent-controlled apartments are entitled to special protections regarding rental increases and eviction. Their apartments are likely cheaper than market rate and can only increase in rent costs by a certain amount each year.

The San Francisco Rent Board sets a percentage per year based on the Consumer Price Index in the San Francisco-Oakland-San Jose region for a 12-month period. The allowable annual increase amount for March 2021 to Feb. 28, 2022, which was 0.7%. This year, the allowable increase has risen to 2.3%. If you moved into your current two-bedroom apartment in 2010 and paid $2,800 a month, the most your rent could be now is $3,339. That’s about 15% below the median rent for a two-bedroom apartment according to Zumper’s most recent rental estimations.

“These arrangements are pretty much the only affordable arrangements that are left,” said Scott Weaver, an attorney and volunteer with the San Francisco Tenants Union. “It’s unfortunate in this tight housing market because you want to be able to be picky about who you have as a master tenant.”

A “for rent” sign hangs outside an apartment building in San Francisco.

Douglas Zimmerman/SFGATE

But becoming a master tenant often happens by accident. “There’s no document that’s signed that empowers someone to be a master tenant,” said tenants’ rights attorney Joseph Tobener. “It happens by circumstances. People get into these roommate situations in order to survive. … The roommate is a way to make ends meet.”

Search “master tenant” on Twitter and there are plenty of horror stories out there. A common grift? Master tenants charging subtenants an amount that adds up to more than the actual rent, allowing them to keep the profit. Adam, who declined to give his last name, said when he first moved to San Francisco, he found a two-bedroom apartment in Nob Hill with a master tenant who was never around (a nice perk). But the master tenant later rented her room out to another tenant, who was very messy, and then eventually stopped paying rent entirely. Adam came home one day to find a note taped to the front door that showed the full rent amount of the apartment, which was far lower than the “half” he was paying for his room. The full rent for the apartment was $2,150, and his rent for the smaller bedroom was $1,500.

Yup the total rent for the 3 bed was $1600 that the master tenant was paying I was paying 1200 of that!!!!

— Michael Farley (@michaelfarleyza) June 14, 2022

The master tenant moving out of their apartment happens entirely more than you’d think, whether or not they ever plan to return.

We also never had contact with the landlord, we could only communicate through the master tenant who lived in a different time zone.

— Bonny Light Horsewoman (@Nic3ole) June 14, 2022

Some San Franciscans get a room in a master tenant-run apartment that’s too cheap to leave, even though the master tenant is dangerous, abusive, or just plain a terrible roommate.

I was a master tenant at a great flat on Oak Street back in the late nineties. Had 3 other good, stable, roommates for years. They all left at the same time for various reasons, had to bring in 3 new people, it was a disaster. I left rather than be stuck with them.

— Ben Dover (@basurasemanal) June 13, 2022

One SFGATE staffer said he suffered through a terrible master tenant situation for eight years because the rent on his apartment in Russian Hill was significantly cheaper than it would have been in a market-rate unit. The master tenant had already been there for more than 10 years, was messy and had a penchant for late-night parties. But ultimately, the master tenant conundrum is what allowed the SFGATE staffer to save up enough money to buy a place in the Bay Area.

If you’re tempted to rent a room from a master tenant, make sure to look out for red flags, Weaver said. “You want to be picky about your master tenant. You have to rely on your gut instincts. If there’s been a lot of turnover, that may be a warning sign.”

Weaver also warns against renting from someone who seems to revel in their amount of power and the fact that they get to make the rules.

While it seems like master tenants are all powerful, they’re actually taking on more responsibility than they often think. “Master tenants are landlords under the rent ordinance, so any law that applies to a landlord is going to apply to master tenants,” Tobener said.

That means a master tenant could be sued if repairs aren’t made in a timely manner, or if they aren’t keeping the apartment up in a safe way should there be a fire, for example. They also could be sued if it’s discovered that they’re charging the subtenants more than the total cost of rent, or an odd proportion of the share.

If you end up as a master tenant, even by accident, Tobener recommends getting tenant insurance to protect yourself. “You’re in the business of landlording if you’re a master tenant and you’ve got to run it like a business or it’s going to bite you in the ass,” Tobener said. “And most people don’t. Most people think of it just like a roommate situation [where you’re] the one cutting the check.”

The actual landlord will also typically only work with the master tenant when it comes to collecting rent, taking repair requests, etc. If the landlord forms a relationship with one of the other tenants, then they wouldn’t be able to necessarily raise the rent if the master tenant eventually moves out. Plus, it’s easier to just deal with one person.

With San Francisco rental prices still the second-highest in the country, Weaver said he thinks these types of situations will always be around. And he said he thinks most of the time, they end up working out fine. “If people are able to get along, it’s a great thing,” Weaver said.

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