What Are the Limits on Rent Charged By Master Tenants?

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A master tenant may not charge a subtenant more rent upon initial occupancy of the subtenant than that rent which the master tenant is currently paying to the landlord. For tenancies that commenced after May 24, 1998, the master tenant is required to provide each subtenant a written disclosure of the amount of rent the master tenant is obligated to pay the landlord, prior to commencement of the subtenancy. If a subtenant believes that the initial rent paid to the master tenant, either individually or in combination with other subtenants, is more than the master tenant is paying to the landlord, he or she may file a Tenant Petition against the master tenant alleging rent overcharges with the Rent Board.

In addition, effective August 21, 2001, a master tenant who shares a rental unit with one or more subtenants cannot charge any subtenant more than a proportional share of the total rent the master tenant pays to the landlord. The allowable proportional share of total rent may be calculated based on equal division among occupants, or the square footage shared with and/or occupied exclusively by the subtenant, or any other method that allocates the rent such that the subtenant pays no more to the master tenant than the master tenant pays to the landlord for the subtenant’s housing and housing services. In determining the proper base rent, additional housing services provided by the master tenant (such as furnishings or utilities) and/or any special obligations of the master tenant and/or evidence of the relative amenities or value of rooms, may be considered.

If the total rent paid by the master tenant to the landlord increases due to a lawful rent increase or passthrough, the subtenant’s share of the rent may be proportionately increased without regard to the subtenant’s anniversary date. Similarly, if the total rent owed to the landlord by the master tenant decreases, the subtenant’s proportional share of rent should be decreased accordingly.

A subtenant who believes he or she is paying more than a proportional share of the total rent may file a Tenant Petition against the master tenant on that basis. If the subtenant prevails, the Administrative Law Judge will adjust the rent to the proportional share and order the master tenant to refund any rent overpayments.

Source: San Francisco Rent Board