Categories
General

Don’t Fret About Subletting 

A tenant has requested to sublet their unit while temporarily relocating for work. Our lease agreement restricts subletting, but the tenant insists they have the right under San Francisco rental laws. What are my legal rights and obligations, and how should I proceed?

Don’t fret about subletting!  Since 1998, the City’s rent law has increasingly blessed subletting regardless of what a lease permits or prohibits.  The first revision came during the “dot com” boom in the late 90s when the Board of Supervisors passed legislation to allow a one-for-one replacement of departing occupants.  The roommate replacement law gives housing providers two choices: Either allow a remaining lessee to replace a departing roommate or suffer a substantial rent reduction should the remaining occupant file a petition at the Rent Board for a decrease in housing services. The rationale was simple.  Before this rule, owners with strict “no subletting” lease clauses could effectively force someone to give up their housing, as the remaining occupant would become entirely rent responsible without the ability to bring in a new roommate to help offset the monthly rent obligation. After 1998, you either had to allow a roommate replacement or reduce overall rent by the percentage of what the departing occupant was obligated to pay.

About seven years later in 2005, the Board went a step further to permit residents to move members of their immediate family into an apartment even when the lease limited the number of occupants.  To address overcrowding concerns, this right to reside with family members law made the following allowances:  With the additional family member, the total number of occupants does not exceed the lesser of (a) two persons in a studio rental unit, three persons in a one-bedroom unit, four persons in a two-bedroom unit, six persons in a three-bedroom unit or eight persons in a four-bedroom unit, or (b) the number of occupants permitted under state law and/or other local codes (e.g., Planning, Housing, Fire and Building Codes).

Then, to finally put a stake through the heart of subletting restrictions, the Board in 2015 opened the floodgate to permit subletting to anyone, and the housing provider’s ability to say “no” is generally relegated to the following situations:

(1) where the owner resides in the same rental unit as the resident as a roommate;

(2) where the total number of occupants in the premises exceeds the unit limitations described above under the right to reside with family members law;

            (3) where the proposed additional occupant will be legally obligated to pay some or all of the rent and the proposed additional occupant is shown to suffer a lack of creditworthiness;

            (4) where the landlord has made a timely request for the proposed additional occupant to complete the landlord’s standard form application or provide sufficient information to allow the landlord to conduct a typical background check and the proposed additional occupant does not comply within five calendar days of actual receipt by the tenant of the landlord’s request;

           (5) where the landlord can establish that the proposed additional occupant has intentionally misrepresented significant facts on the landlord’s standard form application or provided significant misinformation to the landlord that interferes with the landlord’s ability to conduct a typical background check;

           (6) where the landlord can establish that the proposed additional occupant presents a direct threat to the health, safety or security of other residents of the property;

           (7) where the landlord can establish that the proposed additional occupant presents a direct threat to the safety, security or physical structure of the property; and,

            (8) where an additional occupant would require the owner to increase the electrical or hot water capacity in the building, or adapt other building systems or existing amenities, and payment for such enhancements presents a financial hardship to the landlord, as determined by a Rent Board Administrative Law Judge after a hearing.

This author believes that it is unwise to use these criteria to thwart subletting requests.  For starters, the long-standing advice of the industry is to not seek the application of or run the credit for new subsequent occupants, as doing so may impede the ability to re-set rent once all original occupants permanently vacate the premises.  Two, under current fair housing guidelines, you are best served by not withholding consent unless there is an obvious red flag such as adverse eviction history or known behavioral problems.  In sum, stop trying to control what you can no longer control, and instead keep your eyes open to identify instances where the original tenant is no longer permanently residing in the unit so that rent can be adjusted to market.   

Leave a Reply

Your email address will not be published. Required fields are marked *