Sunday, July 9, 2017

Reflecting on Master Tenants

It is on my solitary sojourns that I often do my best thinking. Today, I hiked in Tennessee Valley where cotton-tailed rabbits darted in and out of the grasses and the trails were adorned with native flowers. Today, I reflected upon a recent question from a landlord about why the “master tenant” is called a landlord.

I once rented from a master tenant in Berkeley. I leased a room and shared the common areas of the upper level of a house. My housemate was a highly intelligent woman from Bosnia, a single mother with a young child and a hot temper.

For nearly one year that I called Berkeley home, Mr. Master Tenant (MMT) was living in Italy. In fact, I never met him. I was asked to write out my monthly rent check to MMT while my housemate deposited our checks into MMT’s bank account and the rent was somehow timely paid to the property owner. In effect, MMT was my landlord since all my rent checks were made out to him.

As I became acquainted with the property manager, I learned more about MMT and the landlord's two attempts to evict him. The litigation spanned over eight years and culminated in a landmark decision in MMT’s favor in the California Court of Appeals.

Similar to Berkeley, San Francisco has a rent control and just cause municipal ordinance overlaid with additional rules and regulations, both of which must be read together to understand the housing rights afforded San Franciscan renters.

In San Francisco, the definitions of landlord, rental unit, and tenant are clearly set out in the municipal code in sections 37.2 h, r and t. A good definition of “master tenant” is provided by the San Francisco Housing Rights Committee which describes a master tenant as a “tenant who moved into the premises under a written or oral contract with the landlord or who inherited the apartment after the original master tenant left. S/he collects the rent from the subtenants and pays it to the landlord. [S/he] is also responsible for informing the landlord of repair and other issues.” San Francisco Rules & Regulations Sec. 6.15C describes a master tenant as "a landlord who is not an owner of record of the property and who resides in the same rental unit with his or her tenant (a 'Master Tenant.')"

Master Tenants sometimes take advantage of their subtenants as in the infamous case of German Maldonado who was not only a master tenant but a property manager for the landlord. Maldonado took $41,000 in rent payments from tenants and subtenants and failed to pay the rent to the landlord. His actions eventually resulted in the evictions of all the tenants residing in a building on 26th Street in San Francisco and a $780,000 judgment against Maldonado from a class-action lawsuit filed against him by some of the evicted tenants.

Concerning my own experience in Berkeley, I learned that the landlord spent over $100,000 in attorneys’ fees and costs in his two attempts to evict MMT. After losing his case at the appellate level, the landlord resigned himself to leaving MMT alone even while MMT was not actually living in his “castle,” a castle that he had won for life with all the benefits of Berkeley rent control and just cause eviction ordinance.

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