The Property Management Shop

By Marc Wilson

Q. I am continuing to have the great pleasure of dealing with unauthorized subletting issues. I’m having the biggest problem with the “generation X” tenants who took possession between 1994 and 1996. A typical scenario would be a 30-year old that rented a one-bedroom apartment in the Western Addition for $745 per month in 1994 (the most one could get that year!) Now, fast forward to the year 2000 and the value of that same apartment is $1,700. The original tenant gets married or transferred and has hundreds of friends that want the unit. The financial incentive to defraud the property owner and not disclose the fact that the original tenant has left and given the apartment to another occupant is huge. We’re talking about $1,000 a month! So the original tenant simply vacates, the friend moves in and the property manager continues to get rent checks from the original tenant, postmarked in Walnut Creek. What can be done?

A. Call the original tenant and tell the individual that you are aware of his or her vacancy, the names of the new occupants are “John” and “Doe,” and that there has been a violation of the lease agreement for which you want possession of the unit returned. At this point, the tenant is likely to reply “I haven’t moved out. I’m just traveling all the time.” Other creative statements might come forth. Tell the original tenant you take fraud very, very seriously and you will proceed with immediate legal action if he does not deliver possession of the apartment. Suggest to the original tenant that the friends (the unauthorized subtenants) will have even more difficulty finding an apartment once you file an unlawful detainer and summons, and tarnish all involved parties’ credit reports. Roughly 80 percent of the time, the original tenant will come to the conclusion that spending the next three months in litigation for doing a friend a favor is not worth it.

It’s likely they will then give a 30-day notice and call the subtenants directly telling them to vacate, in which case you get the apartment back. If the tenant continues to lie, immediately serve the unauthorized occupants with a 30-day notice of rent increase pursuant to Section 6.14 and Costa Hawkins raising the rent. You should raise the rent to the absolute maximum conceivable possible rent. There is no use being Mr. Nice Guy since the tenant is lying to you. When the rent is next due, if the new occupants don’t pay the full amount, return their partial payment and instruct your attorney to file a lawsuit.

As a precautionary measure, it’s best to make sure you have unlawful eviction insurance before you file your lawsuit. I used to think it was better to wait three or four months and gather information about the whereabouts of the original tenant and other evidence before filing suit. This is not a good idea because the longer you wait, the more established the unauthorized occupant becomes and the more likely it is this person will fight your eviction. It’s important to take action the minute you suspect the original tenant has vacated the apartment.

The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. Marc Wilson has been managing and selling San Francisco apartment buildings for 15 years. Please send your questions concerning property management and/or apartment building sales to Marc Wilson at 1699 Van Ness Avenue, SF, CA 94109. He can also be reached at 415-229-1275.