First/last month's rent scam?

October 7, 2008 4:36 PM

Yet another roommate/deposit recovery question....

The scene:
San Francisco. Rent-controlled apartment.

The characters:
Main tenant -- we'll call her Mary -- who has lived in the apartment for 14 years
Roommate 1, who has lived in apartment for 18 months (and who happens to be my girlfriend); we'll call her GF
Roommate 2, who has lived in apartment for about a year; we'll call her #2

The story:
Mary has lived at this address for 14 years and is, for all intents and purposes, the tenant of record. She has all the interactions with the landlord, pays the bills, etc. The GF and #2 rent rooms from her, not from the landlord. The GF and #2 are not on the lease. In fact, they have no lease.

When she first moved in years ago, Mary presumably paid the full deposit and first/last month's rent based on the 1994 rent.

When roommates come in and out, they pay a deposit and first/last month to Mary. What Mary does with the money, we don't know. Obviously, she should bank the deposit for when the roommates leave, but it's unclear whether she does.

Last month, #2 announced that she was moving in with her boyfriend. She's gone. Mary has not yet rented that room.

A couple weeks ago, the GF was offered an apartment in another city that considerably shortens her commute. She accepted it and told Mary that she would be moving out next month.

Mary is pissed that she now has to find two new tenants.

In the 18 months that the GF has lived there, rent has gone up. Mary is now telling the GF that she must pay the difference between the actual last month's rent, and the "last month's rent" she paid when she moved in. Her reasoning is that she's suddenly without roommates and will incur extra expenses. (My response to that, which is pretty much irrelevant, is "tough shit, Mary.")

I've never heard of this before, and it sounds pretty shady to me. I've lived in places with multiple rent increases, and I've never been asked to pay the difference. Is this normal practice? Is it allowable, even? If not, any tips on how say No, and still get the deposit back?

posted by mudpuppie to work & money (11 comments total)

Uh, no, that's shady. Mary is paying VERY CLOSE to the same rent she paid in 1994 (the increase is only a few percentage points annually) and is probably gouging these tenants anyway.

She could contact the SF Tenants' Union for advice, though they may only suggest small claims court. How much does she have in writing from Mary? Does she know the actual landlord's name?
posted by liketitanic at 4:51 PM on October 7, 2008

I don't know about your jurisdiction, however in mine, landlords are required to pay interest on any deposits at a fair rate. If this is the case, an argument could be made that the difference is already made up by that.
posted by scabrous at 5:57 PM on October 7, 2008

It seems fair to me that your girlfriend should pay the last month of rent at the current rate, I don't see what the big deal is here.
posted by The Monkey at 6:19 PM on October 7, 2008

Nope, no, she already paid last month and that's done. Mary can go hang. However, in my passive aggressive way, I'd suggest that your gf try to move out like a week or so before the end of the month. That way, she can tell Mary, well, prorate the rent increase and also, she's out and that's that.
posted by mygothlaundry at 6:37 PM on October 7, 2008

I just signed a lease where the 2nd year had a larger first/last + deposit than the 1st. I made up the difference when I signed, and it was spelled out. It seems to me that if Mary really wanted the difference, she should have asked for it when she increased the rent.
posted by sbutler at 7:01 PM on October 7, 2008 [1 favorite]

In the 18 months that the GF has lived there, rent has gone up.

Whose rent? What Mary pays the landlord or what GF pays Mary? Do you know what Mary's paying and how it relates to what she's charging?
posted by winston at 7:43 PM on October 7, 2008

this is why legalfilter isn't great - nobody knows what the law is in california at all, let alone for your specific circumstances.... call someone who knows! that said - where I live - replenishing the last month when rent goes up is legal (and makes sense). And mary's finances have no bearing on the legality of the situation. Call legal aid!
posted by moxiedoll at 7:43 PM on October 7, 2008

Thanks, y'all.

this is why legalfilter isn't great - nobody knows what the law is in california at all, let alone for your specific circumstances.... call someone who knows!

Well, duh. Except you're wrong -- this is what makes AskMetafilter great. This wasn't 'legalfilter.' It was gauge-the-weirdness-of-the-situation-filter. Before spending time contacting the tenants' union, or a lawyer, it makes a lot of sense to gather information. Information such as, "does this sound normal?"

Thanks for all the feedback on both sides.

There's some other shadiness that I forgot, and thus forgot to mention. Mary, as I said, is responsible for paying the utility bills. After she pays them, she posts the bill, along with each tenant's share, and they reimburse her. But. She almost always pays the bills late, and when she does, she figures one third of the late fees into each tenant's share of the utilities.

The whole reason I asked the question is that the GF isn't the complainy sort. She never complained about having to pay for late fees that were Mary's responsibility, and she was inclined just to do what Mary asked and fork over the jacked-up last month's rent. It didn't seem fair to the GF, and I wanted to gather information before discouraging her from just giving in.

And again, that's what makes AskMe great. I am now armed with more info, and can proceed accordingly. Thanks.
posted by mudpuppie at 8:00 PM on October 7, 2008

When I lived in San Francisco ten years ago landlords had to pay 4% interest on deposits. I don't know if that is still the law but it's worth checking into.

I think it's a good idea to contact the tenant's union on this one.
posted by Melsky at 3:30 AM on October 8, 2008

There is almost always something left out.

In these situations, you are stuck, because you are not dealing with the landlord. You are dealing with someone who supposedly deals with the landlord. You have no legal grounds. IANAL, but I spent two years doing real estate, and having to explain to people from California that the law there favors landlords, while the law in NYC is the most pro-tenant in the country.

Again, IANAL, but:

But you're not dealing with the landlord. You are a sublessee. Unless there's a written agreement here, Mary can't enforce anything. Mary also can hold your deposit for whatever reason she likes, UNLESS YOU GOT IT IN WRITING.

Mary wants parity, BUT she should have asked for that increase every year when you renewed the rental agreement. (And again, unless all of this is in writing, it's all based on thin air.) She doesn't have grounds on the basis that she's going to incur expenses.

All of that said, you're probably not going to get the deposit back, or as much of it as you want. Which is why - after the first time - I never ever gave anyone but the landlord a deposit without having something in writing.

So since you want to get your deposit back, negotiate something with Mary. Offer to help her find replacement roommates. Offer to have the carpet in your room professionally cleaned. Something, anything, be proactive. And whatever you agree on, WRITE IT DOWN AND SIGN IT. Even if Mary won't, put it in a letter and mail it to her that this is what you agreed to do. (It's something, better than nothing, if you have to take it to small claims.)

The only way you were going to get your deposit back is if you told her to take it in lieu of last month's rent. Which is what I did when I moved out of a house in this situation. However, that is not helpful to you now.

Again, IANAL.
posted by micawber at 9:22 AM on October 8, 2008

Something to note, though I'm not sure this is applicable in your jurisdiction, is that the requirements regarding subsidized and rent-controlled property in Michigan, specifically Ann Arbor, prohibit charging more than the monthly controlled rent to subletters. If you charge them more than it costs you, you can be either forced to go to market rate (retroactively, even!) and prosecuted for fraud. If this were to be true in SF as well, then you have a pretty hefty legal cudgel to hold over Mary's head—she's subverting the rent control system, and the authorities take a dim view of that.
posted by klangklangston at 11:07 AM on October 8, 2008