When sisters Alexandra and Marjorie Turcios found a furnished, two-bedroom Mission District apartment last fall, they thought they’d stumbled upon the perfect place to call home.
But it didn’t take long for their happy living situation to become a headache—and ultimately spiral into a stressful, litigious mess.
Through a series of mishaps and suspicious behaviors, the Turcios discovered the person renting the unit to them was charging hundreds more per month than what he was paying the landlord, making thousands in profit off the sisters while living out of state.
“We were shocked,” Alexandra said. “To strip so much economic power from people in a city that’s already so difficult to live in? It’s ethically wrong.”
Their situation—a master tenant ripping off subtenants to make money—isn’t uncommon in San Francisco, where housing is both competitive and expensive.
Joseph Tobener, a longtime San Francisco tenant rights lawyer, said he’s dealt with hundreds of such cases over the years. Tenants have pretty robust protections in rent-controlled properties, which includes most buildings constructed before June 13, 1979, he said. But in homes without rent control? Not so much.
“In a non-rent controlled building, it’s kind of a free-for-all,” he said.
In most cases, master tenants in non-rent controlled buildings can legally charge whatever they want—even if it gouges the people living there. Tenant rights advocates say the status quo can tacitly encourage profiteering.
“Of course it’s unethical, but this is one of the inherent problems of capitalism: Capitalism doesn’t require ethics,” said Tom Elke, a tenant rights attorney in San Francisco. In buildings without rent stabilization, master tenants can charge as much as they can find someone willing to pay.
While the Turcios sisters’ case falls outside of the jurisdiction of the San Francisco Rent Board, which only adjudicates rent gouging in pre-1979 buildings, they’re fighting back by taking their former master tenant to small claims court.
“If we could go back in time, we’d totally redo everything,” Alexandra said, adding that she and her sister are sharing their story to help others avoid a similar situation. “People moving to SF should be wary of a scam like this.”
A nasty surprise
One of the first signs something was wrong was that the sisters were unable to buzz guests or deliveries up to their fifth-floor apartment at 380 14th St. Instead, the notifications would go to their ostensible landlord, Kevin Chen, who insisted that he get them on his phone.
“It was incredibly inconvenient,” Marjorie said. “We had packages stolen, friends left on the street.”
Then, when the building had a boiler problem in April that meant the loss of hot water for a week, the sisters were forced to shower at the gym or at friends’ houses.
When they asked Chen about rent restitution, he indicated that it wasn’t his decision to make. His response was the ultimate red flag.
The situation came to a head in May, when the women met the owner of the apartment, who had decided to sell the unit. She hadn’t realized that Chen had sublet the apartment, the sisters say, and disclosed the total rent she was charging for it.
The sisters initially assumed that Chen either owned the apartment or had rented it to them with the owner’s blessing. In fact, he was subleasing it out without the landlord’s knowledge, they say.
“When she heard what we were paying, her jaw dropped,” Alexandra said.
Chen had charged them $4,500 for the two-bedroom, while he was only paying $3,800. Over the eight months that the Turcios sisters lived there, they say they paid Chen an excess of more than $5,000 over his rental costs.
The property owner terminated Chen’s lease when she discovered what he was doing, and the women scrambled to move out a month earlier than expected. While the owner was open to issuing a new lease, Marjorie, who works in education, had already planned to move out of San Francisco—primarily because of the expensive cost of living.
The duo tried and failed to get Chen to return a portion of the excess money he charged by appealing to his better angels, but he refused. After consulting with several lawyers, they decided to take Chen to small claims court to try to win back their cash.
The sisters filed a complaint on May 23 and are seeking $8,391 in restitution, including special damages, abrupt moving fees, additional living costs and the overcharge.
“It’s not just about the money. It’s about the principle,” Alexandra said. “I want other people to be able to learn from this situation.”
Through a lawyer, Chen denied any wrongdoing.
“We are confident that the court will find the plaintiffs’ narrative and legal theories to be inconsistent with the facts and regulations enforced by the City of San Francisco,” attorney Etan Z. Fraser told The Standard via email. “Mr. Chen is an upstanding member of the community, and will defend his good name against any defamatory statements made by the plaintiffs to the press.”
Avoiding the pitfalls
Experts admit that the Turcios sisters were stuck in a bad situation.
“Subtenants get a raw deal in San Francisco,” said Roisin Isner, director of activism and operations at the SF Tenants Union. “Depending on their situations, market rate subtenants can be left with little to no protections.”
Those who sublease a room in a building constructed before June 13, 1979 (the cut-off date for rent control) are shielded against major price increases or gouging. People who don’t—and fail to ask the right questions or read the fine print—are more likely to get screwed.
If a master tenant in a rent-controlled unit tries to charge someone more than a proportional share of the rent, it’s illegal rent gouging, and they can wind up paying back the excess, with interest. Those kinds of cases come up frequently, Tobener said.
“Ninety-percent of master tenants are fine,” he added. “But every so often they’re greedy.”
In those cases, tenants can fight back. That’s why tenant rights attorney Elke suggests finding a rent-controlled apartment, even if it means sacrificing better views, hardwood floors or parking.
“You have many more legal protections,” Elke said. “This situation is like a parable that proves the rule.”
There are a handful of best practices to follow before signing a lease. First, look up the age of the building, to know if it’s covered by rent control rules. Ask whether the person you’re renting from owns the apartment, and to see the original lease if not. They’re legally required to disclose the total cost for the apartment, so make sure to ask about it. If they misrepresent the number, they could be on the hook for fraud charges.
Looking back, both sisters regret not asking for more details before moving in. “We should have asked whether he owned the apartment, and, if not, to see the original lease,” Alexandra admits.
“Unfortunately, it’s buyer beware,” Elke said. He and Tobener both said the Turcios will likely have a hard time making their argument to a judge unless they can prove that Chen somehow committed fraud in his dealings with them.
While the Turcios sisters wait to see what happens to their small claims case, they’re spreading the word to be wary when signing a new lease in the city.
“This is your home, your safe haven: Don’t take that lightly and do your due diligence,” Alexandra said. “Even though it’s a rental, it should still be a cautious process. Put care into it.”
For example, when Marjorie found a new place to live in Chicago, her lease was 67 pages long. She carefully pored over every single one.
“We hope that we can help people be more knowledgeable,” Marjorie said. “So they don’t get taken advantage of like us.”