Massachusetts Security Deposits 101

This Wednesday, I will be moderating a panel at the Boston Bar Association on Massachusetts’s security deposit law. Most people, especially landlords, are often surprised at how something as mundane as a security deposit law can be so complex and confusing.

Those who ignore this law, however, do so at their peril. The law is incredibly detailed and complex, and a trap for the unwary.

Overview of Security Deposits

The Massachusetts security deposit law regulates the receipt, holding, and return of these funds from a tenant. A central theme of this law is that these funds are the tenant’s money. By holding this money from the tenant, a landlord is required to exercise extreme care with all aspects of these funds.

For these reasons, security deposits are risky, given the many requirements of this law and, as discussed below, the penalties for noncompliance.

Security Deposit Violations

Security deposit violations can be severe. Failure to comply with the law can result in treble damages, court costs, and attorney fees. This means that even a small security deposit can result in an enormous judgment against a landlord if the landlord violates this law.

It is a common misconception that every violation of the security deposit law results in triple damages against a landlord. A recent court decision clarified that not all violations result in treble damages. Rather, some violations simply entitle the tenant to the immediate return of the deposit, while others will be grounds for full damages against a landlord.

Conclusion

If you need assistance with a security deposit matter, contact me for a consultation.

A Landlord’s Guide to the Massachusetts State Sanitary Code

A recent, horrific story from Everett is a good reminder of the importance of knowing (and following) the Massachusetts state sanitary code.

This article discusses how two Everett landlords had fifty-nine code violations in their residential apartments, with over nineteen people living in the home. Two firefighters were tragically burned in a fire last summer resulting from these housing conditions. These landlords, most appropriately, are facing criminal charges for their neglect of this building.

What is the Massachusetts State Sanitary Code?

The Massachusetts state sanitary code sets the minimum standards for housing in the Commonwealth of Massachusetts.  The code covers nearly any matter related to residential housing, including cooking and bathroom facilities, required utilities for residential housing, and safety requirements.

Depending on the town or city, there may be additional, local housing requirements as well. The Massachusetts state sanitary code, however, covers all of the state and is the baseline for a landlord’s responsibility for rental housing.

How is the Massachusetts State Sanitary Code Enforced?

Local jurisdictions generally enforce the state sanitary code through a board of health or inspectional services department. The City of Boston’s Inspectional Services Department (“ISD”) is the most well known of these agencies, and is often called upon when a question arises about a Boston landlord’s non-compliance with the code.

If a tenant files a complaint with one of these agencies, the agency will generally send an inspector to the apartment and cite the landlord for any violations of the code. The landlord is then given a deadline for correcting these violations. Failure to do so can result in penalties and, in a case like this article discusses, possible criminal charges.

Tenants, in certain circumstances, can also enforce the state sanitary code on their own. Massachusetts law allows a tenant to file a petition to enforce the code, if the local agency refuses to take action.

Legal Ramifications for Non-Compliance With the State Sanitary Code

In addition to facing penalties from the the town or city, non-compliance with the state sanitary code also comes with legal ramifications. A landlord who fails to comply with the code may be subject to violation of the implied warranty of habitability, covenant of quiet enjoyment, or the Consumer Protection Law. An official citation from one of these agencies can be compelling proof that the landlord has not complied with these laws.

It is a common misconception that any violation of the state sanitary code is grounds for legal action by a tenant. Minor violations of the code are often not enough to constitute a viable cause of action against a landlord. Nonetheless, landlords need to take care in ensuring that they comply with these detailed regulations.

Practical Implications

It is rare for any landlord to be 100% compliant with the code at any given time, given its many, many regulations. A landlord who learns that they are non-compliant with the state sanitary code needs to act quickly in addressing the problem. Doing so avoids a larger problem developing in the future.

Landlords also need to be aware of Massachusetts’s law on retaliation. A landlord cannot “punish” a tenant who makes a code complaint, through raising the rent, starting an eviction, or doing anything else negative against the tenant.

In many towns and cities, landlords can request their own inspection of a rental unit, to determine what is necessary for complying with the code. This is worth considering prior to renting a unit, or when a landlord has a vacancy. Landlords should also always keep good records on all work done on their rental units.

Conclusion

If you need assistance with a landlord-tenant matter, contact me for a consultation.

Notice to Quit for Massachusetts Evictions

The Supreme Judicial Court issued an important decision this week clarifying the notice to quit requirement for Massachusetts evictions. The decision, Cambridge Street Realty v. Stewart, is included below.

Cambridge Street Realty concerns several legal issues that are of importance to Massachusetts eviction law. Here, I’ll focus on the decision’s discussion of the notice to quit, which is a requirement for nearly all evictions in Massachusetts.

What is a Notice to Quit?

A notice to quit is a legal document informing a tenant that the landlord is terminating their tenancy. This is required for nearly all evictions in Massachusetts and requires the landlord to prove that it served one of these notices to the tenant, prior to starting an eviction. Failure to provide an adequate notice to quit is often grounds for dismissing an eviction case.

The time required in the notice to quit generally depends upon the type of tenancy and the reason for eviction. In Cambridge Street Realty, the tenant was in Section 8 housing, which is federally subsidized and generally has additional, specific requirements for such a notice. Here, the tenant alleged that the notice to quit was defective, but only raised this argument after the eviction case was over.

What Does a Defective Notice Mean For An Eviction Case?

The Court in Cambridge Street Realty needed to determine what impact a defective notice to quit has on an eviction. Here, the tenant argued that a notice to quit is a jurisdictional requirement, meaning that the failure to provide an adequate notice to quit could be raised at any time . . . even after the eviction is over.

The Court rejected this argument. While a notice to quit is a requirement for most evictions, a tenant must adequately raise a defective notice as part of their eviction defense. Failure to do so means that the tenant waived the right to challenge the eviction on these grounds. As such, a tenant is unable to come back to court later and attempt to reverse an eviction, by arguing that the original notice to quit was in error.

Practical Implications

Cambridge Street Realty is an important win for Massachusetts landlords. Making a notice to quit a jurisdictional requirement for evictions would have had precarious implications for landlords. Such an outcome could have conceivably allowed a tenant to void an eviction well after it occurred, leaving possession of a rental apartment in flux.

It would, however, be shortsighted to interpret Cambridge Street Realty as diminishing the notice to quit requirement for Massachusetts evictions. A tenant who does raise the adequacy of a notice to quit in court will be heard on this issue, and will be successful if the landlord provided the tenant with an improper notice. This is one reason, among many, that Massachusetts landlords should consider speaking with a landlord-tenant attorney for assistance with an eviction.

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Five Things That All Massachusetts Landlords Need to Know

Being a Massachusetts landlord isn’t easy.   There are many, many cases of landlords who have run afoul of the state’s numerous laws regulating landlord conduct; most of which favor the tenant.  Here are five things that  every Massachusetts landlord needs to know.

1. A Landlord is Responsible for Maintaining Rental Property

While this may be obvious to most landlords, it is worth a mention here.  A landlord is responsible for maintaining their rental property, including compliance with the state’s sanitary code.

This is in contrast to commercial real estate, where a landlord is permitted to offer a property “as is.”  Doing this is strictly prohibited for residential property; even if a landlord and tenant signed an agreement that excused a landlord from taking care of a rental property, it would be void and unenforceable at law.

2. Fair Housing Laws Exist  (And Are Enforced)

Both federal and Massachusetts law ban housing discrimination.  Housing discrimination laws are enforced, and come with steep penalties for landlords who violate these provisions.  A Massachusetts landlord needs to know these laws and be aware of the kind of conduct that violates these regulations.  

3. Security Deposits Are Heavily Regulated in Massachusetts

Massachusetts’s security deposit law is among the most complex and confusing laws in the state, filled with traps for the unwary.   Few Massachusetts landlords fully comply with its provisions, and failure to do so can result in treble damages, attorney fees, and costs against a landlord.  Massachusetts landlords should strongly consider not taking a security deposit.  If they do, it is essential that they learn and abide by this law’s detailed requirements. 

4. Good Tenants Are a Good Investment 

What’s the best way to avoid problems with tenants?  Choose good tenants.  The extra time and expense in picking good candidates for rental units are worth its expense, many, many times over. 

5. Evictions Are Costly

Massachusetts law permits a landlord to bring an eviction against a tenant for outstanding rent, and a civil action for damage to a rental unit.  However, even under the best case scenario, it is rare for a landlord to be made completely whole through an eviction proceeding or lawsuit.  The expenses of bringing such a case, and the difficulties of enforcing one of these judgments, are factors that every Massachusetts landlord needs to know.

Conclusion

If you need assistance with a landlord-tenant matter, contact me for a consultation. 

Chapter 93A for Landlords and Tenants

The Appeals Court issued an important decision this week about the Consumer Protection Law (commonly known as “Chapter 93A”, in reference to its location in the state law) and its potential application for landlords and tenants.  The decision, Exhibit Source, Inc. v. Wells Avenue Business Center, is included below.

This decision concerns a dispute involving a commercial landlord-tenant relationship.  Nonetheless, this case has important lessons in the context of Chapter 93A for landlords and tenants with residential tenancies.

Overview of Chapter 93A

Chapter 93A prohibits “unfair or deceptive” business practices.  There are two main parts of this law: Section 9, for unfair or deceptive practices between consumers and businesses, and Section 11,  for unfair or deceptive practices between businesses.  While the concept of the law is generally the same for both sections, the requirements for each are slightly different.  Here, I’ll be focusing on Section 9.

“Unfair or deceptive” business practices is purposely intended to be broad, and allows for a wide array of potential applications.  Chapter 93A allows for monetary damages for violation of this law, and possible treble damages if the conduct was willful or knowing.  The law, importantly, allows for attorney fees as well.

For a consumer to bring a Chapter 93A case, they must send the business a demand letter first and allow them thirty days to respond, before filing suit.  This letter is not required if the consumer is bringing a Chapter 93A case as a counterclaim (a lawsuit filed in response to an existing lawsuit).  A letter is also not required if the business does not have an office or assets in Massachusetts.

This demand letter is a critical requirement for a Chapter 93A case.  Failure to comply with this requirement is often grounds for dismissal.

Chapter 93A for Landlords and Tenants

Exhibit Source, Inc. has several important lessons on how Chapter 93A applies to landlords and tenants.

First, Exhibit Source, Inc. is a good example of  Chapter 93A’s breadth.  Many acts, which might not otherwise be unlawful, can fall within the context of Chapter 93A, making it a powerful tool in pursuing a landlord-tenant dispute.

Second, Exhibit Source, Inc. discusses a central goal of this law: encouraging parties to settle their disputes without going to court.  If a party fails to offer a reasonable settlement offer in response to a Chapter 93A claim, the court can (and most likely will) punish them for this.

For this reason, a landlord who receives a Chapter 93A demand letter needs to properly address it.  Failure to do so can lead to much greater problems later on if the matter winds up in court.

Conclusion

If you need assistance with a Chapter 93A matter, contact me for a consultation.

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Getting Possession of a Rental Unit

Getting possession of a rental unit is the primary goal of an eviction case.  A successful eviction case allows a landlord to legally remove the tenant and their possessions from the rental unit.  The formal court order that allows the landlord to do so is known as an execution, and the process of using this court order for getting possession of a rental unit is commonly referred to as levying the execution.

Evictions 101

Eviction (known in Massachusetts as “summary process” cases) is the required, legal proceeding for obtaining possession of property.  Massachusetts (like nearly all states) is a judicial eviction state: one must bring a formal court proceeding to remove a tenant.  Attempting to remove a tenant without a court order, commonly known as a “self help” eviction, is a serious offense.

If the landlord wins the eviction case, or reaches an agreement for the tenant to move, the court will issue an execution for possession.  This is the court order that permits a landlord to physically remove a tenant and their possessions from the rental unit.

Levying the Execution 

 The actual process of getting possession of a rental unit is commonly known as levying the execution.  The tenant must be given 48 hours notice prior to the move out, and service of this notice must be made by a constable or sheriff.  Levying an execution requires the landlord to pay for the moving and storage expenses.  Needless to say, these expenses can add up.

Stay of Execution

A tenant is permitted to request a stay of execution if they believe they need more time to find a new place to live.  The law is written to apply only for tenants involved in a “no-fault” eviction case, where the tenant is not behind on their rent or in violation of a term of their tenancy.  Courts, however, commonly consider stays of execution for all types of tenancies, on the theory that courts have inherent power to manage the eviction process.

Conclusion

Getting possession of a rental unit is not an easy process, and if done incorrectly, can result in enormous costs and expenses that could otherwise be avoided.  For this reason, speak to an experienced landlord-tenant attorney for assistance with such a matter.

Collecting Money Against a Tenant

I’m willing to bet that the issue of collecting money against a tenant is one of the most frequent topics that landlords ask regarding tenants.  This is an important matter that landlords should carefully consider when faced with such a problem.

What Type of Money Is Being Pursued?

On this topic, the first initial question that needs to be determined is the type of money that the landlord wishes to pursue against the tenant.  Generally, there are three types of damages: (1) unpaid rent (2) damages to the apartment and (3) attorney fees.

The first two types of owed money, unpaid rent and damages to the apartment, speak for themselves: if a tenant owes a landlord money, or damages the apartment, the landlord has a legal cause of action against the tenant.

Attorney fees are a different matter.  A landlord generally only has a right to collect attorney fees against a tenant if there is a written agreement providing for this.  If there is no such agreement, the American Rule on legal fees generally controls, which does not allow a party to collect legal fees against an opposing party.

Options for Collecting Money Against a Tenant 

Options for collecting money against a tenant generally consist of the following: (1) a security deposit (2) eviction case or (3) a civil action.

Security DepositMassachusetts’s security deposit law permits a landlord to use a security deposit for unpaid rent and damage to a rental unit.  If a landlord has a security deposit, and a tenant owes rent or has committed damage to the apartment, a landlord (using the proper procedures) may deduct such expenses against the deposit.  A landlord, however, must be extremely careful in handling a security deposit, as a failure to comply with this law can result in treble damages, costs, and attorney fees.

Eviction:  If a landlord is pursuing an eviction against a tenant, they have the option of seeking unpaid rent as part of the eviction case.  This, however, is the only money that may be pursued in an eviction : a landlord is not entitled to any other damages in one of these cases, such as damages to an apartment.  For that, the landlord must pursue a separate civil action.

Civil Action:  A landlord may pursue a civil action against a tenant for any type of owed money.  If the damages are under $7,000, the landlord can go to small claims court; if the damages are greater, they would need to file a regular civil action.

Practical Implications

While a landlord can attempt to collect money against a tenant, doing so is not always prudent.  If the tenant does not have employment or assets, attempting to enforce a judgment against a tenant can be extremely difficult.

Moreover, in the context of an eviction, it is worth considering whether collecting such money is more important than obtaining immediate possession of the apartment.  This is an important consideration in determining whether to fight or settle an eviction case with a tenant.

Conclusion 

Collecting money against a tenant is not an easy endeavor.  Before making a decision on this important topic, speak to an experienced landlord-tenant attorney for help in making this decision.