Security Deposit Violations in Massachusetts

Massachusetts heavily regulates security deposits for residential tenancies. The law covers nearly every aspect of the acceptance, holding, and return of a security deposit.

Security deposit violations can occur in many ways. The penalties for not complying with this law can result in a tenant being entitled to the immediate return of their deposit or, in severe cases, treble damages, costs, and attorney fees against the landlord. Here are some common security deposit violations.

Please note that this list is not all of the security deposit requirements; one should always consult the law (or a landlord-tenant lawyer) to ensure compliance with this detailed law.

Proper Receipt

A landlord must give the tenant a receipt indicating, among other things, the amount collected for a security deposit and the name of the person receiving it. This receipt must include the date on which the deposit is received and a description of the rented premises. The landlord (or the landlord’s agent) must sign this receipt.

Separate Bank Account

The landlord must put this security deposit into a separate bank account, located in Massachusetts. Within thirty days of depositing these funds, the landlord must provide the tenant with name and location of this bank and the bank account number.

Timely Return of the Security Deposit

Most security deposit violations occur during the process of returning the security deposit. A landlord may only keep a portion of a security deposit for 1) unpaid rent or water charges 2) unpaid increase in real estate taxes which the tenant is obligated to pay (rare for most residential tenancies) or 3) a reasonable amount necessary to repair any damage to the rental unit, reasonable wear and tear excluded.

Any portion of the security deposit that the landlord is not entitled to keep must be returned to the tenant within thirty days after the end of the tenancy. Failure to do so is one of the most severe violations of the security deposit law, and will likely subject a landlord to the maximum penalties available under the law.

Conclusion

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

3 Things Massachusetts Landlords Can Do To Stay Out of Trouble

Being a Massachusetts landlord isn’t easy. Our state has extensive regulations on the landlord-tenant relationship, and many laws in favor of tenants. Here, I want to share three tips for Massachusetts landlords that can help avoid legal problems down the road.

1.Choose Good Tenants

The selection of tenants is one of, if not the most, important part of the landlord-tenant process. Good tenants pay their rent, respect rental property, and are a pleasure to deal with. Bad tenants are just the opposite.

The important reason for choosing good tenants is to avoid the eviction process, at all costs. Evictions in Massachusetts are expensive and often favor the tenant. Rarely do Massachusetts landlords ever come out completely whole at the end of the process. Picking good tenants is the best way to avoid an eviction from happening in the first place.

2.Keep Great Records

As a landlord, you are running a business. You should treat it like that by keeping extensive, detailed records on everything about your rental properties. This includes the lease and other paperwork signed at the start of the tenancy, a ledger of all rent received from your tenants, and any repairs or maintenance you perform on the property.

Massachusetts landlords who keep good records save themselves enormous time, money, and liability if a dispute ever arises with a tenant. For example, if a tenant complains that a landlord never maintained their property, detailed records on a landlord’s maintenance and repairs can quickly refute such a claim.

3.Don’t Take a Security Deposit!

As I’ve written before, Massachusetts’s security deposit law is long, detailed, and nearly impossible to fully comply with. Rarely have I seen Massachusetts landlords follow each provision of this law, and the failure to do so can result in huge penalties.

What’s the best way to avoid this? Don’t take a security deposit in the first place.

Conclusion

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

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.

Cambridge-Street-Realty-LLC-v.-Stewart

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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