Fee for a Tenant Attorney

Courtroom

Many tenants in need of legal assistance, as well as landlords involved in legal cases with tenants, often ask about the fee for a tenant attorney.  Most people are familiar with the general model for hiring an attorney: the attorney takes an upfront amount of money and bills the client for their time.  The other common type of billing is a contingency fee, where the attorney takes a fixed percentage of the amount recovered from the case.  In Massachusetts, another type of payment for legal services is also available to tenants: fee shifting.

Fee shifting is a provision in a law that requires the losing party to pay the other side’s legal fees.  Generally, under the American Rule for legal fees, each side bears their own legals fees in a legal matter.  If you spend $10,000 in legal fees to recover a judgment of $5,000, you only get $5,000 in the end (and will have lost the remaining amount spent on the case).  A fee shifting requirement in a law allows the prevailing party to recover these attorney fees if their case is successful.  Many landlord/tenant laws contain such a provision, where the tenant is awarded reasonable legal fees if the claim is successful.  Importantly, many of these laws do not require the tenant to have accrued the legal fee.  In other words, there is no requirement that the tenant had actually spent money towards paying the attorney: the fee for a tenant attorney is still permitted if the underlining claim is successful.

Fee shifting provides a powerful incentive for tenants to pursue claims against landlords.  Without fee shifting, tenants and lawyers have little incentive to consider taking on claims against landlords.  The damages that could be recovered from one of these claims may be too small to make it worth the trouble.  With fee shifting, however, the fee for a tenant attorney becomes part of the case, and can be recovered through settlement or a judgment from the court.

With this in mind, both tenants and landlords should keep in mind the potential fee for a tenant attorney in evaluating a potential landlord/tenant claim.  The potential for damages in one of these cases is an important factor for both sides in attempting to resolve one of these matters.

Who Pays for Legal Fees in an Eviction Case?

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A central question that anyone in a landlord/tenant case needs to consider is, who pays legal fees in an eviction case?  The answer to this question makes a huge difference in determining whether to pursue a potential claim against a landlord or tenant.

Massachusetts, like most of the country, follows the American Rule in awarding attorney fees in a lawsuit.  Unless there is a law explicitly allowing attorney fees, a prevailing party doesn’t get attorney fees in a lawsuit . . . even if the court determines they were on the “right” side of the law.

The American Rule most directly impacts landlords in eviction cases against tenants.  Landlords generally cannot recover attorney fees in an eviction case against a tenant.  A landlord who prevails in an eviction case is entitled to the “costs” of the case, but this is generally limited to the filing fee of the lawsuit, and not any attorney fees incurred in one of these cases.  Some leases provide for attorney fees if a landlord brings an eviction case in court, but this alone does not guarantee that a landlord will obtain these fees from the tenant: a landlord (like any party in a lawsuit) can only obtain a judgment from a party with assets.   If the tenant does not a steady income, property, or anything else of value, the landlord will have a judgment that they cannot recover.

The same isn’t true for tenants bringing claims against landlords.  Massachusetts has some of the most tenant friendly laws in the country, allowing for legal fees in an eviction case.  Violation of one of Massachusetts’s many landlord/tenant laws, such as the security deposit law, will not only subject a landlord to monetary damages, but require them to pay a “reasonable” attorney fee if the tenant prevails.  For a lengthy eviction case, these attorney fees can be huge.

With this in mind, both landlords and tenants should keep in mind who pays attorney fees in eviction cases when evaluating their options.  For landlords attempting to evict a tenant, strong consideration should be given to working out settlement agreements in lieu of litigating these cases.  The potential risks of fighting one of these cases can be costly (as unfair as this can  be).  For tenants who are dealing with an unfair landlord, Massachusetts’s landlord/attorney laws, which provide for attorney fees for a prevailing tenant, are a strong reason why tenants should speak with an experienced landlord/tenant attorney if they are dealing with a bad landlord.

If you find yourself in either scenario, contact me for a consultation.

Overview of the Massachusetts Security Deposit Law

 

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Ask a room full of lawyers a legal question, and you will likely get a handful of different responses.  I would bet, however, that there is a major exception to this on the question of whether a landlord should accept a security deposit from tenants in Massachusetts.  On that question, Massachusetts landlord attorneys (including your’s truly) would likely uniformly answer no.  A Massachusetts landlord should never accept a security deposit from a tenant.

Why?  The Massachusetts Security Deposit Law is one of the most complex and detailed consumer laws on the books in Massachusetts.  Few lawyers and judges understand the detailed requirements of this law, and I imagine even fewer landlords actually comply with every part of it.  The Massachusetts Security Deposit Law has lengthy provisions for accepting, holding, and returning a deposit, making the acceptance of a security deposit a huge hassle for landlords.

The danger for landlords under the Massachusetts Security Deposit Law are the penalties associated with a landlord’s failure to comply with this law.  Several specific violations will result in a tenant being entitled to treble damages (three times the tenant’s security deposit), costs, and attorney fees.  This means, for example, that a violation of a tenant’s $500 security deposit can result in over $2,000 of damages, if the security deposit is not handled correctly.  If the tenant is represented by an attorney, expect these damages to be even higher.

An even greater danger to landlords is the use of the Massachusetts Security Deposit Law as a defense to a eviction case.  A recent Supreme Judicial Court decision has held that violation of this law not only entitles a tenant to monetary damages, but also serves as a defense to an eviction.  In other words, if a landlord fails to comply with the Massachusetts Security Deposit Law, he or she likely will not be able to evict a tenant, and may face a huge penalty from the court.

What can a landlord do to avoid the Massachusetts Security Deposit Law but still get some security from their tenants?  Plan accordingly by incorporating a “security deposit” into your monthly rent.  For example, say you wish to rent an apartment for $1000/month, and want a security deposit.  Instead of renting for $1000/month, add $80-$100 more to the rent ($1000/12 months = $83.33) , and set that money aside.  If, at the end of the lease, there is damage in the apartment, you’ll have the funds to deal with it, without the burdens of the Massachusetts Security Deposit Law.  Even better, if there are no damages in the rental property, you’ll have some extra cash at the end of the tenancy.

If you’re a landlord and think you have violated the Massachusetts Security Deposit Law, don’t despair: it may be possible to remedy the situation by returning the deposit or reaching a resolution with the tenant.  To do so, contact an experienced landlord/tenant attorney as soon as possible.

 

Aviksis v. Murray: Payment of Attorney Fees in Landlord/Tenant Cases

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The Massachusetts Appeals Court issued an important decision today on the right of parties to collect attorney fees in landlord/tenant cases.  In Aviksis v. Murray, the Court held that “guarantors” of a landlord/tenant lease could not rely on laws that allow tenants to collect attorney fees for cases brought against landlords for failure to comply with any “covenant or term of the lease” or in the defense of a lawsuit brought by the landlord. A gurantor of a lease, simply enough, is someone who assumes liability if rent is not paid or damages occur to the rental property. This is often required for tenants with limited credit history or no references.
A little background on attorney fees in civil cases.  Under what is called the American Rule, each side in a civil case pays their own attorney fees.  Even if you win the case and a judgment against the other side, you are still on the hook for your legal costs.  The exception to this rule is when a law allows one side to recover legal costs against the other or, as is common in leases, a contract provision allowing a party to obtain attorney fees if they ever need to go to Court.
In these situations where the lease allows the landlord to collect attorney fees against tenants, Massachusetts law provides an important safeguard for tenants:  tenants, in such cases, can likewise obtain legal fees against landlords for a landlord’s failure to comply with any “covenant or term of the lease” or in the defense of a lawsuit brought by the landlord. . . even if the lease does not explicitly allow attorney fees for the tenant.

In Aviksis, several tenants brought suit against their landlord for damages arising from water in the apartment.  A father of one of the tenants was a guarantor on the lease and accordingly, was countersued by the landlord for these damages.  The father won his case and attempted to recover his legal fees under the law discussed above:  G.L. c. 186, § 20.  The question for the Court was whether a guarantor of a lease was entitled to attorney fees under this law.

The Court relied on the plain meaning of the statute and held that tenants, and tenants alone, are entitled to the provisions of G.L. c. 186, § 20.  Even though the guarantor may have been in the tenants “shoes” for the purposes of this case, the guarantor does not have the same rights as the tenants under this law.

What are the take home points of Aviksis v. Murray?

  • Under Massachusetts landlord/tenant law, guarantors of leases are not treated the same as tenants.  In short, if you assume liability for a lease, do not expect to get the same protections afforded to tenants under the law.
  • Obtaining attorney fees continues to be the exception, rather than the rule, in civil litigation . . . something to always consider in deciding whether to pursue litigation.