Top Five Landlord Mistakes

Landlord Mistakes

In this blog post, I want to discuss the top five landlord mistakes made by those renting residential property in Massachusetts.   Massachusetts has numerous laws protecting tenants, and a landlord’s failure to comply with these regulations can cause major problems down the road.  Fortunately, these landlord mistakes are easily avoidable.

 1.  Accepting a Security Deposit From a Tenant

Few things get a landlord into more trouble than Massachusetts’s security deposit law.  Take a minute (or several!), attempt to figure out all of this law’s requirements, and you’ll learn quickly why the law is a disaster waiting to happen.  Few landlords comply with all of the law’s detailed requirements, and the failure to do so can result in treble damages, attorney fees, and costs.  The risks for landlords just aren’t worth it.

As I have suggested before, a landlord who wants a security deposit should make this part of their monthly rent.  For example, if a landlord wants a $1,200 security deposit, they should add (or set aside) $100 each month, rather than requesting it upfront from the tenant.  This keeps a landlord from having to comply with the security deposit requirements.  Moreover, unlike a security deposit, this money belongs to the landlord if no repairs need to be done at the end of the tenancy.

2.  Not Choosing Tenants Carefully 

Another common landlord mistake is not choosing tenants carefully.  A bad tenant can cause enormous problems to landlords.  Evictions can be long and expensive, and collecting a judgment against a tenant can be difficult.  Try to avoid these problems in the first place by selecting  reputable tenants.

3.  Not Using a Written Rental Agreement 

Landlords should always use a written rental agreement with tenants, regardless of whether it is a a month-to-month agreement or lease.  A written agreement lays out all of the expectations of the landlord and tenant, and can avoid problems from coming up later on.  Moreover, if a landlord expects a tenant to pay for any of the apartment’s utilities, a written agreement is a requirement under the state sanitary code.

4.  Failing to Maintain Rental Property

If you own rental property, the law requires you to maintain it.  Massachusetts’s state sanitary code contains detailed regulations for rental property, and many towns and cities have their own requirements for rental property as well.  A tenant must generally provide notice, and a reasonable opportunity to the landlord to address the problem, before the landlord can become liable for not maintaining the property, but a landlord should avoid these problems in the first place by keeping on top of a rental property’s maintenance and care.

5.  Attempting an Eviction Without An Attorney 

If a landlord needs to get rid of a tenant, an eviction is required.  A landlord should never try and do an eviction on their own.  While it may be tempting to try and avoid the costs of an eviction, the consequences of making a mistake in one of these cases can be far more expensive down the line.  Moreover, an experienced landlord attorney can often help finds ways to make the eviction process go as quickly as possible.

If you find yourself in need of legal assistance, contact me for a consultation.

Advice for Landlords

Apt

In this blog post, I am going to give you the single, most important piece of advice for landlords in Massachusetts.  This advice might sound obvious, but believe me when I tell you that it is often ignored.  Ready for it?  Here it is: speak to a landlord/tenant attorney before becoming a Massachusetts landlord.  

I have met countless landlords who start renting homes and apartments without any knowledge of Massachusetts landlord/tenant laws.  Often, these landlords end up being okay in the beginning, when things go well with their tenants.  When things go bad, however, they can get really bad: not following Massachusetts’s extensive landlord/tenant laws can have dire consequences for landlords down the line.

Nearly all of these problems can be avoided by following the law correctly in the first place.  A Massachusetts landlord/tenant lawyer can help you draft a lease, decide on the proper terms of your tenancy, and avoid many of the pitfalls that inexperienced landlords in Massachusetts often make.  Few, if any of us, would start a business without learning the applicable law.  Why should being a landlord be any different?

This advice for landlords stresses an important point: you don’t need to hire a lawyer only when things go wrong.  A landlord/tenant attorney can be a great help to you in becoming a landlord, and help you avoid major problems from not following the law.

Important Things to Include in a Lease

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Signing a lease is an important part of the landlord/tenant process.  A leases spells out the terms of the landlord/tenant relationship, namely the amount of rent and how long the lease will last.  Most landlords use a standard form lease that is pre-written, and only requires the landlord to fill in the blanks (The Greater Boston Real Estate Board has a form lease that is popular for landlords in the Boston area).  Form leases are extremely helpful in drafting a lease; there is no need to “recreate the wheel” in preparing a new agreement when a model lease is available.

However, when using a sample lease, landlords should note that there are important things to include in a lease, many of which are not found in these sample drafts.  Here are a few important things that I think every lease should include:

Payment of Utilities:  Massachusetts law requires landlords to provide all utilities to tenants, but allows landlords to “transfer” the payment of these utilities . . . in writing.  Failure to include, in writing, a requirement that the tenant pay these utilities can be a major problem for a landlord.  As such, a statement that the tenant must pay for utilities is one of the most important things to include in a lease.

No Security Deposit:  The Massachusetts Security Deposit Law is a pro-tenant law that has many traps for landlords.  As such, I (and most other attorneys) advise landlords not to accept security deposits.  If you follow this wise advice, include a term in the lease that the landlord isn’t accepting a security deposit from the tenant.  This helps prevent a claim for a tenant, down the road, that such a deposit was taken by the landlord, setting up a potential problem at the end of the lease.

Description of the Property:  If the rental property is something that is unambiguous (such as an apartment), this might not be necessary.  However, if there is any chance that the scope of the rental property may be misconstrued, it is worth including a description of what is, and what isn’t, included in the lease.  Use of the backyard, driveway, and other common areas are all important things that should be mentioned in the lease.

Allowance of Guests:  The difference between a guest v. a permanent tenant is not always clear.  While a tenant generally has a right to have guests at the rental property, only those persons stated on the lease are allowed to live in the property.  To keep the difference between a guest and tenant clear, consider a term about how long guests are allowed at the property.  This can be helpful if, down the road, the tenant allows others to move into the rental property.

No Smoking:  If you do not want your tenants to smoke in the rental property, be sure to include it as part of the lease agreement.

By no means is this a comprehensive list of everything that should be included in a lease; this will depend on your particular circumstances.  For help in drafting a lease, contact me for a consultation.

Raises in Rent

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Raising rent is always a contentious issue among Massachusetts landlords and tenants.  I often get asked, are raises in rent allowed?  The answer depends upon the rental agreement between the parties: whether there is a lease or tenancy-at-will.

A lease is where the landlord and tenant contract for the rental of property, most often in one year terms.  With a lease, the rent is fixed, and unless the lease says otherwise, raises in rent are not allowed.  Some leases have provisions that apply to raises in rent if the lease continues beyond its original terms, so landlords and tenants should read these agreements carefully.

A tenancy-at-will is an ongoing, indefinite rental agreement, which either party can break at any time (with proper notice to the other side).  Here, raises in rent are allowed: the landlord must provide the tenant with at least thirty days notice (and more if the rental period is longer than the standard month that these types of rental agreements usually go for).

For subsidized housing (such as the federal government’s Section 8 program), special rules often apply for raises in rent.  Landlords and tenants should carefully check on the terms of these leases and applicable laws and regulations.

Raises in rent are not allowed as a form of “retaliation” against a tenant for reporting bad conditions about the property.  Landlords who raise rent solely for this purpose face stiff legal penalties.  The same is true if the raise in rent is due to discrimination based on a protected class, such as race or ethnicity.

To avoid potential problems down the road, landlords who want to raise rent should reach out to their tenants in advance and discuss the need for these increases.

Recommended Resource: 99 Signs You Shouldn’t Rent To That Tenant

Selecting tenants is one of the most challenging jobs for a landlord.  Renting to anyone comes with risk, and choosing the wrong tenants can be costly, both in time and money.  Landlords should use extreme care in the tenant screening process.  A helpful resource for landlords in finding the right tenant is 99 Signs You Shouldn’t Rent To That Tenant.  This guide offers things to watch out for when meeting potential tenants.

When selecting tenants, landlords should consider keeping a log of each person who views the rental property, and any specific reasons why the landlord did not offer to rent to the prospective tenants.  This will help if the landlord is ever accused of discrimination or unlawfully refusing to rent to a tenant (topics I will discuss in a future post).

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.

Breaking a Landlord/Tenant Lease

Contract

What’s a lease?  A lease, simply enough, is a contract for the rental of property.  As such, a lease is enforceable at law.  If a tenant signs a lease (which is usually for a one-year term), the tenant is liable for rental payments during that period of time.

A few scenarios exist where a tenant can lawfully break a lease: active service in the military, health, safety or privacy violations by the landlord, or domestic violence abuse.  Besides those scenarios, a tenant cannot simply walk away from a lease because they choose to.  If they do, a landlord has a right to sue the tenant for the outstanding rent.

If a landlord is in a situation where the tenant breaks the lease, the landlord should try to lessen their damages by finding a new tenant.  Even if it is possible for the landlord to sue the tenant for the full amount of owed rent, collecting a judgment against a tenant is difficult.  The landlord is best off trying to recoup their losses by finding a new tenant as soon as possible.  If the landlord does end up pursuing a case against a tenant, the landlord will have a stronger argument by showing that he or she made an effort to lessen the damages from the breach of the lease, rather than just sitting idle as the rent went unpaid.  With this in mind, landlords should keep detailed records of all efforts to find a replacement tenant.

What’s a tenant to do if they need to break a lease?  Work out a deal with the landlord.  For example, a tenant could offer to assist the landlord in finding a new replacement tenant, by helping to advertise and show the apartment.  Both sides are best off trying to find an amicable solution to the problem in lieu of taking the matter to court.