Rent escrow refers to the holding of rent money while a legal matter is ongoing. The questions most commonly asked about rent escrow in Massachusetts are when, and how, it is allowed.
Rent Escrow Before An Eviction Case
Without a court order, there is no requirement for tenants to escrow rent. This is most relevant when tenants are withholding rent from a landlord due to allegations that a landlord is not properly maintaining a rental unit. While a tenant is allowed to withhold rent in such cases, a tenant does not have to hold this rent money in a separate bank account.
In practice, however, any tenant who withholds rent should escrow this money. If the matter ends up in court, a tenant will inevitably be asked where the owed money went. A tenant who cannot account for such funds can (and likely will) lose credibility with the court.
Rent Escrow During An Eviction Case
If an eviction case has started, a court has the authority to require rent escrow from a tenant. This, however, will not happen automatically. When making such a request, landlords need to articulate why a tenant should be escrowing rent. Without providing a supporting basis, such requests will often not be successful in most courts.
Per the seminal case on this matter, Davis v. Comerford, a court must consider the following factors for such a request:
- A landlord’s entitlement to use-and-occupancy funds from a tenant
- The amount of rent due
- The landlord’s monthly obligations
- Whether the landlord is facing foreclosure
- Whether the tenant has any viable defenses and counterclaims against the landlord
Escrowing of rent is most common in a case where a tenant has requested a jury trial; a matter which will inevitably delay the resolution of such a case.
The benefit of requiring the escrowing of rent, of course, is that the money is available at the resolution of the case. Moreover, as a practical matter, such orders often prompt both landlords and tenants to resolve these cases sooner than later.
If you need assistance with a landlord-tenant matter, contact me for a consultation.