Can Massachusetts Landlords Legally Require That Tenants Buy Renter’s Insurance?

by Rich Vetstein on March 15, 2012 · 5 comments

in Disclosures, Insurance, Landlord Tenant Law, Leasing, Massachusetts Real Estate Law, Rental Housing, Safety

Renter’s Insurance Policy Raises Questions

I’ve recently become aware that some Massachusetts landlords are requiring that tenants procure their own policy of renter’s insurance as a condition of leasing. In fact, MSN Real Estate did a nice write up about the practice here. But I am also hearing about a dark side to this practice where some landlords have a kickback arrangement with the insurance provider where the landlord receives compensation for any policy taken out by a tenant.

Renter’s insurance is almost always a good idea, but under Massachusetts law, can a landlord require that a tenant get a policy (if the tenant doesn’t want one) and must it disclose a referral relationship with the insurance provider?

Landlords Should Be Careful About Renter’s Insurance Requirement

In light of recent court decisions, landlords should re-examine the legality of a mandatory renter’s insurance policy requirement.  In the recent Hermida v. Archstone class action ruling, which considered amenity fees under the Massachusetts security deposit statute, the court held that landlords can only charge first and last month’s rent, a security deposit, and a lost key fee at the beginning of a tenancy, and no other types of fees. Any other type of fee or financial obligation required to be paid by the tenant at the beginning of the lease could be deemed illegal under the Mass. Security Deposit law, Mass. Gen. Laws ch. 186, sec. 15B. Accordingly, landlord must be very careful about what and how much they charge tenants at the inception of leases, over and above the standard rent deposits and new key fee. At the very least, renter’s insurance should be optional, and any affiliate or kickback arrangement should be fully disclosed to the tenant. This still may not prevent a landlord from getting sued over a mandatory renter’s insurance requirement.

Renter’s Insurance Still Smart Choice

That said, I always recommend that tenants get their own renter’s insurance policy. It’s fairly inexpensive and provides protection to your personal belongings. Massachusetts law does provide for a minimum of $750 per unit for tenant relocation assistance due to fire displacement. However, that is not nearly enough for the average renter.

Has your landlord required that you purchase renter’s insurance? Have they disclosed any referral relationship? I’d like to hear from you. The practice may well be illegal.

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Richard D. Vetstein, Esq. is an experienced Massachusetts Real Estate Landlord Attorney. For further information you can contact him at info@vetsteinlawgroup.com.

  • Diana Mancera

    I recently signed an agreement for an apartment in the back bay and the landlord said “It’s The said amount you are to pay for the insurance of your stay in the apartment will be $2,000.00 and after your stay in the apartment/building there isn’t any damage, the said fee will be refund to you in full plus all interest accrued..

    You are also meant to pay $19.20 for the Tenancy Identification.

    The above fees amounted to the following $2,019.20 is meant to be paid before your Tenancy ID can gets to you in proof of your capability of being a tenant in the Building. Get back to me for the Insurance representatives bank account for the payment.mandatory that you purchase from the building management, Due some bad experience in the building few months ago, That was when they said the insurance must be purchase from the building management. Please I do hope you understand and you’ll get your refund back at the end of your stay with interest accrued.” He proceeded by stating the following

  • shellee67

    My landlord has just sent my annual lease renewal stating that they will not renew if you do not purchase $100,000 in renters liability insurance with the landlord listed as interested party on the policy, isn’t this illegal? I have lived here 14 yrs with a yearly lease

  • Pingback: Renters Insurance Massachusetts | Home Insurance()

  • Interesting question. I have been a landlord for about 10
    years. I often wanted to demand that my
    tenants purchase renters insurance but didn’t think it was good business
    practice until one day one of my apartment buildings had a fire and all tenants
    were displaced. I can see how it would violate the law if the landlord initially
    took funds for that purpose but if the
    tenant provided proof of insurance prior to tenancy or shortly after and the
    landlord did not take any additional funds then I do not see how a landlord could
    be in violation.

    Can a landlord have a clause in the
    lease stating that at the tenants sole cost, they will have to maintain a valid
    and open renters policy for the duration of the rental agreement, if not then the tenant will be inviolation of the lease? Also, after the tenant moves in can the
    landlord pay for the policy upfront and the renter repay that amount back to the lander
    in future rent?

  • Can a landlord require a tenant to pay $200 a month for a meal program ?  Very simple question can anyone answer?

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