Why Massachusetts Landlord-Tenant Legal Reform Is Needed Now

by Rich Vetstein on May 10, 2012 · 12 comments

in Landlord Tenant Law, Massachusetts Real Estate Law, Real Estate Litigation, Rental Housing

Why Would Anyone Want To Be A Landlord In Massachusetts?

I just settled a very troubling landlord-tenant case which demonstrates everything which is wrong and unfair with Massachusetts landlord-tenant and eviction law from the landlord perspective. This horror story is played out every Thursday in the summary process sessions of District and Housing Courts across the state. The laws which favor tenants so dramatically were passed decades ago in the 1970’s when tenements and slumlords still existed. Those days are long gone, but the outdated laws remain on the books, giving Massachusetts the well-deserved reputation of being one of the most unfriendly places to own investment property. The time has come to restore some semblance of legal balance between small property owners and tenants.

A Familiar Horror Story

The landlord is a 70 year old woman who rented out her family’s old farm house. The tenants lived there under a month-to-month tenancy at will agreement for 6 years without incident. The owner wanted to move back into the home for financial reasons, so she informed the tenants who immediately started threatening to call the board of health. Mind you, the owner had the right to ask the tenants to leave for any reason at all under a 30 day tenancy at will. The owner was forced to serve a 30 day notice to quit which resulted in the tenants’ immediate report to the local board of health and withholding of rent. The owners were cited for several minor code violations which they addressed promptly, but every time the health inspector came out, the tenant “reported” new alleged problems (likely caused intentionally by the tenants), and often did not allow the inspector to gain access. When the owner started an eviction action, and the tenants predictably shot back with a slew of counterclaims. Because the law is so favorable to the tenants, as I will discuss below, the owner was forced to pay the tenants money to get them to move out. Even though the owner felt she addressed all the issues promptly and competently, the existence of any code violation, however minor, rendered her case “dead on arrival” in Housing Court. To get rid of the headaches and potential liability, the landlord had to pay ransom money and waive the unpaid rent.

Unfortunately, this story is all too common in Massachusetts eviction courts, and something has to be done.

A Legal Minefield For Landlords

For landlords, navigating Massachusetts landlord-tenant law is like walking barefoot through a IED-filled field in Afghanistan. At some point, you’ll likely blow off a leg. Allow me to outline just a sampling of these laws and the penalties for landlords’ non-compliance:

  • Breach of implied warranty of habitability:  The first thing a savvy tenant will do after receiving an eviction notice is call the board of health to get the owner cited for code violations. Any violation, however minor, effectively enables the tenant to live rent-free during the case by withholding rent, and the owner will be compelled to make the necessary repairs while the eviction is pending. There have been many instances where tenants have intentionally inflicted property damage to claim code violations.  Other penalties:  reduction or elimination of rent owed; tenant cannot be evicted; triple damages; payment of tenant’s attorneys’ fees.
  • Breach of quiet enjoyment: This is another tenant favorite claim. It used to be for when slumlords would shut off utilities to tenants, but that rarely happens anymore. I’ve seen this used when tenants are “inconvenienced” by landlords’ repeated attempts to access the premises to make repairs. Penalties:  tenant gets to stay in possession; up to 3 months’ rent or actual damages, whichever is more; payment of tenant attorneys’ fees.
  • Retaliation:  Even if the landlord can evict a tenant at will for any reason, the landlord cannot “retaliate” against them if they make any complaints about property conditions. This is why tenants will immediately start squawking about property issues when faced with eviction, because the retaliation law will protect them even though they are not entitled to lifetime occupancy.  Penalties:  tenant gets possession; up to 3 month’s rent in damages; payment of tenants’ attorneys’ fees.
  • Security deposit/last month’s rent violations: Oh, where do I start on this one. As I’ve written about extensively here, Massachusetts landlords need a Master’s degree in Accounting to comply with the Security Deposit law and all of its procedural traps. From giving a special receipt and statement of condition, to putting the money in a special separate account, to paying interest every year, even one minor slip up will subject the landlord to mandatory triple damages and payment of tenants’ attorneys’ fees. This can torpedo an eviction case from the get-go.
  • Consumer Protection/Chapter 93A:  If all these minefields weren’t bad enough, at the end of the day, tenants are allowed to claim that any of the above warrants an award of triple damages and attorneys’ fees under the Mass. Consumer Protection Act.

Time for Meaningful Legal Reform

As I mentioned earlier, the vast majority of the laws protecting tenants were passed in the 1970’s when rental housing was far more problematic than it is now in 2012. Due to political pressure from tenant activists and liberal groups, lawmakers have been reluctant to level the playing field. Unfortunately, these draconian laws disproportionately hurt the small property owners who own 80% of the rental stock in Massachusetts. Laws which make investing and managing rental property hurt the economy and result in higher rents. There are several bills pending at the State House which will provide landlords with more incentive to own rental property in Massachusetts. The most sensible proposal is the much-awaited rent escrow law.

A.      Rent Escrow

Massachusetts is one of the minority of states which does not have some form of rent escrow law. The need for one is absolutely critical because without it landlords incur large losses when the tenant’s defensive claims of “bad conditions” turn out to be minor, nonexistent or, worse yet, the result of intentionally inflicted damage to the property by the tenant in order to live rent-free.

A mandatory rent escrow law would require any tenant who is claiming rent withholding to pay the withheld rent to a local court month by month until code violations are repaired. After repairs are done, either the landlord and tenant agree on how the escrowed rent should be divided, or a judge orders a fair settlement. In most cases, the owner will get back most of the withheld escrowed rent. But the most important impact of a mandatory rent escrow law is that those nonpaying tenants who do not escrow can be promptly evicted for nonpayment of rent. Although nonpayment evictions will still take about three months, and owners will lose about three months of rent, much-longer-delayed evictions and the free rent trick will be stopped.

B.      Security Deposit Reform

Presently, the security deposit law provides mandatory triple damages and payment of tenants’ attorneys’ fees for a violation however minor. The law should be reformed to provide a safe-harbor and discretionary penalties for when landlords make a good faith effort to comply but get caught up in the procedural mess, like for example if they put the deposit in a savings account instead of a special deposit account.

C.      Remove Automatic Possession For Tenants

Presently, the law is drafted so that if a tenant prevails on any number of claims for property conditions, etc., they most likely cannot be evicted. This is especially unfair in the tenancy at will context where the landlord does not need any reason to evict a tenant. The result is that tenants get free passes and occupancy for life as long as they can dig up a counterclaim or two. This needs to be changed.

What Property Owners Can Do: Lobby and Speak Out

The tenant community, backed by well-funded public interest legal services groups, have a strong lobby at the Legislature and love to portray these issues as a form of “class warfare.” In the end, however, everyone gets hurt, because if it’s more expensive to own rental property in Massachusetts, those costs will be passed on to tenants.

Property owners should support the lobbying efforts of the Massachusetts Rental Housing Association and their local chapter. The Small Property Owners Association has a good page on how to lobby your local elected officials. Here is a list of all pending rent escrow and landlord-tenant reform bills up at the State House. Senate Bill 779 is the major piece of legislation to bring up.

Visit your local legislator’s office during office hours and speak to them (or their aids) about your concerns on the issues. In many cases, they won’t know about the bills and you will have to educate them. Send letters and emails to your legislators identifying the bill numbers and explaining why you support or do not support these bills. Go to fund raisers for your Representatives and Senators. Let them know that you vote and that you want your vote to count!

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Richard D. Vetstein, Esq. is an experienced Massachusetts real estate and eviction attorney. For more information, please contact him at 508-620-5352 or info@vetsteinlawgroup.com.

  • Terry

    Massachusetts is horrible. I have a huge horror story I’m going through right now. I’m going to end up losing a full month of rent and security deposit because my tenant decided to invite someone into the house without my consent or knowledge for that matter. Ending up, the person who moved in illegally didn’t want to leave and even threatened to sue me for discrimination! The whole thing fell into my lap literally a month and a week after my tenant signed the agreement. Police, courts, and even lawyers said I couldn’t do anything about this squatter. The squatter ended up leaving and now my tenant refused to pay up until a new tenant that I chose was going to start living there…even though they broke the lease. What kind of ridiculous state is this? I contacted Governor Baker directly and spoke with his aide… haven’t heard back from him directly.

  • Paul Davidsung

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    • Ava Cueto

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  • Chris

    Great article, I’m totally in agreement that the system of laws currently in place to govern tenant land lord relationship is completely one sided to favor the tenant. It’s amazing to me that the law makers are that blind and unable to see these laws are prohibiting economic growth except for attorneys. Joel Feldman is an attorney who comes to mind, he extorts land lords through examples given in your article and claims he is fighting for the tenats. In reality, he is lining his pockets, it’s a shame that these lopsided laws allow attorneys and tenants to extort land lords. A change is deffinately needed on so many levels. Once this happens more economic growth will occur and less extortion on all levels.

  • nelly

    We need to y’all to you as we are having to “ransom” money to a professional tenant who is ruining our lives! We own one single family and only rented it out in an effort not to lose money in the collapsed housing market. This guy prayed on our good nature and continues to live the high life.

  • billerica

    my landlord served me a 30 vacate notice 2 wks. after calling broad of health because he would not stop pump gray matter water out under my sons bedroom, left my kids with no heat in the upstairs bedroom for 3 months. the list grew as the BOH came into the house. then he had me served again a few days later. still after I called the BOH and he received noticed. I just got told by a jury of my peers that I was in the wrong and what the landlord did was not retaliation nor any of the other stuff that goes with a ghetto landlord. I lived on this propety for 4 1/2 yrs. always paid rent, he evenrefused the rent after I called the BOH. so no this state is not in the favor of the tentant. I had all documents and creditable witnesses. this man has been allowed to get away with unsanitary methods for his property and was basically told “that a boy” nice way to protect the children in this state for ghetto slumlords.

  • Carrellon

    If you don’t think that slumlords still exist, you haven’t been to Springfield recently. The conditions in most rental units here are far below state housing code standards. I moved into my current place last July knowing there were violations but with promises from the landlord to fix them within a few weeks. When they weren’t fixed by December, I withheld rent in January and now I’m being faced with eviction. I’m a white college student in a graduate program and come from an affluent family. My parents retired in Las Vegas, and when they came to visit, they couldn’t believe the condition of the house. It is difficult to find a rental unit that is in good condition here because landlords here are slumlords. If you want a nice place, you need to move to Northampton or West Hartford. Most of the people here can’t afford those rents or the commute that comes with living so far away. I know my situation is very different than the one you are referring to, but be careful when you say that slumlords don’t exist in Massachusetts anymore. They are alive and well in Western Massachusetts, and I’m even sure you could find them in and around Boston if you looked.

  • newhomeowner

    Hello-
    Thank you for your blog.
    I just purchased a short-sale home in MA and the tenant there (tenant at will) is telling me that I am liable for the security deposit the previous owner took from him. No security deposit was conveyed to me at the closing. He is taking me to court b/c he claims I owe him the security deposit (not the previous owner who short saled the home)
    Is this true?

  • I3lu_99

    Just went through this. served a notice and tenant went to the board of health the next day. Now faced with losing my owner occupied home due to constant repair bills. Massachusetts sucks

  •  nice information we got from this blog about the relation between landlord-tenant .whatever tenant should do when  a tenant get lease in massachusetts

  • “I just settled a very troubling landlord-tenant case which demonstrates
    everything which is wrong and unfair with Massachusetts landlord-tenant
    and eviction law from the landlord perspective.”

    This is the right thing for the to do about  landlord-tenant legal reform. I really appreciate the information I read here. Thanks

  • Excellent blog post about a very sticky issue!

    To make progress on the issue and garner critical media attention, have your clients come out by name and be “the face” of the issue.  Tell their story by face and name or be defined by the opposition.

    Jack

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