Largest Lead Paint Penalty On Record for Attorney General Coakley
Landlords with lead paint beware…enforcement of the state’s strict Lead Paint Law remains a priority for Attorney General Coakley’s office. The AG just hit a Boston area property owner with the largest fine on record — $75,000 — and ordered him to de-lead his rental units, resolving allegations that he engaged in a pattern of unlawful and retaliatory practices against tenants with young children in order to avoid his obligation to comply with state lead paint laws. The AG’s press release can be read here.
The offending landlord is Keith L. Miller, of Newton, who at the time owned and managed at least 24 residential rental units in Chelsea, Newton, Arlington, and Brighton. This is the largest fair housing settlement with a landlord that has been reached under AG Coakley.
The Massachusetts Lead Paint Law, one of the strictest in the U.S., imposes a mandatory obligation to de-lead if there is a child under 6 residing in the rental premises. A property owner or real estate agent cannot get around the law simply by refusing to rent to families with young children. They also cannot refuse to renew the lease of a pregnant woman or a family with young children just because a property may contain lead hazards. And property owners cannot refuse to rent simply because they do not want to spend the money to de-lead the property. Any of these acts is a violation of the Lead Law, the Consumer Protection Act, and various Massachusetts anti-discrimination statutes that can have serious penalties for a property owner or real estate agent.
School is back and summer is over. September 1 and the start of the new rental cycle is right around the corner. It’s time to review my best practices to get trouble-free, paying tenants in your Massachusetts rental property.
Screening Prospective Massachusetts Renters: What You Can and Cannot Ask
Landlords canlegally ask prospective renters about the following:
income and current employment
prior landlord references
credit history
criminal history
Your rental application should include a full release of all credit history and CORI (Criminal Offender Registry Information). Use CORI information with caution, however, and offer the tenant an opportunity to explain any issues. Landlords should also check the Sex Offender Registry as they can be held liable for renting to a known offender. Use the rental application and other forms from the Greater Boston Real Estate Board.
Landlords cannotask about the following:
race, color, national origin, ancestry, or gender
sexual orientation
age
marital status
religion
military/veteran status
disability, receipt of public assistance
children.
If you deny a renter’s application, it should be based on financial reasons, such as questionable credit, income or rental history. Stay away from reasons related to children, public assistance and the like. Be aware that this time of year the Massachusetts Commission Against Discrimination and Attorney General’s Office send out dummy rental applicants in an attempt to catch unwary landlords who deny housing for discriminatory reasons.
Students, especially undergraduates, often create problems for landlords. It’s important to meet with students personally before signing the lease and firmly explain a “no tolerance” policy against excessive noise, parties and misbehavior. Remember, under a two year old Boston zoning ordinance, no more than four (4) full time undergraduate students may live together in a single apartment.
Careful screening of tenants is far less expensive than the cost of evicting a problem tenant.
My Property Has Lead Paint. Can I Refuse To Rent to Tenants With Small Kids?
Under the Massachusetts Lead Paint Law, whenever a child under six years of age comes to live in a rental property, the property owner has a responsibility to discover whether there is any lead paint on the property and to de-lead to protect the young children living there. A property owner or real estate agent cannot get around the legal requirements to disclose information about known lead hazards simply by refusing to rent to families with young children. They also cannot refuse to renew the lease of a pregnant woman or a family with young children just because a property may contain lead hazards. Landlords cannot refuse to rent simply because they do not want to spend the money to de-lead the property. Any of these acts is a violation of the Lead Law, the Consumer Protection Act, and various Massachusetts anti-discrimination statutes that can have serious penalties for a property owner or real estate agent.
For more information about Massachusetts rental screening, landlord-tenant law and evictions, please read these articles or contact me below. I would be happy to help you get good tenants.
The Massachusetts Purchase and Sale Agreement Is Anything But “Standard”
Home buyers sign a never ending pile of legal documents to purchase a home. But arguably the most important document in the entire transaction is the Massachusetts purchase and sale agreement. The purchase and sale agreement is signed after the Offer to Purchase is executed, and spells out the parties’ responsibilities during the interim period when the property is taken off the market and the closing.
In Massachusetts, the form most often used is the so-called standard form agreement supplied by the Greater Boston Real Estate Board or one modeled very closely to this form. (Due to copyright laws, we cannot embed the standard form agreement — contact my office if you need assistance with drafting a purchase and sale agreement). The “standard” form purchase and sale agreement is, however, far from standard, especially for buyers. In fact, the standard form is very much slanted in favor of the seller, and the playing field must be “leveled” to protect the buyer’s interests.
This is why it’s imperative that home buyers and sellers alike retain a Massachusetts real estate attorney to modify the “standard” form purchase and sale agreement in order to best protect all parties’ rights and remedies, and customize the agreement to the particular aspects of the transaction. This is typically done through a “rider” to the purchase and sales agreement. Often, the buyers’ attorney and the sellers’ attorney will attached two different riders to the agreement.
I’ll outline a few common issues not addressed adequately in the “standard” purchase and sale agreement. (Most of these are from the buyer’s perspective).
Mortgage Contingency
The “standard” purchase and sale agreement does provide a basic mortgage contingency which gives the buyer the option of terminating the agreement if mortgage financing falls through. However, for a buyer, the more specific you are in terms of interest rate, points, name of lending institution and definition of “diligent efforts,” the better. Buyers’ counsel should specify that the buyer will not be required to apply to more than one institutional lender currently making mortgage loans of the type sought by the buyer and that the buyer may terminate the purchase and sale agreement unless the buyer obtains a firm, written commitment for a mortgage loan. Here is a sample rider provision:
MODIFICATION TO PARAGRAPH 26: Application to one such bank or mortgage lender by such date shall constitute “diligent efforts.” If the written loan commitment contains terms and conditions that are beyond BUYER’S reasonable ability to control or achieve, or if the commitment requires BUYER to encumber property other than the subject property, BUYER may terminate this agreement, whereupon any payments made under this agreement shall be forthwith refunded and all other obligations of the parties hereto shall cease and this agreement shall be void without recourse to the parties hereto.
Home Inspection/Repairs
Typically, buyers complete the home inspection process prior to the signing of the purchase and sale agreement, and any inspection contingency provision is deleted from the purchase and sale agreement. What happens if the inspection results are not ready before the P&S signing deadline or if the seller has agreed to perform repairs prior to the closing or give a credit at closing? In this case, a home inspection contingency clause should be added back to the agreement, and any seller repairs or closing credits should be meticulously detailed in the rider.
Septic Systems/Title V
If the home is serviced by an on-site sewage disposal system otherwise known as a septic system, the Massachusetts Septic System Regulations known as Title V requires the inspection of the system within 2 years of the sale of the home. Failed septic systems can cost many thousands of dollars to repair or replace. Thus, buyers would look to be released from the agreement if the septic system fails inspection. Alternatively, buyers could be given the option to close if the seller can repair the septic system during an agreed upon time period, provided that the buyers do not lose their mortgage rate lock.
Radon Gas
Radon is a naturally occurring radioactive gas. The ground produces the gas through the normal decay of uranium and radium. As it decays, radon produces new radioactive elements called radon daughters or decay products which scientists have proven to cause lung cancer. Radon testing should be performed by buyers during the home inspection process. Elevated levels of radon (above 4.0 picoCuries per liter (pCi/l) can be treated through radon remediation systems. The purchase and sale agreement should provide for a radon testing contingency and the buyers’ ability to terminate the agreement if elevated radon levels are found, or the option of having the sellers pay for a radon remediation system.
Lead Paint
Under the Massachusetts Lead Paint Law, buyers of property are entitled to have the property inspected for the presence of lead paint. (Sellers are not required to remove lead paint in a sale situation). Because the abatement of lead paint can be costly, buyers typically look for a right to terminate the purchase and sale agreement if lead paint exists and the abatement/removal of it exceeds a certain dollar threshold. Here is an example of a provision added to the standard form:
LEAD PAINT. Seller acknowledges that the Buyers have a child under six (6) years of age who will live in the premises. In accordance with Massachusetts General Laws, Chapter 111, section 197A, as the premises was constructed prior to 1978, Buyer may have the premises inspected for the presence of lead paint which inspection shall be completed within ten (10) days after the execution of this Agreement, unless extended in writing by the parties. If the inspection reveals the presence of lead paint, the abatement and/or removal of which will cost $2,000 or more, then Buyer may terminate this agreement, whereupon any payments made under this agreement shall be forthwith refunded and all other obligations of the parties hereto shall cease and this agreement shall be void without recourse to the parties hereto. Any lead paint removal or abatement shall be Buyers’ responsibility.
Access
When my wife and I signed the Offer to Purchase on our house, she couldn’t wait to get in there with her tape measure, paint chips and fabric swatches. Oftentimes overlooked, but a cause of friction is buyers’ ability to access the house prior to the closing. To avoid such friction, an access clause should be added to the purchase and sale agreement giving the buyer reasonable access at reasonable time with advance notice to the sellers–it’s still their house after all.
These are just a few of the issues not adequately addressed by the “standard” form purchase and sale agreement. There are many more.
_________________________________________ Richard D. Vetstein, Esq. is a nationally recognized real estate attorney, and has handled thousands of Massachusetts real estate transactions. He can be reached via email at [email protected].
With the impending influx of renters and students invading the Greater Boston area soon, let’s review some often asked questions concerning Massachusetts landlord tenant law to assist landlords in navigating the rental process.
Screening Prospective Tenants: What You Can and Cannot Ask?
Landlords can legally ask about a tenant’s income, current employment, prior landlord references, credit history, and criminal history. Your rental application should include a full release of all credit history and CORI (Criminal Offender Registry Information). Use CORI information with a great deal of caution, however, and offer the tenant an opportunity to explain any issues. Landlords should also check the Sex Offender Registry as they can be held liable for renting to a known offender. Use the rental application and other forms from the Greater Boston Real Estate Board.
Under Massachusetts discrimination laws, a landlord cannot refuse to rent to a tenant on the basis of the tenant’s race, color, national origin, ancestry, gender, sexual orientation, age, marital status, religion, military/veteran status, disability, receipt of public assistance, and children. It’s best to stay away from asking about these topics.
Students, especially undergraduates, often create problems for landlords. Meet with students personally before signing the lease and firmly explain a “no tolerance” policy against excessive noise, parties and misbehavior.
Careful screening of tenants is far less expensive than the cost of evicting a problem tenant.
Security And Last Month’s Rent Deposits: Should I Take One?
I advise landlords not to take security deposits because any misstep, however innocent, under the complex Massachusetts security deposit law can subject the landlord to far greater liability than the deposit. Among other requirements, the security deposit law provides:
a landlord must give the tenant a written receipt with information as to where the deposit is being held;
a landlord must hold a security deposit in a separate interest bearing account, and pay interest to the tenant yearly;
at the beginning of the tenancy, a landlord must provide the tenant with a written “statement of condition” of the rental unit detailing its condition and any damage;
the tenant may note any damage on the statement of condition
At the end of the tenancy, if the landlord desires to deduct repair costs from the security deposit, it must provide the tenant with written notification and copies of all estimates within 30 days of the tenant’s move-out.
Under the law, any slip-up on these requirements can subject the landlord to liability for 3 times the deposit plus the tenant’s attorneys’ fees. That’s why I advise my landlord clients that security deposits aren’t worth the money. If you need a deposit, take a last month’s deposit, the requirements of which can be found here in the Massachusetts last month’s deposit law.
Due to the high interest in security deposits, I wrote a full post on the topic. Click on Massachusetts Security Deposits to view the article.
My Property Has Lead Paint, What Do I Do?
Under the Massachusetts Lead Paint Law, landlords (and real estate agents) must disclose to tenants the presence of known lead paint for property built before 1978. The property must be de-leaded if a child under 6 will live there. That means if a young couple moves into a unit, then has a baby, the landlord must de-lead the property. There is no way around de-leading other than risking a discrimination claim for not renting to families with small children which is illegal. (Of course, many landlords unlawfully reject families with children). Exposing children to lead paint puts a landlord at huge legal risk. Financial aid and tax credits for de-leading are available to qualified property owners. For all Massachusetts rental property built before 1978, landlords must provide all tenants regardless of family composition with a Massachusetts Tenant Notification and Certification form, and all lead inspection reports and testing information, if available.
Can I Take A Finder’s Fee?
Only a licensed real estate broker can lawfully collect a finder’s fee for bringing together a landlord and a tenant. Landlords who don’t work with brokers cannot charge a finder’s fee.
Richard D. Vetstein, Esq. is regarded as one of the leading real estate attorneys in Massachusetts. With 25 years in practice, he was voted a "Super Lawyer," a "Top Lawyer" by Boston Magazine and "Best of Metrowest." For Rich's professional biography, click here. If you are interested in hiring Rich or have a legal question, email or call him at [email protected] or 508-620-5352.
Largest Lead Paint Penalty On Record for Attorney General Coakley
School is back and summer is over. September 1 and the start of the new rental cycle is right around the corner. It’s time to review my best practices to get trouble-free, paying tenants in your Massachusetts rental property.
