Source: https://www.strangscott.com/tag/tenant/
Timestamp: 2019-04-20 09:03:32+00:00

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The Massachusetts Supreme Judicial Court (“SJC”) recently addressed the scope and interpretation of the Massachusetts Security Deposit Act, MGL c. 186, § 15B, in Phillips v. Equity Residential Management, LLC. Strang Scott previously discussed the implications of landlords’ failure to comply with MGL c. 186 (“the Act”).
The dispute centered around four different provisions of the Act.
First, Section 15B(4)(iii) requires landlords seeking to retain all or a portion of a security deposit to submit a written itemized list of damages to the rental unit, including precise detail of the nature of the damage and the necessary repairs and copies of estimates, bills, invoices, receipts, or other evidence to validate the amount deducted, sworn to by the landlord under the pains and penalties of perjury. Failure to comply with the requirements of Section 15B(4)(iii) forfeits the landlord’s right to deduct any amount from the security deposit for damage or repairs.
Second, Section 15B(6)(b) states that a landlord loses its right to retain any portion of the deposit for any reason, if the landlord fails to furnish the itemized list of damages in compliance with the requirements of the Act.
Third, Section 15B(6)(e) states that a landlord cannot retain any portion of the deposit for any reason if the landlord fails to return the deposit, or any balance after deductions, within 30 days after termination of the tenancy.
Finally, Section 15B(7) provides triple damages, interest, court costs, and attorneys’ fees to successful tenants where their landlord violated Section 15B(6)(a), (d), or (e).
The Federal District Court of Massachusetts awarded the tenant damages in the amount of his security deposit under Sections 15B(4)(iii) and 15B(6)(b), but denied an award of triple damages. On appeal, the First Circuit Court of Appeals submitted a certified question to the SJC, requesting clarification on the treble damages provision under Section 15B and whether a landlord’s violation of the itemized list requirement, which forfeits the landlord’s right to retain any portion of the deposit for any reason, also constitutes a violation of the Act.
The SJC answered “no” to the Circuit Court’s question. In its decision, the SJC ruled that the triple damages provision under Section 15B(7) does not apply to claims for violation of the itemized list requirement of Section 15B(4)(iii) or to forfeiture of the deposit under Section 15B(6)(b). The SJC did find, however, that improper deductions under the first sentence of Section 15B(4), or the failure to return a deposit or account for any portion within 30 days, would constitute violations entitling a tenant to an award of triple damages and attorneys’ fees.
If you have questions regarding whether your security deposit practices comply with Massachusetts law, contact experienced landlord counsel to evaluate your practices and to limit your exposure.
This entry was posted in News, Real Estate and tagged landlord, Massachusetts residential lease, Massachusetts Security Deposit Act, renters, residential lease, security deposits, tenant on October 26, 2017 by Strang Scott.
When Should Property Management Companies Contact An Attorney?
For most property management companies, picking up the phone to contact a lawyer is usually done with a sigh. If you are reaching out to an attorney, that often means that something has gone wrong and you need help in a difficult situation. So when should property management companies contact an attorney? The below topics are those most typically encountered by our property management clients. When these issues are addressed early with an attorney, a property management company will save substantial time, money and unnecessary aggravation.
Every property management company has some form of company structure (e.g. sole proprietorship, limited liability company or corporation). At the inception of a company, many owners simply ignore their structure while focusing on their expanding business. As the business grows, however, company owners need to look at their company structure and make sure it still makes sense. After all, internal disputes do not arise until there is real money at stake. When a dispute does occur, if the company structure is lacking, the ensuing litigation is going to become expensive very quickly. As such, company owners should ask themselves these three questions: (1) what happens if there is a falling out between the owners or someone passes away; (2) what happens if the company wants to expand; and (3) what happens when another company wants to purchase the existing company? Your company documents, such as your operating agreement, should contain the answers to these questions. If not, you should contact your attorney to make sure these items are addressed before they become an actual issue.
Running a successful property management company requires careful compliance with a lot of different local, state and federal law. Although there are many “standard” lease and property management agreements available on the Internet, the drafters of those agreements are usually not aware of the local nuances that may govern those documents. For example, unlike most states, it is illegal in Massachusetts to charge tenants certain upfront fees such as application fees and pet deposits. A standard lease from another state like New Hampshire may be unenforceable in Massachusetts. As such, it is important that you have a professional review your tenant lease documents. The same caution is applicable to property management agreements (i.e. agreements between you and your owner-client). Given the nature of their business, property managers are exposed to liability from several parties. Therefore, make sure you review your property management agreement with your lawyer and periodically update it as circumstances change.
Whether your company is a small operation or a Fortune 500 company, you will likely have employment issues at some point. Property management companies deal with unemployment claims, wrongful termination lawsuits and employee-misclassification. As mentioned in one of our recent articles, simply improperly classifying an employee as an “independent contractor” can be a costly mistake. If a suit is brought under the Massachusetts Wage Act, a company may be liable for triple damages, attorney fees and, in some cases, owners of the company may be personally liable. Unfortunately, many clients contact their attorney after one of these issues arise. To avoid unnecessary litigation, it is best to contact your attorney early to establish best practices for employment-related issues. When set up correctly, proper policies (e.g. employee handbooks, social media policies, etc.) and other preventative measures can minimize the exposure for employment claims.
The eviction process, particularly in Massachusetts, is very tenant-friendly. Nevertheless, acting early can greatly increase a property manager’s potential for recovery and reduce the amount of rent loss. The key to an expeditious eviction is ensuring that the eviction notice is sent as soon as possible. In Massachusetts, you generally need to send either a 14-day notice or a 30-day notice, depending on the situation. It is important to remember that the eviction process does not begin until the correct notice is sent. If you fail to send the right notice, your case may be dismissed and you will be forced to start the process from the beginning. The other important aspect of evictions is making sure you have good information about your tenant. Setting up a proper screening process is critical. Too often, we have clients who do not have key information about their tenants (e.g. social security number, employment information and references). Without these critical items, collecting from a delinquent tenant is next to impossible. You should contact your attorney if you are unsure whether your screening process is adequate, or want to confirm that you are following the proper procedures for starting an eviction.
Property management companies of all sizes have multiple trades and vendors at their disposal. In fact, many have multiple vendors for the same services so that they can remain competitive and ensure they are receiving the best service for the best price. Often, these vendors have either (1) their own contract; or (2) no contract at all. Under either circumstance, if a dispute arises, the property management company is at an immediate disadvantage. If the contract was drafted by the vendor, it likely is one-sided. If no contract exists, the parties will be stuck piecing together what they believe to be their agreement. Therefore, make sure you review each and every contract with your vendors to make sure your interests are protected. If you do not have a contract with a certain vendor, contact your property management lawyer to draft one for you.
This entry was posted in Real Estate and tagged attorney, boston property management attorney, boston property management lawyer, employment, Employment issues, eviction process, Evictions, independent contractor, lawyer, property management, property management companies, property manager, tenant, vendor, vendor dispute on July 7, 2015 by Cole Young.
As mentioned in one of our recent articles , the United States District Court for the District of Massachusetts ruled that Equity Residential Management violated MGL 186 § 15B when it collected application fees, amenity fees, community fees and pet fees. See Perry v. Equity Residential Management, LLC. In short, the Court ruled that landlords may only collect fees and/or deposits specifically listed under MGL 186 § 15B. Because that list does not include application fees, the Court ruled that it was illegal for Equity Residential Management to collect application fees.
In an apparent response to Perry v. Equity Residential Management, as well as other Massachusetts state court decisions on this issue, Massachusetts Senator Donald Humason recently sponsored Senate Bill 840, which would amend MGL 186 § 15B to allow landlords to collect an “application screening fee.” The proposed change to MGL 186 § 15B is similar to other states’ laws, like California. S.B. 840 provides that landlords may charge an “application screening fee” so long as the fee is not greater than the actual cost incurred by the landlord. That fee must not exceed $50 per applicant.
On May 12, 2015, the Massachusetts Legislature’s Joint Committee on the Judiciary will review the proposed Bill. Given that S.B. 840 would provide much needed relief and clarification for landlords, Strang Scott will continue to monitor its progress.
This entry was posted in Real Estate and tagged application fees, Boston, boston property management attorney, equity residential management, landlord, Massachusetts, move-in fees, perry, perry v. equity residential management, property management, tenant on May 11, 2015 by Cole Young.
It is common practice in the property management business for landlords to charge certain move-in fees, such as an application fee or pet fee, prior to a tenant moving in. This practice, however, is illegal in Massachusetts.
Late last year, in Perry v. Equity Residential Management, LLC, the United States District Court for the District of Massachusetts ruled that Equity Residential Management violated MGL 186 § 15B when it collected from tenants an application fee, amenity fee, community fee and initial pet fee. Under MGL 186 § 15B, a landlord is only allowed to collect, as up-front charges to a tenant, (1) first month’s rent; (2) last month’s rent; (3) a security deposit equal to the first month’s rent; and (4) the purchase and installation cost for a key and lock. While MGL 186 § 15B does not explicitly forbid application fees, move-in fees or pet fees, it does state that “no lessor may require a tenant or prospective tenant to pay any amount in excess of” the four permissible charges mentioned in the statute. Noting this restrictive language, and analyzing similar Massachusetts case law, the Federal District Judge in Perry ruled that the collection of these fees violates both MGL 186 § 15B and Massachusetts’s Consumer Protection Act (MGL 93a). A violation of MGL 93a exposes a defendant to triple damages and attorney fees. Thus, something as small as a $50 application fee could expose a landlord to thousands of dollars in damages.
Many property management companies and landlords throughout the country charge additional fees as a matter of course. It is doubtful that any of them think twice about the practice. After all, these additional fees help defray costs and sometimes add additional revenue for landlords. Even so, the collection of application fees, move-in fees and pet fees is impermissible in Massachusetts and given the recent decision in Perry v. Equity Residential Management, LLC, it is likely that this will become a much larger, and expensive, issue for landlords in the near future.
This entry was posted in Real Estate and tagged application fees, Boston, boston property management attorney, landlord, Massachusetts, move-in fees, pet deposit, property management, tenant on February 11, 2015 by Cole Young.

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