Q: My landlord has been promising for
months to make some necessary repairs in my apartment, but he never
seems to get around to them. I know tenants have the right to withhold
rent under some circumstances, but I'm not sure of the requirements or
the procedures I must follow. Is withholding allowed only for
violations of the state Sanitary Code? And if I do withhold my rent,
am I required to put it in an escrow account of some kind?
A: You can withhold rent because of
virtually any problem with your apartment; it doesn't have to be a
violation of the Sanitary Code, nor does the problem have to
constitute a health or safety threat, as was the case years ago,
before the state statute was amended. The only requirements today are:
1) Your landlord or agents of the landlord must have been aware of the
problem before you began withholding your rent: 2) You must not be
responsible for creating the problem or defect about which you are
complaining; and 3) It must be possible for the landlord to make the
necessary repairs while you remain in the apartment. If all of those
conditions are satisfied, your landlord can't evict you for nonpayment
of rent as long as the damages you claim equal or exceed the rent you
have withheld. Even if a court ultimately finds that you withheld too
much, you'll have a week from that decision to repay any amount you
owe your landlord before he can initiate eviction proceedings against
you.
As for your second question, there is no
escrow requirement for withheld rent. The Greater Boston Real Estate
Board has tried for several years to persuade the Legislature to adopt
legislation requiring tenants to pay withheld rent into an escrow
account managed by the court, and it will sponsor that measure again
this year, but state lawmakers, to date, have not approved it.
Q: I own a three family house and will
have a vacancy. Is there a maximum amount that a landlord can require
that a tenant pay when signing a lease? How much of that money must be
placed in escrow? What is the rule regarding having the tenant pay for
gas, electricity and fuel for heat?
A: The maximum that a residential
landlord can require the tenant to pay is the first month's rent, last
month's rent (up to the same amount as the first month's rent) and a
security deposit (equal to the first month's rent). In addi tion, a
landlord can require that a tenant pay the cost of purchasing and
installing a key and lock. If you collect a security deposit, it must
be held in escrow in a Massachusetts bank. A receipt must be given to
the tenant im mediately and within 30 days' notice must be given,
identifying the bank and account numbers. If the deposit is not held
in a Massachusetts bank, the landlord is subject to a claim for treble
the deposit. You must also provide the tenant with a statement of
condition within 10 days after the tenant takes occupancy, giving the
tenant 15 days to make changes, sign and return. Specific language
must be inclu~ed in the statement of condition. Where the security
deposit is held longer than 12 months, interest is due at the rate of
5 percent or the actual amount earned, whichever is less. The last
month's rent need not be held in escrow. If not held in escrow,
interest is owed at the. rate of 5 percent on the last month's rent.
If it is held in escrow and earns; less than 5 percent, the lesser
interest may be paid.
The state sanitary code states that a
tenant may be charged for gas, electricity and fuel for heat only if
the utilities are separately metered to the tenant's unit and that
there is a written agreement in which the tenant agrees to pay the
utility bills. Regulations of the Department of Public Health state
that the landlord must pay for water, but this regulation is being
challenged.
Q: I know I have seen discussions of
different aspects of the Security Deposit Law but I still have several
questions about these somewhat confusing rules:
-
Does the law allowing landlords to pay
the tenant interest of less than five percent on the security
deposit apply to the last month's rent payment as well?
-
What happens to the calculation of the
interest due if the tenant leaves before the lease expires?
-
How much time after a tenant leaves
does a landlord have to return the security deposit and/or to pay
any interest due on it and last month's rent?
-
What are considered legitimate
security deposit deductions?
-
What is a ''statement of condition,''
and how does it work?
-
Where can I find landlord-tenant rules
that are written in easy-to understand terms?
A: Landlords are required to pay
interest on both the last month's rent and the security deposit at a
rate of five percent annually or ''other such lesser amount of
interest as has been received from the bank where the deposit has been
held.'' That provision applies equally to the last month's rent and to
the security deposit. But unlike the security deposit, the last
month's rent payment does not have to be held in an escrow account,
segregated from the landlord's general funds.
Landlords accepting the last month's rent
in advance must pay interest on that amount, calculated from the first
day of the tenancy. The interest earned must be paid annually, within
30 days after the anniversary date of the tenancy or (at the end of
the rental term) within 30 days after the end of the tenancy. If the
tenant leaves before the anniversary date of the tenancy, the interest
accrued must be pro-rated and paid within 30 days after the tenancy
ends. If the landlord fails to pay the interest due within the
specified time periods, the tenant is entitled to receive damages
equal to triple the amount of interest, plus court costs and
attorneys' fees.
The security deposit interest calculation
is a little different. Interest must be paid only on a deposit held
for a year or more; if a tenant leaves before the end of the first
year of the tenancy, no interest will be owed. However, if the tenant
completes a one-year rental term and leaves three months into a new
term, the landlord would be required to pro-rate the interest for that
three-month period. As with the last month's rent, interest on the
security deposit must be paid annually, within 30 days after the
anniversary date of the tenancy. In both cases, landlords must either
send tenants a check for the interest owed or notify them that they
may deduct the amount from their next rental payment.
The security deposit (minus any legitimate
deductions), with all accrued interest, must be paid to the tenant
within 30 days following the end of the tenancy. Failure to meet that
deadline entitles the tenant, again, to treble damages plus court
costs and attorneys' fees. Landlords who receive a last month's rent
payment must give tenants a receipt indicating the date, the intent to
use the funds as the last month's rent, the landlord's name and (if
different), the name of the individual receiving the deposit the
landlord's name.
Landlords who receive a security deposit
must give tenants, in addition to a similar written receipt for the
funds, a detailed ''statement of condition,'' describing the
apartment's general condition and specifying any existing damage. The
purpose of this document is to prevent landlords from charging tenants
for pre-existing conditions, and prevent tenants from easily denying
responsibility for damages they have caused.
The process works like this: Landlords must
give tenants the statement of condition after receiving a security
deposit, or within 10 days after the tenancy begins. In addition to
detailing any existing damage, the statement must disclose any
certified violations of the state sanitary and building codes and any
damages the courts may have awarded based on those violations. Tenants
have 15 days after receiving the statement to sign it (indicating that
they accept it), or to submit their own signed condition statement. If
the tenant submits a separate statement, the landlord then has 15 days
to respond in writing, either agreeing or disagreeing with the
tenants' description of the conditions. Landlords will use the
statement of condition to justify any security deposit deductions they
claim at the end of the tenancy, and tenants, similarly, will use the
document to refute those claims. If landlords and tenants disagree
over any security deposit deductions the landlord claims at the end of
the tenancy, each party will use the statement of condition to
document their own position and refute the others'.
The Security Deposit statute lays out a
laundry list of documents landlords are required to maintain,
including:
Copies of statements of condition that have
been provided to tenants or prospective tenants; and
Records describing any damage done to any
apartments for which the landlord has accepted or returned a security
deposit or has sued a tenant. These records must indicate whether the
damages were repaired and note the cost of the repairs and the date on
which they were made.
The statute lists three purposes for which
security deposit deductions are allowed:
(1) any unpaid rent (excluding amounts
withheld legitimately under the rent withhold statute); (2) any unpaid
real estate tax increases due under a valid tax escalation clause; and
(3) any amount necessary to repair any damages for which the tenant is
responsible.
Finally, I can suggest two sources that do
an excellent job of explaining the Security Deposit Law and other
landlord-tenant mysteries:
''The Massachusetts Landlord Survival
Guide,'' produced by the Greater Boston Real Estate Board's Rental
Housing Association, and available for $29.95 by calling the RHA at
617-423-8700.
''The Successful Landlord,'' published by
the Central Massachusetts Housing Alliance Inc., and available for $29
by mail or $25 if you pick up a copy in person at the Alliance, 7-11
Bellevue St., Worcester. To order by mail write ''The Successful
Landlord,'' P.O. Box 1263, Framingham, MA 01701-1263.
Nena Groskind is former editor of Banker &
Tradesman, a Massachusetts real estate and banking journal. Send
inquiries to Realty Q&A, Boston Sunday Globe, Boston, MA 02107.
