~ Frequently
Asked Questions ~
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.
