Tips for Moving Out of Your Apartment

As late spring comes upon us, so does the time of year when leases turnover.  People move for all sorts of reasons -- perhaps you are finishing school and leaving the area, you've gotten a new job or changed your family size.  Whatever the reason, you are packing up and changing addresses.

Here are some tips to avoid legal troubles after you move out of an apartment.

• You are generally required to leave the apartment in broom clean condition.  What that means is that you should leave the apartment in clean condition with no serious damage.  If there is damage, repair what you can.  If you cannot repair it, secure estimates for the cost of the work from a professional.  Make sure the apartment is empty.  Take out the trash, vacuum or wash the floors, clean the bathroom and defrost the refrigerator, empty it and leave it open.
• If you have an arrangement with the landlord or the new tenant to leave something, make sure you have it in writing, 
• Prepare a letter to the landlord that states the date and that the keys are enclosed,  If you have paid a security deposit, notify the landlord of an address where it should be sent. 
• Notify the landlord of your moving plans in writing and be clear.  You don't want the landlord to think you have left and clear out those last remaining items you had planned to come back for.
• Once you have moved everything out,  make a good record of the condition of the apartment. Have a friend who could testify in court come to your unit.  Bring a camera and take a complete set of photographs of the apartment.  Show the walls, the floors and the windows.  Take photos of the interior of the appliances.  Take photos of each room.  You can also take videos.  At least one colleague suggests having a newspaper with the date in each photo as confirmation that the photos could not have been taken earlier than the date of the newspaper.  
• Once you have finished with the photos, turn off all lights and leave the apartment. Immediately return the keys.  If your friend can accompany you, all the better.  Make sure you have that letter you prepared and deliver it to the office.  If you can, get a receipt for return of the keys from someone in the management office.  If you have to mail the keys, mail them in some sort of fashion that you can track the package.  If the landlord has instructed you to leave the keys, then take a photo of the keys.
• Keep a copy of all your correspondence with the landlord.

The return of a security deposit has specific rules.  If you do not get your security deposit back at all or feel that some of it was wrongfully withheld, give us a call and we can evaluate whether you have a claim against your landlord.

Security Deposits and Eviction

Yesterday, the Supreme Judicial Court handed down a ruling in the landlord tenant realm that every landlord and tenant needs to understand.  It ruled that a violation of the security deposit law not only can be a basis for counterclaim as to damages, but is a defense to a landlord's claim for possession.

What does this mean?  It means that if a landlord is attempting to evict a tenant and the tenant claims that the landlord failed to properly handle the security deposit, if the tenant wins on that claim, the tenant can defeat the landlord's claim to evict the tenant and the tenant gets to stay in the unit.

How will this play out in an eviction case?  Let's say the Landlord brings a summary process action to evict the tenant for non-payment of rent.  The tenant counterclaims on a number of claims, including that the landlord did not handle the security deposit properly.  Trial is held and the tenant succeeds in his claim that the security deposit was mishandled and is awarded damages.  The amount awarded for the mishandled security deposit is offset against the outstanding rent.  IF the tenant's damages exceed the landlord's damages, then the tenant keeps possession.  IF the landlord's damages exceed the tenant's damages, the tenant must be given seven days to pay the amount owed to the landlord and if the tenant pays, then the tenant keeps possession.  The same rules apply for a no fault eviction.

Before starting a summary process action, we always ask our landlord clients whether a security deposit was taken and if so, how it was handled.  Landlords must be vigilant in documenting, maintaining and handling security deposits and be prepared to return the deposit in the event that it was not handled properly to avoid tenants succeeding on these types of claims.

Tenants must keep track of the paperwork that they were provided upon move in, and should keep a copy of the check they wrote for the security deposit. If there is any question as to how the security deposit was handled, a security deposit counterclaim should be raised.  If a tenant is withholding rent due to conditions, it is more important than ever to escrow those funds, even though that is not required by law.  A tenant only has 7 days to pay the money into court, including weekends and holidays.  This time frame, ultimately, might be fairly short and the tenant should not have to scramble for the funds.

Amenity Use Fees - Hermida v. Archstone

A Massachusetts federal court recently came down with an important and interesting ruling regarding security deposits and fees that can be taken by a landlord prior to the commencement of a tenancy.  Under the Massachusetts SecurityDeposit Statute, landlords are restricted as to how much they can charge a new tenant for upfront fees, including first and last months’ rent, security deposit, and fees for changing locks; but what about fees for the use of community amenities such as pools and gyms?

According to the recent Massachusetts federal case of Hermida v. Archstone, Judge William Young upheld the strict interpretation of the Massachusetts Security Deposit Statute and held that “amenity use fees” collected prior to the commencement of a lease are illegal under the Statute.  In the Hermida case, the Hermidas were prospective tenants of Archstone Reading and were charged a one-time $475 amenity use fee prior to the start of their lease.  The Security Deposit Statute states that the landlord may not “require a tenant or prospective tenant to pay any amount in excess of” first and last months’ rent, a security deposit equal to the first month’s rent, and a fee for changing the locks.  The parties differed on the interpretation of that language.  The Hermidas contended that Archstone was prohibited from charging a fee that is not specifically enumerated under the Statute; however Archstone argued that the statutory language lists “calculable components which, summed all together, result in total maximum amount a landlord can charge at the inception of the tenancy.”  The court took a strict interpretation of the statute and disagreed with Archstone.  The court interpreted the statutory language as “prohibiting the landlord from charging a prospective tenant any amount for any purpose other than those listed, and in excess of the amount of each provision.”  In short, the amenity use fee was not explicitly allowed by the Statute, and thus violated the Security Deposit Statute.

It is important to note that the Hermida case focused solely on fees that may be charged by a landlord prior to the commencement of the lease.  Judge Young explicitly noted that the court would not determine the validity of any fees charged during or after the tenancy at this juncture.

The Security Deposit Statute is designed to protect both sides of the landlord-tenant relationship, so landlords and tenants alike should take this opportunity to clarify their rights under the Statute.  Landlords should review the up-front fees they typically charge to comply with court’s recent hardline decision; and tenants should be sure they understand each fee that the landlord is charging at the commencement of the lease and how it fits into Security Deposit Statute.

We will be discussing this important issue as well as other significant issues surrounding the practice of being a landlord in Massachusetts during our upcoming free seminar.  Please join us:  Be A Smart Residential Landlord

The Today Show on Renting

This morning the Today Show had a segment on renting property.  You can watch the segment at this link: 
  http://video.today.msnbc.msn.com/today/46219482 .  Barbara Corcoran has a lot of good advice, however, I question whether one should pay 6 months of rent in advance. In Massachusetts, it is not even clear to me that a tenant could do such a thing, even if it was completely voluntary.  In any event, paying in advance poses risks for both the landlord and the tenant.  When the tenant, pays in advance, he or she loses her leverage to withhold rent or to even threaten to withhold rent if something serious does go wrong.  Second, a landlord is only entitled to collect rent on the due date for the month it is due.  Even if a tenant voluntarily pays, the tenant could change his or her story and say that the 6 month payment was compulsory.  For those reasons, I'd say its not worth it to consider advance payments.

Second, in Massachusetts, every landlord must provide a written statement of condition for the tenant to fill out.  The tenant absolutely needs to point out what is wrong with the apartment when they move in so it can be fixed and so he or she is not charged for it on the way out.  On the flip side, if the landlord does not obtain that signed, written statement of condition, they are going to have a very difficult time deducting the damage from any security deposit at the end of the tenancy. 

Speaking Event: Be A Smart Residential Landlord

For 2012, I'll be speaking about one topic or another relating to my practice areas.  The first one is scheduled for February 15, 2012 at my office and the subject is "Be a Smart Residential Landlord:  How to Make Money and Stay Out of Trouble."

I'll be speaking about the various statutes and regulations that come into play when you are a residential landlord, and what you need to do legally and practically to, as the name states, stay out of trouble and make some money. 

Please join me for this free event.  My office is small so space is limited.  Please click the link below to sign up on eventbrite.

http://tinyurl.com/7d5nt56

Security Deposits Revisited

I have written about security deposits previously, but a recent case I handled causes me to revisit the issue. The Massachusetts statute is quite clear – at the commencement of a lease, the landlord can take the following: first month's rent, last month's rent, a security deposit equal to not more than one month's rent and the purchase and installation cost for a key and lock. That's it. If you take anything more, you, as the landlord are in violation of the statute. In addition, it does not matter what you call the security deposit. I recently had a landlord's attorney try and tell me that the money given to her for a “cleaning deposit” was not a security deposit and therefore did not need to be deposited pursuant to statutory regulations. That cleaning deposit was a security deposit; so is a pet deposit. In this case the landlord took only a $150.00 security deposit; however she had mishandled it and had the matter not been resolved, then my client would have been entitled to $450.00 plus his attorneys fees if it had not been returned on demand.

Seven Things to Know About the Security Deposit Law

I receive a lot of calls from clients with questions about security deposits that their landlord has taken. The security deposit law in Massachusetts is not overly complex, it just requires precision. Here are some things that both landlords and tenants should know about the rules regarding security deposits on residential properties.

1. A landlord may not take more than one month's rent as a security deposit. For example, if the tenant's rent is $1,000 per month, the landlord may not ask the tenant for the $1,000 and then an additional security deposit, for example, the keeping of a pet. If the tenant has a pet and the landlord wants to take extra security because of the pet, then landlord needs to either raise the rent, prohibit pets or take the risk that the $1,000 is enough.
2. When a landlord takes a security deposit, he or she must give the tenant a receipt for the security deposit.
3. The landlord must deposit the security deposit in an account which is beyond the reach of the landlord's creditors within the Commonwealth of Massachusetts. The Landlord must provide the tenant with a receipt showing the bank, the account number, the amount and date of deposit of your funds.
4. If the Landlord does not handle this procedure properly (i.e., the depositing and providing a receipt), the tenant is entitled to its return on demand. The failure to do so will subject the landlord to paying three times the security deposit plus the tenant's reasonable attorneys fees. It does not matter that the landlord did not mishandle the security deposit on purpose.
   
5. The Landlord must also provide the tenant with a Statement of Condition. It is very important that the tenant list all problems with the apartment. If it is not listed, the tenant can be held responsible for that damage at the end of the lease.
   
6. If a tenant stays in the apartment more than 12 months, on the 13th month, the tenant is entitled to receive the interest that the security deposit has earned over the past year. In the alternative, a landlord can instruct the tenant to deduct the interest from the 13th month rent check.
7. The landlord must return the security deposit within 30 days after the end of the tenancy. If the landlord wishes to deduct anything from the security deposit, he or she must provide the tenant with receipts or estimates for the cost of the repair and sign an accounting under the pains and penalties of perjury. The failure to follow this procedure exactly entitles tenants to multiple damages, plus attorneys fees.

The good part for the tenant is that if the landlord does not follow the rules, the tenant can hire a lawyer and recover the attorneys fees.

As for landlords, if the procedure is followed correctly, a security deposit can be a valuable tool to retain funds for a tenant who does not take care of the rental unit. However, if you are a landlord and you have not maintained a security deposit according to the statute, be prepared to return it upon demand. The failure to return the security deposit on demand if it has been mishandled will only result in the payment of three times the security deposit and your tenant's legal fees. Before you take a security deposit, consult the law and/or a lawyer. It is very important that this is done correctly.