This document provides an overview of Massachusetts landlord-tenant law and guidelines for residential rental properties. It discusses license requirements, written fee disclosures, exclusive and non-exclusive rental listings, the leasing process including tenant screening and environmental issues, lease types and provisions, deposits, terminating tenancies, landlord and tenant wrongful acts, vacation rentals, and additional resources. The goal is to help real estate professionals and landlords practice safely and avoid legal issues when renting residential properties.
3. Residential Rentals
• Disclaimer:
This presentation is based upon Massachusetts law
and the best information available through the Real Estate Licensing
board and the local Boards of Realtors and the Rental Housing Agency.
This presentation does not constitute legal advise and is no substitute
for individual legal advise by a competent attorney who is familiar with
the landlord/tenant laws of your state and the specific details of your
situation. All Brokerages specifically recommend that its clients seek
out legal counsel prior to entering any contractual agreement in this
area.
4. Introduction
• Providing Rental Representation for
Clients
• Practicing Rentals within the scope
of the Law – Legal Compliance
• CYA
5. Residential Rentals
• Mandatory Consumer-Licensee disclosure
a. Not required by law in rental of property
b. You still have an agency relationship with the
landlord, tenant or both and need to
maintain your fiduciary awareness to them.
6. I. License Requirements:
A. License required.
•“No person shall engage in the business of finding dwelling
accommodations for prospective tenants for a fee unless such
person is a licensed broker or salesperson.”
B. Exception – a managing agent under contract
•“A managing agent (or employees of that agent) under contract
with the owner of the real estate in the regular course of their
employment is not required to be licensed.”
7. II. Written Fee Disclosure
A. First personal meeting to discuss all rental property.
B. Disclosure to include:
1. Whether the tenant will pay a fee for rental services
2. The amount of the fee
3. Manner and time of when the fee is due to be paid.
4. Is the fee payable regardless if tenancy is created.
5. Signature of broker/salesperson with license # & date
6. Signature of prospective tenant or refusal to sign noted.
8. II. Written Fee
Disclosure(cont.)
C. This fee disclosure requirement applies to ALL
residential rentals.
D.The fee disclosure MUST be kept on file by the broker
for three (3) years and is subject to audit by the
licensing board.
***See the attached MAR Broker’s Rental Fee Disclosure
form
9. III. Rental Listings
A. Exclusive –
●
In writing
●
Include Addendum
**Standard Right to Lease Agreement-attached
**ERA Key– Sample Lease agreement Addendum-attached:
*This form clarifies what you are going to do for the
Landlord and contains a hold-harmless clause.
11. IV. Leasing Process
A. Screening tenants
•
Key word --- Consistency!
Have ALL applicants follow the same process.
• MAR - Prospective Tenant information form attached
1. Personal credit report – only with written
authorization. ($10.00 fee per adult - paid by tenant)
•
C.O.R.I. reports --- ???
12. IV. Leasing Process
A. Screening tenants – continued…
2. Fair Housing/rental concerns – refer to handout
3. Check tenants prior rental history – 2 landlords back!
4. Check employment history, salary, continued
employment…
-- general rule of thumb – 25% of income to go to rent
5. Landlord meets tenants personally.
-- I always try to check out where they currently live.
13. IV Leasing Process
B. Environmental
1. Lead Law
a. Tenant Lead Law Notification - attached
-- sign two copies, give one to the tenant
b. Tenant Certification Form - attached
-- sign 2 copies, give one to the tenant
c. Provide tenant with copies of the most recent
reports, if any.
14. B. Environmental
Lead Law – continued
d.Duty to De-lead or encapsulate.
e.Cannot refuse to rent to a tenant because they have
children under 6 years old
f.May have to pay for tenants temporary lodging during
de-leading.
g.Financial assistance ($1,500 tax credit per unit) on
Mass state income tax.
15. IV. Leasing process
C. Preparation/Delivery of the premises
1.Inspection by owner & agent. (take lots of pictures)
2.MAR Statement of Condition - attached
3.Abandoned property – return to tenant?
4.Board of Health inspection
-- a BOH sign off could act as a “violation free
baseline” if a tenant claims there are problems later.
16. IV. Leasing process
D. Safety & Habitability
1. Warranty of habitability (heat, water, fuel, etc…)
2. State Sanitary code
a. maximum # of occupants
b. extermination – maintain free of rodents, insects, etc…)
c. Kitchens – sink, stove/oven, facilities for a refrigerator
d. Heat -- including fuel unless a written agreement.
e. Water – must pay for unless separately and properly
metered
17. IV. Leasing Process
2. Sanitary Code – continued…
f. Hot water
g. Structural elements – weatherproof, watertight, rodent
proof…
h. Snow removal – all means of egress safe and operable.
i. Garbage and rubbish
j. Smoke & CO2 detectors must be present and maintained.
k. Locks – all entry doors (and windows) must be capable of
being reasonably secured against unlawful entry and
properly fitted with an operating locking device.
18. V. Leases
A. Written versus Oral
-- two reasons for written agreements
1. Oral agreement is only as good as the
memory and honesty of the parties
2. Take advantage of explicit provisions
-- sublet, occupants, key, access
-- sanitary code ( who pays for heat?)
-- pets, smoking, etc…
19. V. Leases
B. Requirements for a valid lease
1. Offer and acceptance
2. Consideration
3. Capacity to contract
4. Legal objective
20. V. Leases
C. Types of Leases (tenancies)
1. Fixed term tenancy
-- written lease
-- date lease ends
-- amount of rent
-- what the rent includes
-- typically 1 year, but can be any other term.
** Standard
Residential Lease
2. Self extending lease
- attached
21. V. Leases
3. Tenancy at Will
-- “month to month”
-- either party may terminate by given notice in advance at
least one rental period or 30 days, whichever is longer.
-- may be written or oral….writing provides much better
protection
*** MAR
Tenancy at Will Agreement
4. Subsidized Tenancy
- attached
22. V. Leases
D. Lease provisions
1. Quiet enjoyment
2. Water metering
3. Late payment penalties
4. Escalation clauses (taxes, heat, etc..)
5. Utilities
23. V. Leases
E. Lessor (Landlord) Access
1.
Limitations
2.
Who may enter
3.
Purpose of entry
4.
Timing (statutory 24 hours?)
5.
Key?
6.
“Reasonable Notice”
24. V. Leases
F. Unenforceable lease provisions
1.
Tenants waiver of rights
2.
Landlord exemption from law
3.
Limitations on children
4.
Landlord “hold harmless”
5.
Requirement of landlord “periodic access”
6.
Cannot waive habitability
7.
Landlord cannot transfer utilities without consent
8.
Lessor reprisals
25. VI. Deposits
A. Maximum allowable payments
1. First months rent
2. Last months rent
3. Security deposit
4. Lock/key deposit
B. Illegal deposits
1. Cleaning deposits, pet deposits, reverse penalties,
timing of late fees, etc…
26. VI. Deposits
C. Security Deposits
1.
Property of the tenant
2.
Separate account
3.
Written receipt required 30 days *MAR
4.
Written
5.
Interest payment required (5% or actual interest received) on
anniversary date.
receipt - attached
Statement of Condition
- attached
27. VI. Deposits
D. Last months rent
1. Written receipt required - attached
2. Required terms of written receipt
3. Interest required
4. Rate of interest
5. When interest is due
28. VII. Terminating tenancies
A. By agreement/fixed term lease
B. Terminating tenancies at will / 30 day or
rental period
C. Notices to Quit - attached
•
14 day notice to quit for non-payment
•
7 day notice to quit for other than non-payment
D. Retaliation/self help eviction
30. VIII. Wrongful acts of Landlord
A. Dangerous conditions
B. Failing to reimburse for authorized repairs
C. Failing to comply with housing codes
D. Demanding money for real estate taxes
E. Failure to make agreement clear and simple
F. Depriving access without court order
31. VIII. Wrongful acts of Landlord
(cont.)
• Imposing interest for less than 30 days late
• Failing to disclose late payment sanctions
• Interference with quiet enjoyment of
tenant
32. IX. Vacation Rentals (two types)
A. Rentals for 100 days or less for vacation or
recreational purposes generally exempt from many
of the laws regarding residential rentals
B. Rentals for 31 days or less for vacation or
recreational purposes are generally exempt from
lead paint law requirements so long as no chipping
or peeling lead paint exists in the dwelling unit and
the tenant has received the short term vacation
rental notification.
34. Taking the Rental Listing
• Exclusive Right to Lease
• Setting Expectations of Landlord
• Tenant Lead Notification form
• Where to market Rental Listings
• Offering of Compensation
• Following legal guidelines in ads
35. Working with Tenants
• Charging a fee for locating a rental for a
tenant
• Proper treatment of tenants – equal
opportunity
• Forms/documents to assure tenant
receives
36. Processing the Applications
• Completion of Applications
• Running Credit and Fees for doing so
• Calling of References
• Rejection or Acceptance of Applicants
• Documentation of Activities
• Security of Documentation
37. Processing the Applications
• Signing of the Lease
• Positive ID (license) at signing of lease
OR if tenant declined and requests
credit report
• Bank check for monies (if close to
tenancy) – to assure funds are secure
38. What your Landlord Needs to
Know
• Lease vs. Tenant at Will
• Collection of Up Front Monies
• Section 8 and Discrimination
• Proper accounting of Last Months rent
and Security Deposit
• Security Deposit Enforcement
39. Summary
• Rentals can be a good source of
additional income
• Rentals can be another source of
Liability
• Practice Carefully……
• Tenants some day become Buyers!
40. More Information
• Landlord Rights and Responsibilities
Tenants Rights and Responsibilities
• MAR Hotline (through your Manager)
41. More Information
• 1. Legal Tactics: Tenants’ Rights in Massachusetts by
Annette Duke (writing from a tenant’s perspective).
Published by the Mass Law Reform Institute
• 2. The Massachusetts Landlord Survival Guide, Seventh
Edition by Philip Lapatin and published by the Greater
Boston Real Estate Board
• 3. The Successful Landlord by Maribeth Perry
published by the Central MA Housing Alliance Inc.
• 4. Landlords' Rights and Duties in Massachusetts,
Joseph P. Diblasi
43. Landlord Organizations & Support
Massachusetts Rental Housing Association
•Worcester Property Owners Association
•Southern Worcester County Landlord Association
•MetroWest Property Owners Association
•Greater Lowell Landlords Association
•Eastern Middlesex Property Owners Association
•Lawrence Landlord Association
Great for Agents TOO!
Notas del editor
Using the correct form to list – do not use exclusive right to sell
Set expectations about what you are going to do – use Key Form with Landlord and as a checklist for yourself later.
Have Landlord complete Tenant Lead Notification so you have it on file to give to prospective tenants
Cannot discriminate against children unless 2 family/owner occ
Law provides must give prospective tenant lead notification and take application if desired. Landlord responsible for de-leading prior to tenant taking occupancy or getting interim compliance.
Be Clear about compensation with Landlord and on Listing Agreement
Marketing the rental Listing
In MLS
In Craigs List
Make sure not to use discriminatory language
Smoking vs. Section 8
Decide if you are going to choose to work with Tenants that call the office
Difference between servicing the tenant to find a place and showing them your rental unit
Showing your Listing
Provide Lead Paint Notice to prospective tenant
Provide application for each person over 18 who would be residing there
Do and say the same things to ALL tenants that you show your listing to
Showing Tenants Properties to locate housing
Provide “Tenants rights and responsibilities” pamphlet
Let them know about the possibility of Credit and References being pulled
Discuss fees for assistance (1/2 month rent, can waive if List agent offering, Credit run cost, etc)
Do not determine or suggest which areas a Tenant should or should not consider
One full application for each adult over 18 residing in property
You can collect fee for credit report running from tenant – just let them know up front
Make sure application is signed and Social Sec # is on there before sending to Suzanne for run – obtain copy license from applicant as well
Fax to Suzanne’s Key Vmail all applications w/copy of check for credit run and give admin the check (if you do not, you will be invoiced for the credit run)
Call References as agreed with Landlord (housing, personal and employment)
Document all reference input from calls for Landlord
Review Credit – get assistance if uncertain
After done with diligence above, present all applications at once to Landlord with pertinent information
Provide prospective tenant with response. If applicant declined due to credit, give tenant a copy of credit report.
Keep credit report in file – place in secure location (with admin) as opposed to in your personal possession – if you ever lost that info, you are subject to serious fines and penalties.
One full application for each adult over 18 residing in property
You can collect fee for credit report running from tenant – just let them know up front
Make sure application is signed and Social Sec # is on there before sending to Suzanne for run – obtain copy license from applicant as well
Fax to Suzanne’s Key Vmail all applications w/copy of check for credit run and give admin the check (if you do not, you will be invoiced for the credit run)
Call References as agreed with Landlord (housing, personal and employment)
Document all reference input from calls for Landlord
Review Credit – get assistance if uncertain
After done with diligence above, present all applications at once to Landlord with pertinent information
Provide prospective tenant with response. If applicant declined due to credit, give tenant a copy of credit report.
Keep credit report in file – place in secure location (with admin) as opposed to in your personal possession – if you ever lost that info, you are subject to serious fines and penalties.
Clarify up front whether Landlord wants a Lease (one year typical) or a Tenancy at Will.
Complete Lease or Tenancy at Will form using application and MLS listing form
Give draft of agreement to Tenant and Landlord for review prior to signing
Make sure the Landlord understands you cannot discriminate against anyone in the protected classes as well as indicating that the Landlord will not take Section 8
Review Landlords responsibilities for Last Months Rent and Security Deposit
- Last Months Rent – requirement to pay interest annually
- Security Deposit – up to one additional months rent
- must complete Apartment Condition Statement and obtain
all signatures
- Landlord must put in separate account and notify tenant of
location and account number within 30 days
- Landlord must pay interest on Security Deposit annually
- Landlord has 30 days to return Sec Deposit or notify Tenant of
retention plans (following the rules at that point)
Without all this – good possibility if went to court, landlord won’t keep security deposit