This course is specifically designed for those real estate brokers and salespersons engaged in the practice of rental brokerage. With limited exceptions, the rental of real estate requires any individual/s showing a real property and assisting in a rental be licensed. Although Mandatory Consumer-Licensee Relationship Disclosure is not a requisite in the rental of a property, brokers and salespersons are usually "agents" and need to maintain heightened awareness of the fiduciary duties to a landlord, tenant or both. However, real estate licensees engaged in rentals are required to employ the written fee disclosure. A significant percentage of complaints received by the Division of Professional Licensure relate to residential rental transactions. As licensees, rental agents must maintain professional competency and understanding of the inherent legal obligations. Equally as important agents should have a thorough understanding of the "public accommodations" under the Fair Housing Laws as well as a comprehensive awareness of Massachusetts 's consumer protection regulations.
I. License requirements
A. License required (M.G.L. c. 112, § 87 DDD ½)
1. "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. Management agent under contract exception to licensing requirement (M.G.L. c. 112, § 87 QQ)
1. "A managing agent while acting under a contract with the owner of the real estate or the regular employees of such agent acting in his behalf in the regular course of their employment" is not required to be licensed.
II. fee disclosure requirement: Written disclosure to the prospective tenant
A. First personal meeting to discuss all rental property
B. Disclosure to include:
1. Whether the prospective tenant will pay a fee for rental services
2. The amount of the fee
3. Manner and time when the fee is due to be paid
4. Whether or not the fee will be payable regardless if a tenancy is not created
5. Signature of the broker or salesperson including license number and date of notice
6. Signature of the prospective tenant, or notation of refusal to sign
C. The fee disclosure requirement applies to all residential rentals.
D. The fee disclosure must be kept on file by the broker for three years and subject to audit by the Board.
III. Listings for residential leasing
A. Exclusive (advisedly in writing)
B. Open, non-exclusive (advisedly in writing but often unwritten)
IV. Leasing process
A. Screening tenants / application process / inception
1. Fair housing/rental concerns
2. Section 8
3. Lead paint and children
4. Lead paint tenant notification, landlord's rights and responsibilities and 30-day delay to de-lead.
5. Personal credit report only with written authorization.
B. Environmental
1. Lead paint
a. Inspection
b. Disclosure/tenant notification certification
c. Duty to de-lead or encapsulate
d. Financial assistance to landlords
C. Preparation/Delivery of Premises
1. Inspection of premises by owner or agent
a. Condition
b. Abandoned property - Landlord required to make reasonable effort to return the property.
c. Hold-over tenants
d. Board of Health Inspection/Building Department/Appropriate Municipal Authority.
D. Warranties, Safety and Habitability
1. Warranty of habitability (e.g., heat, water, fuel, etc.)
2. State Sanitary Code (105 CMR 410)
a. Sole determinant as to maximum number of occupants
3. Municipal ordinances
4. Safety and security Issues
5. Use and enjoyment
V. Leases
A. Written vs. oral
B. Requirements of a valid lease contract
1. Offer and acceptance
2. Consideration
3. Capacity to contract
4. Legal objective
C. Term lengths
1. Estate for Years vs. Periodic Tenancy (a/k/a at will)
2. More than one year - Statute of Frauds
3. Seven years or more - Statute of Frauds
4. Ninety-nine year leases
D. Lease provisions
1. Quiet enjoyment
2. Water metering (M.G.L. c. 186, § 22)
3. Late payment penalties
4. Escalation clauses (e.g., taxes, heat, etc.)
5. Utilities
E. Lessor access
1. Limitations
2. Who may enter?
3. Purpose of entry
4. Timing (no statutory rule tenant be given 24-hour notice)
5. "Reasonable Notice" (M.G.L. c. 186, §15B)
F. Rent withholding • repair and deduct
G. Unenforceable lease provisions
1. Tenant's waiver of rights
2. Landlord exemption from law
3. Limitation on children
4. Landlord hold harmless
5. Requirement of landlord periodic access
6. Cannot waive habitability
7. Cannot waive necessity of basic services
8. Landlord not transfer utilities without consent
H. Lessor reprisals (M.G.L. c. 186, § 18)
VI. Deposits
A. Maximum allowed payments at the inception of the leas (M.G.L. c. 186, §15B (1) (b))
1. First month's rent
2. Last month's rent
3. Security deposit
4. Lock/key deposit
B. Illegal deposits, e.g., cleaning deposit, pet deposit, reverse penalties, timing of late fees, etc.
C. Deposit for modifications for disabled
D. Transfer of deposits
1. Upon sale of property
2. Upon termination of tenancy
E. Security deposits
1. Property of tenant
2. Separate account
3. Written receipt required
a. Some of the required terms of written receipt
I. Provide receipt within 30 days of taking security deposit
II. Identify the Massachusetts bank where deposit is held
III. Identify bank address, account number and amount of deposit
4. Written statement of condition
5. Available record of security deposit activity
6. Interest required
a. Rate of interest
b. When interest is due to tenant
7. Procedure and timetable for return of security deposit and accounting
8. Landlord's forfeiture to retain security deposit
9. Application of security deposit funds
a. Unpaid rent
b. Real estate taxes
c. Cost of repairs
F. Last month's rent
1. Written receipt required
a. Required terms of written receipt
2. Interest required
a. Rate of interest
b. When interest is due to tenant
VII. Terminating Tenancies, Eviction and Summary Process
A. Estate at sufferance - actual versus constructive eviction
B. Termination by agreement / fixed term lease
C. Terminating tenancies at will / 30-day or rental period
D. Notices to quit
1. 14-day notice to quit for non-payment
2. 7-day notice to quit for other than non-payment
E. Retaliation / self-help eviction
F. Summary process
G. Storing property / abandoned property (M.G.L. c. 271 of the Acts of 2004)
H. No lockout without court order
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
G. Imposing interest for less than 30 days
H. Failing to disclose late payment sanctions
I. Interference with quiet enjoyment of tenant
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 (M.G.L. c. 186, § 15B)
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.
X. Consumer Protection Statute
A. Violations of M.G.L. c. 93A and 940 CMR § 3.17
B. Written rental agreements must be complete in simple, understandable language
C. A violation of MGL c. 186 is also considered a violation of MGL c. 93A
Authority
• M.G.L. c. 112, §§ 87PP-87DDD1/2
• 254 CMR §§ 2.00-7.00
• M.G.L. c. 186, § 1-21 (residential rental)
• M.G.L. c. 111, §§ 189A-199B (lead)
• 105 CMR 410 (state sanitary code)
Important Cases for Discussion
• Boston Housing Authority v. Hemingway 363 Mass 184 (1973)
• Berman & Sons, Inc. v. Jefferson 379 Mass 196 (1979)
• Attorney General v. Brown 400 Mass 826 (1987)
• Gnerre v. Massachusetts Commission Against Discrimination 402 Mass 502 (1988)
• Attorney General v. Dime Savings Bank of New York, 413 Mass 284 (1992)
• Cruz Management Company, Inc. v. Thomas 417 Mass 782 (1994)
Suggested Handouts
• Landlord Rights and Responsibilities Massachusetts Association of REALTORS® and Massachusetts Office of Consumer Affairs and Business Regulations
• Tenant Rights and Responsibilities Massachusetts Association of REALTORS® and Massachusetts Office of Consumer Affairs and Business Regulations
Legal Tactics:
Tenants Rights in Massachusetts, 6 th Edition
Massachusetts Law Reform Institute