The Other Housing Crisis: Unaffordable Rent

We all know its expensive to live in this part of the country. The average rent in greater Boston has risen twice as fast as the national average.

The lack of affordable housing has continually challenged lawmakers and residents. Massachusetts has the 8th lowest home ownership rate of any state and the 7th lowest vacancy rate.  The median rent is the 10thhighest of any state.  One in three renters earning less than $64,081 annually pay more than half of their pre-tax income on housing related costs.

The demand for state and federal housing assistance programs far exceeds the supply of vacant rental units.  Applicants are challenged each month saving money for transportation, food, insurance, taxes, debt payments, clothing, household goods, long-term savings, and other expenses.

We need to re-zone and construct more affordable housing units in the Commonwealth.  Many public and private lending institutions recognize this need in our communities.

If you have considered investing in Massachusetts real estate, affordable housing is a win-win for all parties.  The taxpayer’s burden is lifted, investors make money, and lower income people receive adequate housing at anaffordable cost.

Jack O’Donohue, Real Estate Attorney at Dalton & Finegold, LLP
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Evictions

Massachusetts is notoriously a difficult jurisdiction for landlords. Why does everyone say that?

The answer is simple. Evictions can last forever and the process can become quite complex. Approximate timelines and estimated costs for each stage of an eviction are outlined below:

Notice to Quit Stage

  • Timeline: 7-61 days
  • Expense: $5 – $50 for service (plus costs of counsel)

Complaint Stage

  • Timeline: 1 month+ (for a default judgment)
  • Expense: $140-$200 filing fee (plus costs of counsel)

Contested Evictions

  • Timeline: 2-24 months
  • Variables: Venue, parties, bench/jury trial, and competency of counsel
  • Expense: hours and hours of time OR attorneys fees and costs

Jack O’Donohue, Real Estate Attorney at Dalton & Finegold, LLP
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Stay Out of Trouble and Make Money

If you are a novice real estate investor, Massachusetts is a terrible place to do business. In fact, it might be one of the worst places in the country for investors operating without enough capital to take some serious lumps.

If you want to enjoy the incredible ROI Massachusetts landlords enjoy, you must act responsibly and BEYOND reasonable at all times. “Reasonable” behavior keeps me in business. Behave in a manner consistent with that of a host/hostess at the Ritz-Carlton, and you should avoid unnecessary conflict.

Landlord-tenant disputes can be extremely costly in measures of time and real dollars. Massachusetts landlords are held to a higher standard of care and conduct by our civil justice system. Many tenant friendly laws provide for generous (and sometimes non-sensical) damages of attorneys fees and costs.

I’ve summarized the main problem areas into four categories with corresponding tips that if you follow, you will (hopefully) stay out of trouble!

The Condition of the Rental Unit

  1. Review the Massachusetts Sanitary Code and make repairs immediately if they are needed! Call your Board of Health/Inspectional Services Department for a pre-rental inspection.
  2. Obtain and review a signed Lead Law Notice disclosure and obtain a letter of compliance from a lead inspector.

Potential damages for the tenant for breaches of the implied warranty of habitability and/or breaching the covenant of quiet enjoyment are equal to 3x months rent plus attorneys fees and costs.

Discrimination

  1. I’m borrowing this rule from the Kindergarden chalkboard: Treat everyone as equals.
  2. Always have a completed rental application before considering interested parties as prospective tenants.
  3. Check every applicant’s prior landlord references, credit reports, and employment and pick the tenant most likely to pay rent every month! Make a legitimate business decision!
  4. You cannot refuse to show or rent an apartment on the ground that it contains lead paint. You may delay the start of the tenancy (by up to 30 days)
  5. You may not discriminate against recipients of federal, state, or local public assistance.

Potential damages in the tenants favor are at the mercy of the judge and/or jury!

Retaliation

This is complicated law. The wrong communication may cost you thousands of dollars!

  1. Most of the time, this claim arises when a tenant calls the board of health for an inspection. I’m always fielding calls about this claim. Be careful with your conduct. Act in the manner consistent with the prudent business person.
  2. Massachusetts landlords face a rebuttable presumption of retaliation.

Potential damages for the tenant are equal 1x-3x months rent plus attorneys fees and costs.

Security Deposit Violations/Bad Accounting Practices

  1. Always provide a Statement of Condition and receipts for all deposits.
  2. Keep the money in a SMART place. (Separate interest bearing account, located in MA, beyond the Reach of your creditors, and easily Transferrable.
  3. Return the security deposit plus interest within 30 days. You may deduct for unpaid rent, unpaid tax increases, and anything above/beyond reasonable wear and tear.
  4. If you are going to deduct from a security deposit, the remaining balance must be returned with an affidavit accounting for all deductions.

Potential damages for the tenant are equal 3x the security deposit plus attorneys fees and costs.

Jack O’Donohue, Real Estate Attorney at Dalton & Finegold, LLP
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