We really need to stop Tenant Retaliation Against Landlords (TRAL) in MA (sometimes referred as “The Free Rent Trick”). Come to the State House in Boston for the hearing tomorrow (2-25-14) at 10am to discuss that very issue. We need to make Rent Escrow mandatory in order to close this loophole in the law that tenants are using with devastating financial and emotional effects against landlords. Tenant Retaliation Against Landlords does not only harm the housing providers of MA. It also clogs all the Health Boards and the Housing Courts. One estimate puts these Bad Faith Calls to all MA Health Boards at 95%.
I my case they are 100%.
I went back and looked at all my records as to how many times the Health Board was called against me over the past 15 years, 50 apartments and why. I already knew that I am a good landlord who repairs when tenants call so I already knew that ALL of these calls to the Health Board were made in Bad Faith, in Retaliation or just because the tenant ran out of money for the rent but I wanted to look at them one more time and now I am documenting them here for the world to see what was the real reason for the call.
6-10-03 I had asked the tenant not to leave his speakers on the outside window blasting music and she called the Health Board immediately after that. This cost me about $4,000 because the Health Board demanded that I install a laundry room for the whole building.
7-8-05 Tenant called the Health Board after I served her with a Notice to Quit for Cause. In the Notice I had listed over 10 violations of the Lease among them unsanitary conditions, broken windows, broken screens, refusing to clean graffiti that they caused, refusing to stop loud music, refusing to remove unauthorized by lease occupants, multiple water floods to downstairs, emptying the fire extinguishers just for sport, etc.
9-21-08 This tenant was having financial problems and called the Health Board after receiving 3 consecutive 14-day notices and after I finally confronted her about them. We ended up with a Court Agreement. I don’t remember how much is cost me but I allowed this tenant to stay and on 3-24-10 she called the Health Board on me again when she ran out of money for the rent and she went door-to-door to incite other tenants to join her.
7-13-08 Out of the blue this tenant left me extortionary voice messages claiming that I poisoned her with boric acid (but she would not involve lawyers if I lowered her rent, she said in the voice mail) and then she proceeded to spread this misinformation about me to other tenants. After I served her with the Notice to Quit because of these extortionary messages, she called the Health Board in retaliation. The tenant found a lawyer who wanted a $104,000 payday, I was accused of Discrimination because she said she was told I called her “crazy and paranoid” to a 3rd party, the case lasted two years ending in front of a jury and they found that the tenant had no case at all and ruled in my favor all 6 of her Claims. They decided that there were no Poor Conditions, No Retaliation on my part, No Discrimination, No Discriminatory Statements, etc. Housing Court Judge went behind the back of the jury on one claim and made me pay $3,000. I don’t have the exact numbers but It must have cost me over $10,000 to defend myself for nothing other than tenant retaliation against me.
4-20-10 I charged them $50 for materials and labor to fix damages due to the fact that they let water overflow from their bathtub into the downstairs apartment. They did not like being asked for money and called the Health Board in retaliation after they got my letter.
Sept 2010 Without knowing the reason for not paying her rent I served the tenant with a 14-day Notice. She called the health board right after that.
Oct 2010 I received a letter from a tenant claiming to have bedbugs in her apartment. I immediately hired an exterminator who wanted to treat the bedbugs but the tenants refused further access and stopped paying rent. When I sent them the standard 14-day Notice, they called the Health Board in retaliation. My insurance gave them money to leave and their lawyer to stop the non-sense but in the end it must have cost me over $10,000 out of my pocket.
3-30-12 Not knowing why she had not paid her rent I served the tenant with a 14-day notice to quit. After she received it she called the Health Board and claimed the mold (which, by the way, she caused because she did not use shower curtains properly and which also, by the way she had agreed to take care of) caused health issues for her children. Then she prevented me from doing repairs. Turns out she simply did not have money for the rent. The gas had been shut off awhile back for non-payment. She found a lawyer. I had to pay her $1000 in a Court Agreement and it cost me another $3-4,000 in misc travel, repairs, etc.
9-30-2013 The tenant had moved my fridge (which by the way was brand new) outside in the rain because they had purchased a fridge on their own. When I found out it had already been there for many months and was full with mold I asked them to bring it inside. They refused to clean it AND refused to bring it back. I texted them that in that case they must leave and in retaliation to my text message they called the Health Board. They found a lawyer. In a court agreement I gave them $700 to leave plus all the time and materials for repairs, the week of my time it took for me to answer their lawyer’s 30 questions and provide 30 documents as part of Discovery, etc, It must have cost me over $4,000 in wasted time, unnecessary trips, repairs, etc.
Well, there you have it.
The record shows 100% of Bad Faith and Retaliatory Calls to the Health Board.
It is so bad in MA that we risk Tenant Retaliation every time we try to exercise our rights. Nothing can turn into Something big really quickly with the state of the landlord-tenant laws in MA.
I have summarized these cases for you but my point is that behind each of these cases there is a lot of drama and a lot of hidden expenses.
Because there will be people who say “I don’t believe you that all of these calls were Retaliatory. How do we know if you are telling the Truth?” I have decided to share all the paperwork from the latest case so that you can see for yourself how Tenant Retaliation Against Landlords (TRAL) works in practice.
The only way these abuses can be curbed is by requiring tenants who want to use the Health Board to demonstrate to the Health Board official and us, the Landlords, that they have all the money for the rent in a bank escrow account or court escrow account and then if the matter reaches court the court will distribute the money according to the judgment. If they cannot demonstrate that they have the rent to begin with, it must be assumed that they called the Health Board in bad-faith and they must be precluded from raising Habitational Defenses and Counterclaims in court against us.
Ok, here is the latest case of Tenant Retaliation Against Landlords in more detail.
When we reached court their lawyer’s initial position during the mediation was 4 FREE rents plus they get to keep the new Refrigerator because they had to clean it from the mold (which they caused !!!!!). I offered 1 free rent but they wanted to go in front of the judge. The lawyer and I appeared in front of the judge but in the middle the trial the lawyer wanted all the texts (not just the ones from 9-2-13) and all my emails to Health Board and the judge postponed the trial with 1 week. After he read my documentation the lawyer came to me the next week with his tail between his legs and said his clients would accept what I had offered originally – 1 free rent and then leave. We settled out of court.
So on one hand you can see how these Health Board cases are created in a bad faith and retaliatory manner. On the other hand the problem is that if we don’t repair the Health Board violations we may be found negligent and therefore automatically in violation of Breach of Quiet Enjoyment and will have to pay 3 rents to the tenant as if though they are the victim. So we are stuck in a Catch 22 situation. Damned if you do and damned if you don’t.
Something’s got to give.
This Tenant Retaliation Against Landlords is a big problem in MA. Legislators every year ignore our requests to modify the law. In addition, most landlords are certainly to blame because they do not go to these hearings and do not even know who their Representatives are and therefore they deserve (in a way) the anti-landlord laws just the way they are. Why should the lazy Senators and representatives do anything if there is no pressure and if they are not shamed into action?
The two people most responsible for all of this are Sen. Jamie Eldridge and Rep. Kevin Honan who refuse to give a favorable recommendation for this and allow it out of the Housing Committee so the House can vote. They are the Chairs of the Housing Committee. One of them used to be a Legal Services Tenant Lawyer and the other is a career politician (over 27 years) with very little real-life business experience before he got elected. I met with Sen. Eldridge and he refused to engage further and Rep. Hoonan refuses to meet with me. My blog is the most popular blog in MA for landlord issues with over 6,000 individual readers in 2013. It’s one thing to state why they believe TRAL should remain the law, it’s another thing to hide behind their chairs and lack the balls to even have the discussion.
Today I went to the State House and testified in front of the Housing Committee. During my testimony I jokingly mentioned that Rep. Honan refuses to see me and he finally met with me for 10-15 min after the Hearing.
It was a good Hearing. The tide is definitely moving in our favor and hopefully this year this bill will come out of the Housing Committee. About 18 people testified for Mandatory Rent Escrow and 16 for tenant issues but only 2 of them were against Mandatory Rent Escrow.
One question that rep. Eldridge asked during the Hearing was “What percentage of tenants use the Free Rent Trick?” trying to make the point that because it is a low percentage, no change in the law is required. Well, the truth is that about 5% of tenants resort to Retaliation but that low number is misleading because even one case of Retaliation can bring a landlord to bankruptcy and/or foreclosure. One thing to understand is that landlords’ profit (salary) is about 10% of rents. The rest goes to pay for mortgages, taxes, insurance, repairs, utilities, etc. So if you collect $100,000 from rents, your yearly salary is about $10,000. One retaliatory call to the Health Board can easily cost you $5,000 – that’s half of your yearly salary! Most MA landlords collect less than $100,000 in rents.
During the meeting with Rep.Honan I repeatedly asked him: “How do you feel about the issues we raise?”, “How do you feel about this bill?”, “What are the reasons this bill is not voted favorably out of your committee?”, “Do you have any concerns that I can address?” and the answer was consistently: “We are studying the issues and listening to both sides”. (hmm, you are “studying” this issue for 17 years? (:)
Rep. Honan asked me: “Why not let the judge order rent escrow?” The answer to that question is: “Because it takes 2 months to reach a judge. By the time we reach a judge, it’s already too late – two months of rent have been stolen and spent already. Even if the judge orders rent escrow (and they rarely do even when asked, I have tried 3 times and the answer was “no” because it’s not required by law) it will be too late. Having rent escrow at the time of the Health Board inspection is what we need. The health board inspector should give the tenant a statutory letter informing the tenant that they have 3 business days to put the rent in escrow otherwise they cannot use the Health Board report as Defenses or Counterclaims in Court because they will be presumed to have called in Bad Faith.
By the way having the rent in escrow also protects the Tenant because when the court’s order is that the Landlord owes, let’s says, 30% of the rent to the tenant because of “poor conditions” and he is entitled to the remaining 70%, the tenant is given (according to current law MGL 239, 8A) one week to come up with the 70% or they become homeless. Since the rent was never escrowed most tenants can’t come up with it. So Mandatory Rent Escrow actually can help preserve the tenancy. That point is missed by most Landlord and Tenant Advocates.
Another question that was raised was “Doesn’t Mandatory Rent Escrow deprive tenants of their due process rights?”. The answer is “No”. Tenants still have the right to call the Health Board and poor conditions documented and they still can have their day in Court. The only thing that changes is that they need to demonstrate that they have the rent in a safe place. They are supposed to have the rent to begin with. We are simply asking that they prove that they have the rent to make sure they did not call the Health Board in Bad Faith, Retaliation or because they don’t have the rent. About 95% of all calls to the Health Boards are made in Bad Faith and about 50% of all Housing Court cases are caused by these calls.
And finally the question was raised “If tenants cannot withhold rent, wouldn’t landlords lose motivation to repair?” Well, tenants can still withhold rent and they can still use some of the withheld rent to repair (provided they can produce the required receipts later). The difference is that they can withhold but they cannot spend the rent on anything other than repairs (like food and utilities, for example, as they are doing now). This money does not belong to them to spend it. It belongs to the landlord until a judge says otherwise. Landlords have due process rights too (not that anyone cares about it (:) Landlords will not lose motivation because they want to get as much of the escrowed rent as possible. The longer they delay the repairs, the less they will get not to mention if they ignore the Health Report completely they can be found negligent and owe the tenants three rents.
Rep. Honan politely listened to what I had to say, asked several questions, but he did not answer mine. He kept giving me the same lame answer “We are studying the issues and listening to all sides…”
I have to say – at least we know one thing: If this bill does not come out of this Committee this year then it will never come out until the Committee gets new Chairs.