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Educational Benefits!

Tuesday, October 25, 2011
On Tue 10-25-11 over 100 people attended our FREE seminar on the lease created by RHAGS and Stanley D. Komack Esq. drawing from ideas from several sources including large local landlords, attorneys and Mass Realtors.  It was an excellent exchange of ideas and over half of the attendees were not yet members of RHAGS.  Several of those attendees had a chance to see the value of our group and many indicated they would join. 

With our growing membership, mobilization and education of landlords we will ensure equity for landlord interests in our industry.  Though education our members we will ensure they are complying with the law so if they are in housing court they will be better prepared in making the case for the outcome they desire the courts help with.

The document given out is on our web site at www.rhags.org and can be edited and shared between members.  The public attendees were given a hard copy with a water mark and it is hoped they will join our organization to contribute to future updates of the document.

All attendees and members were asked to submit any comments and lease clauses they use which are not included in the RHAGS lease to info@rhags.org for inclusion in our next revision.

Our next free seminar will be in the Spring with a title “How to Start and Terminate a Tenancy”.  We will be creating a rental application and notices to terminate tenancies templates.  Please share your current forms with info@rhags.org so we can start working on these RHAGS templates for our members.

Switching gears to our most important initiative – Rent Escrowing Law Change.
I will be at the state house on Tuesday 11-1-11 at 10:00AM to testify on the below bills.  I look forward to seeing more landlords there saying why we need rent escrowing then tenant groups claiming it is bad.  All the bills proposals do is ask they prove they have the money for rent before claiming they are withholding due to bad apartment conditions.  Our bill proposals take no rights away from the tenants and only close loop holes.

Public Hearing Joint Committee on Housing 11/01/2011 10:00 AM, B-2 to hear several bills like the below

HB1261 Fennell An Act relative to capital relief in a counterclaim – Sponsored by MA Realtors
HB514 Stanley An Act relative to rent escrow – Sponsored by MRHA
HB1274 Adams An Act relative summary to process modification – Balance eviction process time frame
HB2273 Walsh An Act relative to the modification of late fees – Change from 30 days to 10 Days

Below is an explanation of Mandatory Rent Escrowing

Statute: Chapter 239, Section 8A, second paragraph.

Objective:  With the current legislation, a tenant can withhold rent if a call is made to the board of health and problems are found in the apartment.  Unfortunately, in some cases, the tenant does not have the rent money and even after the problems are resolved, the landlord cannot get the rent.

Problem:The proposed legislative changes would require that a tenant put the rent into an escrow account or prove they have the money if the landlord serves the tenant a notice to vacate and the tenant then proceeds to call the Board of Health to report problems.  This is called the “Free Rent Trick”.

Proof of  funds would be the current rent minus any repair costs the tenant incurs to resolve the problem.

Arguments:
While many opponents to this change state that this is a burden on the tenant, there are multiple indications that this is not.
  1. The tenant should have the money for rent.  If this is a legitimate problem (i.e., furnace isn’t working etc), then the repair costs, made by the tenant, can be deducted from the money put into escrow.  If the tenant had the repairs performed, then the tenant should have receipts for these expenses. 
  2. In some eviction situations, the tenant calls the Board of Health because they do not have the money and are looking for a way to stall an eviction.
  3. Some argue that a tenant should not have to escrow rent because he would lose his day in court (due process).  However, there is currently precedent for a payment-first scenario in other areas of real estate. 
    1. When a resident wishes to challenge the real estate tax imposed on his residence, he must first pay the tax and then challenge it. The law states that he must pay it before he can even challenge the assessment in court.
    2. Any condominium owner who wishes to challenge his condominium fee must first pay it before he can bring a court action.

 
Both these payment-first scenarios are based on the fact, so the courts say, that the towns and the condo trustees rely on these funds to operate financially and anyone who does not pay first would be jeopardizing the financial integrity of these institutions. So, they must always pay, then challenge. And the law says there is no violation of their due process rights in those instances.
 
On the same theory, there is no due process violation if renters are required to pay first, and then challenge. The landlord’s financial well-being also depends on his receipt of the rent in most cases. One can’t argue that the landlord could always get the money somewhere else in the meantime, because the condo trustees could too – by imposing a special assessment to carry them through the shortfall. So, renters can be required to pay the rent without any due process violations.