Fees and charges that are illegal

Fees and charges that are illegal

Boston, MA · Member since 2016 · 2 posts · 0 votes

Hello,

I am just getting started in real estate and just recently bought our first investment property and was reviewing landlord tenant law in Massachusetts.

I read that "Under MGL 186 § 15B, a landlord is only allowed to collect, as up-front charges to a tenant, (1) first month’s rent; (2) last month’s rent; (3) a security deposit equal to the first month’s rent; and (4) the purchase and installation cost for a key and lock" 

It also said that all other charges such as application fees, deposit to hold, pet fees, etc were illegal.

Is this true? if so, who then pays for the credit and background checks?

 Also since Massachusetts is very tenant friendly I wanted to ask if there were any other fees/charges that can be legally included in the rent  (such as lock out fee, fee for not allowing access for scheduled house repair, etc)

Any feedback will be appreciated!

Thanks in advance,

Will

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Rich N.Pro Member
Investor · Haverhill, MA · Member since 2015 · 761 posts · 328 votes
9y

@William L.

The law is that its only those 4.  I believe there was a recent court/case study that found a LL at fault for charging anything beyond the 4.  Also, it does not matter who charges it, its only the 4. 

I say this because so many folks skirt it by having the realty agency, the PM or the tenant pay it..... that court/case study still says NOPE !

So, I do not chance it and just do the 4 (actually 3, I do not do the lock fee).

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  • Investor · Tampa, FL · Member since 2011 · 2k+ posts · 3k+ votes
    9y

    I'm not in Massachusetts so hopefully some locals can chime in here, but it sounds pretty black and white to me. 

    The fees aren't as significant as the tenant friendly landlording laws. Any reason you choose to invest in that state being from NYC? I can understand why the locals do it, but most landlords don't seek out the most tenant friendly states to invest in. I've read some horror stories about that state's tenants.

  • Boston, MA · Member since 2016 · 2 posts · 0 votes
    9y

    We actually recently moved to Boston from NYC. So that is why we decided to invest here.

  • Medford, MA · Member since 2016 · 85 posts · 44 votes
    9y

    @William L.

    I would consult an attorney about such questions. I am not one but here are my interpretations. 

    Short answer, yes those fees are illegal to charge the tenant. The landlord or rental agent pays the credit and background checks. 

    The MGL law states costs up front, they don't state costs such as lock out fees, etc. The tenant can't stop you from entering the premises to perform repairs, however be respectful and give them notice you are coming during such a day and such a time. 

    Best to read up on the Massachusetts tenant landlord laws as there are many sources out there and create a good screening process. 

  • Rich N.Pro Member
    Investor · Haverhill, MA · Member since 2015 · 761 posts · 328 votes
    9y

    @William L.

    The law is that its only those 4.  I believe there was a recent court/case study that found a LL at fault for charging anything beyond the 4.  Also, it does not matter who charges it, its only the 4. 

    I say this because so many folks skirt it by having the realty agency, the PM or the tenant pay it..... that court/case study still says NOPE !

    So, I do not chance it and just do the 4 (actually 3, I do not do the lock fee).

  • Feeding Hills, MA · Member since 2016 · 2 posts · 2 votes
    9y

    You read that correct. Those are the only four things a landlord in MA can collect $ for. Owner pays for background and credit checks. 

  • Wellesley, MA · Member since 2016 · 12 posts · 0 votes
    9y
    One fee that I think we're forgetting is late fees - which can be charged, but only after the rent is 30 days past due. You can actually begin the eviction process if the rent is past due a single day - go figure. http://www.mass.gov/ocabr/docs/landlordrights.pdf
  • Wellesley, MA · Member since 2016 · 12 posts · 0 votes
    9y
    Just realized we were only taking about up-front fees so the late fees wouldn't be applicable. My apologies
  • Investor · Great Barrington, MA · Member since 2015 · 153 posts · 39 votes
    9y
    My understanding is that www.mysmartmove.com enables you to have the tenant pay to release their credit and background to you. Therefore no money changes hands and only serious, non-lying candidates are likely to follow through. I haven't tried it yet but this is how I'm planning to handle things as a new MA landlord.
  • Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
    9y
    Originally posted by @Michael Healy:

    My understanding is that www.mysmartmove.com enables you to have the tenant pay to release their credit and background to you. Therefore no money changes hands and only serious, non-lying candidates are likely to follow through. I haven't tried it yet but this is how I'm planning to handle things as a new MA landlord.

    You'd better hope you don't end up in court.  MA housing court can and will assess punitive damages, like 3 months' rent.  Not worth the 40 bucks.

  • Investor · Great Barrington, MA · Member since 2015 · 153 posts · 39 votes
    9y

    @Ann Bellamy

    Why?  I wouldn't be collecting any money...

  • Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
    9y

    @Michael Healy, go back to @Rich N.'s post:  

    "The law is that its only those 4. I believe there was a recent court/case study that found a LL at fault for charging anything beyond the 4. Also, it does not matter who charges it, its only the 4."

    We just had Inessa Shur speak at Black Diamond about exactly this topic, among others.  You can of course do what you want, but you've been warned.  There are lots of professional tenants in MA, it's a good place to be one.  They get free legal representation, and you don't.  And they go to court at the drop of a hat, or credit check as it may be.  The housing court judges are brutal on landlords and very pro tenant.  So you'll save that $40 bucks.  Until you don't.  

  • Boston, MA · Member since 2013 · 99 posts · 28 votes
    9y

    I have prospective tenants show me a copy of their credit report, issued in the past 30 days.  And then, after doing more research, if I feel strongly enough about someone, I'll pay for a background check.

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