Landlord and tenant disputes in Massachusetts can result in a court battle spanning many months. Tenants often don’t pay rent to the landlord during this time, pending the results of the court case. Landlords are often concerned that it will be difficult to obtain any rents due as one large lump sum at the resolution of the case, as tenants may end up spending that money on other things if it’s not put aside each month. Massachusetts law allows landlords to file a motion requesting a rent escrow. This would require the tenant to make payments into an escrow account until the case is resolved. In September 2019, a ruling by the Massachusetts Supreme Judicial Court clarified factors considered for rent escrows in Massachusetts. Below is a summary of those guidelines.
1 – Trial Length
Judges should consider the amount of time that it may take to resolve a court case. Cases that are likely to be resolved quickly may not warrant an escrow as much as those expected to be long-winded. For instance, jury trials always take much longer than non-jury trials.
2 – Rents & Mortgages
Several financial factors are important for judges to evaluate. This includes the rental rate, whether partial rents are paid, and the landlord’s financial obligations for mortgage, taxes, and property expenses. In some cases, not receiving rent can leave a landlord in danger of foreclosure and should therefore be a factor.
3 – Tenant’s Expenses
It’s not uncommon for tenants to pay for their own repairs when landlords fail to act within a reasonable amount of time. When tenants have spent their own money to make a property livable, judges may require less money be placed in escrow since tenants will likely be reimbursed for those expenses. This is due to the repair and deduct law in Massachusetts, which applies to certain types of emergency repairs. Learn more about this at the Mass.gov website.
4 – Tenant’s Counterclaims
Typically landlord-tenant disputes include claims by both parties. Landlords often seek unpaid rents and tenants often dispute the amount of rent due given property condition, existence of building code violations, mishandled security deposits, etc. As judges review motions for rent escrows in Massachusetts, they can weigh a tenant’s specific counterclaims. Counterclaims are important since they may reduce the fair market rent that will ultimately be assigned to a property.
5 – Tenant’s Financial Circumstances
A tenant’s financial circumstances are another consideration for judges in Massachusetts. Some tenants cannot even afford to hire a lawyer to represent them in court. Judges must weigh this against the other factors noted above.
Summary of Factors Considered for Rent Escrows in Massachusetts
As you can see, there are many factors considered for rent escrows in Massachusetts. Every case is unique and should be assessed on its own merits. If a judge deems a rent escrow appropriate and necessary, funds can be placed in an escrow account managed by either the landlord’s attorney, tenant’s attorney, or given directly to the landlord (i.e. to avoid potential foreclosure as mentioned in #2 above). Since a hearing is required when a landlord requests a rent escrow, both parties have an opportunity to plead their case and provide supplementary information to the judge. Ultimately, it will be the judge’s decision.