Small property owners continue to face an uphill battle in
Massachusetts. On March 14, 2016, the Boston City Council held a
public hearing on a proposal of tenant advocacy groups to amend the
eviction laws and in essence, cap rents in the city of Boston.
These groups, led by City Life/Vida Urbana, have been fighting for
this new legislation (titled "Just Cause Eviction") as a result of
gentrification and development. The March 14 hearing was attended
by an overflow crowd of landlord and tenant groups, including a
panel of three on each side of the dispute and hundreds of people
interested in testifying.
Not only is the intent of the proposal eerily similar to
Massachusetts' long-abolished rent control (eliminated by voter
referendum in November 1994), the additional, burdensome and costly
regulations of dubious public good will add an even greater hurdle
to an eviction process that can already take anywhere between three
months and two years.
In summary, the proposal includes:
- a prohibition on evictions for non-payment of rent until a
resident is "habitually late;"
- a limit and possible prohibition on an owners' right to occupy
his/her own unit for personal use or use by a family member;
- a prohibition on evictions for property damage if a tenant
agrees to a repayment plan for repairs whether or not the damage is
ongoing and causes harm to others;
- a limitation on evictions to those of "just cause" as
determined by the city of Boston;
- mandatory mediation with city-selected mediators for all lease
expirations, prohibitions on terminations of tenancies-at-will and
rent increases in excess of 5 percent;and
- a provision that market tenants have the right to ignore their
lease expiration date and remain in the apartment
indefinitely.
As Attorney Jeffrey Turk correctly pointed out at the March 14
hearing, the suggestion that a market tenant should be able to
remain indefinitely after the expiration of a lease flies in the
face of basic contract law. Currently tenants routinely remain in
properties as tenants at will after the expiration of their leases
and landlords already face severe penalties for violating these
leases.
The process of completing any eviction, especially one falling
under the "no-fault" category, already includes ample protection
for so-called "vulnerable" tenants. For instance, Chapter 239,
Section 8A of the Massachusetts General Laws provides, in part,
that in the event that a tenant can prove that he or she brought an
adverse condition in the property to the attention of the landlord
and said condition was not corrected promptly or said condition has
returned, the tenant is entitled to remain in possession of the
property.
Tenant advocacy groups have taken the position that large
corporate landlords, real estate speculators and "flippers" are
currently using the ability to commence a "no-fault" eviction as a
way to push people out of their communities to make a bigger
profit. As applied to the large corporate landlords, this position
may in fact adversely impact low income tenants, and while the
proposal presumably attempts to target all property
owners/landlords, it is small and mid-level property owners who
will suffer the most severe and detrimental impact if it were
adopted - especially those already struggling to make investments
worthwhile after incurring the costs of non-payment or other
evictions. In my practice, I always advise clients that being a
landlord in Massachusetts carries risks, responsibilities and
requires capital for contingencies. However, it should not go
unnoticed that every landlord offering housing to tenants unable to
purchase his/her own property is serving the general public. Small
landlords trying to build investments and communities should not be
asked to shoulder the burden of a large scale "affordable housing
crisis" that neither they nor their tenants created.
As a part of the "Just Cause" movement, tenants are being
encouraged by groups such as City Life/Vida Urban and the Harvard
Project to band together, stop paying rent, demand costly upgrades
to apartments and plant signs on lawns and in windows informing the
public that the tenants refuse to relocate. Again, this is largely
a reaction to economic realities entirely outside of the control of
landlords. As financial burdens increase (i.e., the cost of
maintaining ones' property and/or expensive legal procedures), at
some point, these private individuals will no longer be in the
position to sustain ownership of affordable rental properties. No
one will be left but large, corporate landlords with the financial
wherewithal to do as they please -- including wholesale
transformation of rental properties into market-rate condo units
for sale.
Massachusetts laws currently include adequate safeguards to
ensure no person is unnecessarily or unfairly evicted. For example,
every Thursday the Boston Housing Court begins with a 10 to 15
minute lecture by the sitting judge explaining to everyone in the
courtroom that there are dozens of lawyers and law school students
standing by to speak to tenants about their case. The staff in each
courthouse is required to inform tenants of the various "court
service centers," where they will be directed to attend a free
seminar hosted by either the Greater Boston Legal Services clinic
or Harvard Legal Aid Bureau clinic. Once there, tenants will be
advised to fill out preprinted forms on which they can check boxes
to countersue the landlord and file discovery, which automatically
delays the first hearing date by no less than two weeks. These
preprinted forms also contain a demand for jury trial that, in the
Boston Housing Court, can take between three and twelve months.
Current Housing Court Standing Orders even eliminate the deadlines
for filing, if a pro bono tenant advocate is willing to file a
"limited appearance" on the date of the initial hearing.
The pressure caused by current economic conditions cannot be
passed on to small and mid-level landlords. When a landlord is
required to spend significant money on capital improvements, and
sustain significant yearly tax and insurance increases, our system
allows a raise in rent to offset the cost. The Just Cause Eviction
proposal attempts to reintroduce rent control into the Boston
housing market. Property owners will lose more property rights to
the bureaucracy. With restrictions on rent, landlords may no longer
have the financial ability to improve their properties, causing
neighborhood deterioration. Furthermore, the proposed requirement
that landlords engage in a non-binding mediation with tenants prior
to initiating any rent increase will inevitably place strains on
landlord/tenant relationships -- turning what should be friendly
and personal relationships into hostile and adversarial ones.
Mediation is already encouraged by the Boston Housing Court and
available to all litigants with an active case.
An analogy to the lead paint laws is appropriate. There is no
question that lead paint poisons children. There is little question
that lawmakers had little or no sway over paint companies, builders
who were long gone, or banks taken over by the FDIC. Politically,
the best lawmakers could do was hold landlords liable. In the
immediate days after lead paint was banned, larger owners could tap
their insurance coverage without much damage to their businesses,
but small owners were effectively put out of business because of
strict liability.
It is always easiest to lay the most blame on the person who is
most readily available, and appears one step ahead in the pecking
order. Yes, there is a housing crisis; yes, increased homelessness
presents a public safety and public health issue. Whether or not
housing is a right is a public policy issue, and to date this
country has chosen not to deem it as such. Until such time, no one
has the right to live in another person's property without
complying with lease rules within the bounds of the law and
standards that are "commercially reasonable" for residential
property. To overburden the small/mid-level owner, regardless of
which side you are on, only avoids the bigger issue of who benefits
from the increasing stranglehold the law puts on small landlords.
They are a small business, not a monopoly. They are keeping housing
local, not changing neighborhoods by wholesale removal of its
residents. In some ways, small landlords have as yet unexplored
common ground with tenants. Both are fighting over something
relatively small, and that fight keeps both from viewing and
attacking the larger questions of housing, and more important
issues in this country including housing policy. Until larger
economic and societal issues at the root of the housing crisis are
rectified by policy changes, we will continue facing these
challenges in the rental property market. However, expanding the
existing laws and regulations that already provide adequate
protection for tenants is not a forward-thinking solution and will
only exacerbate the problems