Landlords Beware: Recent Decision Limits Fees

A recent federal court decision rebuked a large landlord for charging non-refundable amenity fees at the start of the lease.  See Hermida v. Archstone Properties (D. Mass. Nov. 29, 2011).   United States District Court Judge William Young found that such fees, which are often charged for cleaning or for use of common facilities such as pools, violate the Massachusetts Security Deposit Act.  See  G.L.c. 186, §15B(1)(b).

Judge Young found that under Massachusetts law, landlords can charge tenants only for first and last month’s rent, a security deposit, and a key installation fee.  That’s it.  Landlords that have been charging so-called amenities fees may be in trouble.  The attorney for the plaintiff tenants in the recent case has filed more lawsuits against property management companies and Judge Young approved the case for a class action.

While it may be tempting for landlords to use such fees in lieu of a security deposit and the complex statutory requirements regarding them, or in order to offer lower rent rates, this decision shows that it is a risky choice.

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