A Fee Too Far: Assisted Living Facilities Covered by Landlord-Tenant Law

By Peter Vickery for MassLandlords

Is an assisted living facility a lessor? No, said the judge in the March 2018 case of Ryan V. Mary Ann Morse Healthcare Corp. Yes, said the judge in the August 2018 case of Hennessy v. Brookdale Senior Living Communities, Inc., reiterating his decision in last year’s case of Gowen v. Benchmark Senior Living, LLC.

Assisted living facilities offer a level of community amenity not contemplated by the decades-old landlord-tenant law. Brookdale Eddy Pond West, in Auburn, one of the communities being sued.

In the Ryan case, Judge Christopher K. Barry-Smith ruled that by enacting a particular statute to regulate assisted living facilities (G.L. c.19D) the Legislature implicitly exempted them from landlord-tenant law. Therefore, the facilities are not covered by G.L. c.186, §15B(1)(b), the provision that spells out the exclusive list of items that landlords can require prospective tenants to pay at the start of a tenancy:

At or prior to the commencement of any tenancy, no lessor may require a tenant or prospective tenant to pay any amount in excess of the following:
(i)       rent for the first full month of occupancy; and,
(ii)      rent for the last full month of occupancy calculated at the same rate as the first month; and,
(iii)     a security deposit equal to the first month’s rent provided that such security deposit is deposited as required by subsection (3) and that the tenant is given the statement of condition as required by subsection (2); and,
(iv)     the purchase and installation cost for a key and lock.

But in the Hennessy and Gowen decisions, Judge Kenneth W. Salinger reached the opposite conclusion. He ruled that when the Legislature enacted c.19D it expressly exempted assisted living facilities from some statutes, but G.L. c.186, §15B was not among those exemptions. So an assisted living facility is a “lessor.” Therefore, at the outset of the tenancy it can only require residents to pay first and last months’ rent, a security deposit, and the cost of installing a new lock and key. Demanding any additional payments would violate the statute.

In the Gowen case, Judge Salinger left open the possibility that facilities could charge a community fee for “services that are beyond the scope of a typical residential tenancy... without running afoul of §15B.” In Hennessy, however, the plaintiff claimed that the facility used the community fee, at least in part, to prepare her apartment for occupancy.

According to reports in Massachusetts Lawyers Weekly, Brookdale Senior Living Communities (the defendant in the Hennessy case) will be taking the matter to the Appeals Court. If the Appeals Court upholds Judge Salinger and decides that assisted living facilities are, like regular landlords, only allowed to require the charges listed in c. 186, §15B, and that any “community fees” that pay for services typically associated with residential tenancies are unlawful, the stage will be set for class-action suits.

Regardless of whether an appeal is filed, or whether assisted living facilities are properly lessors, the law itself may need to be amended. There are good economic reasons why an asset-rich, income-poor resident may wish to pay a higher percentage of their rental costs up-front. To the extent the law restricts freedom of payment, it restricts the diversity of housing available and diminishes the freedom and dignity of the people it means to protect.

We will report on any appeal if it develops.