MassLandlords to Attorney General: Amend Landlord-Tenant Security Deposit Regulations Verbiage

By Kimberly Rau, MassLandlords

In October 2021, MassLandlords sent a formal petition to Attorney General Maura Healey, asking for an amendment to the verbiage in 940 CMR 3.17, the state’s general regulations for landlord-tenant relationships.

The first of three pages in a letter from Attorney Peter Vickery on behalf of MassLandlords to Attorney General Maura Healey. The top of the letter bears the letterhead of Bobrowski and Vickery, LLC, and has contact information for both the law firm and the attorney general. It is titled “Petition to Amend 940 CMR 3.17. The letter reads as follows: Dear Attorney General Healey: On behalf of MassLandlords, Inc., and pursuant to G.L. c. 30A, Section 4, I respectfully petition you to amend 940 CMR 3.17 so as to delete from 3.17 (4) (k) the words “or...otherwise fail to comply with the provisions of M.G.L. c. 186, s. 15B.” By these words, 3.17 (4) (k) imposes treble damages and attorney’s fees for violations of the security-deposit law that the Legislature exempted from these remedies. The statute (G.L. 186 Section 15B) imposes treble damages for violating three specific paragraphs of subsection 6, namely paragraphs (a), (d), and (e): If the lessor or his agent fails to comply with clauses (a), (d), or (e) of subsection 6, the tenant shall be awarded damages in an amount equal to three times the amount of such security deposit or balance thereof to which the tenant is entitled plus interest at the rate of five per cent from the date when such payment became due, together with court costs and reasonable attorney’s fees. G.L. c. 186 section 15B (7). In providing for treble damages and attorney’s fees for these particular violations, the Legislature chose not to impose treble damages for violations of subsection 6(b) and (c), which impose forfeiture as the sole remedy against any landlord who: (b) fails to furnish to the tenant within thirty days after the termination of the occupancy the itemized list of damages, if any, in compliance with the provisions of this section; [or] (c) uses in any lease signed by the tenant any provision which conflicts with any provision of this section and attempts to enforce such provision or attempts to obtain from this tenant or prospective tenant a waiver of any provision of this section. The Legislature chose multiple damages as the remedy for violations of three paragraphs of subsection 6, and forfeiture as the remedy for violations of the other two paragraphs. Letter continues in next image.

Page 1 of Attorney Peter Vickery’s letter to Attorney General Maura Healey

State regulations allow for any interested person to petition an agency and request any regulation be adopted, amended or repealed.

940 CMR 3.17 Sec. 4, which specifically governs security deposits, has 10 practices that are considered “unfair or deceptive,” including failure to return a security deposit. However, an 11th point, (k) reads “otherwise fail to comply with the provisions of M.G.L. c. 186, s. 15b.”

This verbiage effectively imposes treble damages and attorney’s fees for violations of the security-deposit law that the Legislature had exempted from such penalties.

“The statute (G.L. 186, § 15B) imposes treble damages for violating three specific paragraphs of subsection 6, namely paragraphs (a), (d), and (e):

If the lessor or his agent fails to comply with clauses (a), (d), or (e) of subsection 6, the tenant shall be awarded damages in an amount equal to three times the amount of such security deposit or balance thereof to which the tenant is entitled plus interest at the rate of five per cent from the date when such payment became due, together with court costs and reasonable attorney's fees,”

wrote attorney Peter Vickery on behalf of MassLandlords.

Page 2 of a letter from Attorney Peter Vickery on behalf of MassLandlords to Attorney General Maura Healey. The letter continues: However, the regulation effectively imposes multiple damages for violating any part of section 15B, an alternative route that the Supreme Judicial Court has noted: Even apart from the remedies provided by Section 15B, we not that similarly situated tenants have further recourse, as they may have rights under G.L. c. 93A, section 9, including to multiple damages where the landlord fails to return the forfeited amount or offer a settlement in response to a demand letter from the tenant. See 940 Code Mass. Regs. Section 3.17(4) (1993) (interpreting c. 93A to cover landlord’s misconduct under section 15B); McGrath [v. Mishara], 386 Mass. [74, (1982)] at 86¬–87... (affirming award of multiple damages under c. 93A in security deposit disput). Phillips v. Equity Residential Management LLC. 478 Mass. 251, 261 (2017). Absent the regulation, a court would not have no authority to impose multiple damages for violations of subsection 6 (b) and (c). In construing statutes, it is well established that “where the Legislature has employed specific language in one portion of a statute, but not in another, the language will not be implied where it is absent.” Simmons v. Clark-Magistrate of Boston Division of Housing Court Department 448 Mass. 57, 65 (2006). See also Dartt. V Browning-Ferris Indus., 427 Mass. 1, 8 (1998) (“we will not add to a statute a word that the Legislature had the option to, but chose not to, include”). By creating this alternative regulatory route to multiple damages for acts and omissions that the Legislature chose to exempt from multiple damages, the Office of the Attorney General usurped a legislative function contrary to Article 30 of the Massachusetts Declaration of Rights, which provides in pertinent part that “the executive shall never exercise the legislative and judicial powers, or either of them.” Further, in 1976 the Legislature created the requirement for agencies to file a small business impact statement. St. 1976, c. 459, section 2, which rewrote c. 30A, section 2. To the best of my knowledge, and based on my research, the Office of the Attorney General did not file a small business impact statement. In fact, the impact of the regulation on small businesses has been significant. As members of MassLandlords will testify, the prospect of treble damages and attorney’s fees for omitting to provide a former tenant with a sworn statement of itemizing damages within 30 days of the end of the tenancy – an omission that would trigger only forfeiture under section 15B, 6 (b) – has prompted many landlords to eschew security deposits altogether and insure against property damage by setting a higher rent. There are many reasons for the dearth of affordable housing in Massachusetts, and while I do not suggest that this factor is the cause it is certainly a cause. If the Office of the Attorney General were inclined to consider the security deposit statute poorly drafted and in need of repair, there would be no disagreement from MassLandlords. Deletion of the required regulatory wording could be accomplished by a public statement about the need to overhaul this important set of renter protections, both to eliminate triple damages in cases of good faith attempts by scrupulous landlords to comply with the law and to protect renters from unscrupulous landlords who wrongly retain security deposits that they are not entitled to use. My client would welcome the chance to work with the Office of the Attorney General to draft a new security deposit law. Letter continues in next image.

Page 2 of Attorney Peter Vickery’s letter to Attorney General Maura Healey

Vickery went on to note that paragraphs (b) and (c) were exempted from these damages and fees. Paragraph (b) discusses landlords who don’t provide an itemized list of damages to tenants within 30 days. Paragraph (c) discusses landlords who have lease provisions that otherwise violate the state laws governing security deposits.

Vickery argues that if the Legislature means to impose treble damages and attorneys’ fees for things such as returning the wrong amount of interest on a security deposit, it would have been specifically highlighted in the statutes. It does not specify such damages. However, the verbiage in 940 CMR 3.17 imposes multiple damages for any violations of s. 15b.

Page 3 of a letter from Attorney Peter Vickery on behalf of MassLandlords to Attorney General Maura Healey. The letter continues: In the meantime, on behalf of MassLandlords, Inc., and pursuant to G.L. c. 30A., section 4, I respectfully petition you to ament 940 CMR 3.17 so as to delete from 3.17 (4) (k) the words “or...otherwise fail to comply with the provisions of M.G.L. c. 186, s. 15B.” Thank you for your attention to this matter. Sincerely, Peter Vickery, Esq. Cc: Client The letter is signed by Peter Vickery using an electronic signature.

Page 3 of Attorney Peter Vickery’s letter to Attorney General Maura Healey

“Absent the regulation, a court would not have no authority to impose multiple damages for violations of subsection 6 (b) and (c).  In construing statutes, it is well established that ‘where the Legislature has employed specific language in one portion of a statute, but not in another, the language will not be implied where it is absent,’” Vickery wrote.

Though the law allows anyone to petition for changes to regulations, it does not specify a timeframe in which the addressee must respond. MassLandlords plans to continue to pursue the issue, and we will continue to update this story as it develops. This lays the groundwork for future movement towards broader security deposit reform.

The full letter from Vickery to the Attorney General can be viewed in the three images following this article.

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