Massachusetts News 

September 2--Massachusetts is considering a bill to mandate rent escrow for tenants withholding rent. Rent escrow is payment of the rental amount to a third party. Under the new legislation, when a tenant seeks to withhold rent due to code violations, they must put the money into escrow rather than use it for other purposes. Currently, when served with an eviction notice, tenants may withhold rent, claiming that the building does not meet codes. While the tenant’s claims are investigated, the landlord receives no money, and the tenant may spend the rental money in some other way. Landlords and tenants have drastically differing opinions of the proposed legislation. We will present both arguments here. 

The following are questions and answers about rent escrow from The Small Property Owners Association: 

Myth: Rent escrowing would require tenants to put up money before they could have their day in court.  

Response: Absolutely not true. Who are they kidding? No landlord can evict a tenant without an order of execution. Only a judge can give the order and only after a trial. If there is no trial, the tenant cannot be evicted! Rent escrowing applies only to code violations and would simply make sure a tenant is truly withholding rent, not pretending to withhold. Escrowing would stop the trick of tenants who report code violations, falsely claim rent withholding, damage their apartment and obstruct repairs–all to delay eviction and live rent free. 

Myth: Tenants would have to escrow whatever amount the landlord asked. 

Response: Not true. Only the agreed-upon contract rent needs to be escrowed. The tenant cannot be evicted without a trial. Any such concern would be heard by the judge. 

Myth: Tenants would have to put up money before they could claim damages from code violations. 

Response: Not true. A tenant can always go to a trial to sue for damages from code violations. That’s what the U.S. Supreme Court said was correct when it ruled rent escrowing constitutional: "The Court has twice held that it is permissible to segregate an action for possession of property from other actions arising out of the same factual situation...The tenant is not foreclosed from instituting his own action against the landlord and litigating his right to damages..." 

Myth: What if there is no heat or no water and the tenant spends their rent money on fuel or portable heaters or food? How could they escrow their rent? 

Response: No tenant can be evicted without a trial. At trial, they can show the judge their receipts. If the judge rules the expenses are bona fide (and the tenants paid or escrowed the rest of the rent), they won’t be evicted. 

Myth: If rent were escrowed, how would it help an owner facing foreclosure? 

Response: A judge will be able to order funds out of the escrow account for needed repairs or to pay the mortgage. 

Myth: Landlords win eviction cases over 90% of the time. They don’t need escrowing.  

Response: Landlords who "win" almost never recover the lost rent that judges say they are owed. Escrowing will stop this theft.  

Myth: 85% of eviction cases are resolved in less than two weeks. Landlords don’t need escrowing. 

Response: This is not true. The time required for notices and dispositions to the final execution add up to well over 60 days. That doesn’t count the time most landlords wait before they serve a notice to quit. 

Myth: Local inspectors, already overworked, will be swamped. 

Response: Not true. Escrowing will eliminate inspections requested just to delay evictions for non-payment. Inspectors want escrowing, to free them from fraudulent cases to pursue their real work. 

Myth: Escrowing means unpaid rent can’t be used as a deposit on a new apartment or down payment on a new home. 

Response: Do we really have to answer this objection? 

Johnna Kovitz, speaking as a Boston tenant, offers opposition to the new rent escrow legislation:  

Mandatory rent escrow would require tenants to do what no other people in this country must do: pay to have their day in court. This is not the American way. Such legislation is unnecessary in light of the very small number of eviction cases that are contested by tenants, as well as the existing ability of courts to require tenants to escrow rent in appropriate cases. Mandatory escrow would drastically undercut the ability of tenants like myself to defend against eviction. 

In order to be even heard by a court, the bills would require tenants to escrow the amount of rent that a landlord claims is owed. In what other context must a defendant pay what the plaintiff contends is due simply to be heard by a court? In many cases, the landlord initiates an eviction because the landlord and tenant have been unable to agree on a rent increase. In such cases, it would clearly be unfair to require the tenant to pay into court any figure the landlord sets as rent, as a precondition to asserting his defense against eviction. Both parties – landlords and tenants – have the right to present their claims to the court. 

Moreover, courts already have the power to require tenants to escrow rent pending trial. Landlords can request that courts order tenants to escrow rent prior to trial in cases that have been continued. Judges have done so in appropriate cases. Mandatory escrow, however, would prevent judges from fashioning appropriate protections for both landlords and tenants depending on the unique circumstances of individual cases. 

In addition, the majority of eviction cases are quickly resolved. According to a study by the Massachusetts Law Reform Institute, while there are a large number of eviction cases; few are contested. The Institute found that between 81 and 86 percent of eviction cases are disposed of in less than a month, and 61 percent were disposed of in less than 11 days. 

Some of the bills would also create barriers to tenants getting repairs by prohibiting withholding of rent unless local boards of health first inspected the premises. The right to withhold rent in order to get landlords to make repairs cannot depend on the short-staffed and overburdened boards of health. 

With few contested cases and with an existing remedy that allows for rents to be escrowed in appropriate cases, there is simply no justification for such a draconian amendment to the law. 

This "tenant’s" response is a sham. It was obviously written by a legal professional. When Massachusetts News contacted Greater Boston Legal Services for a response, they declined, saying they only represent tenants. Then they proceeded to ghost-write the response. Such deception is common for GBLS. Every day it cooperates in the practice of turning non-payment of rent into "rent withholding."  

The response is riddled with deception. It is not true that "tenants must pay to have their day in court." No landlord can evict a tenant without going to court, and the tenant pays no money for the hearing. Escrowing would prove the tenant really has the "withheld" rent. Is the escrowing tenant "paying to have their day in court?" No, they are just paying their ordinary rent.  

What this response deceptively omits is that 95% of all eviction cases are non-payment of rent, not for rent increases or other reasons. The real reason we need to have rent escrowing is because some tenants call the health inspector right after they get the eviction notice to report code violations so they can slow down their eviction with the "rent withholding" claim. Does anyone doubt that some tenants will block repairs or deliberately cause damage to keep the code violations going as long as they can? The reason that most evictions appear to be short and uncontested in court records is because all the delay and struggle to do repairs occurs before landlords ever get to court. Rent escrowing would stop this costly, destructive practice. 

Johanna Kovitz outlines tenant objections: 

1) The assumption that tenants are not intelligent enough to understand or articulate legal arguments is an unfair one. 

2) In a practical sense, if a tenant’s eviction defense cannot be considered by a judge unless the tenant first pays any amount a landlord claims he owes, this amounts to the tenant having to pay to have his day in court. 

3) Many tenants find that the only way to get their landlords to make needed repairs is to withhold rent. Many hesitate to call the health inspector because they prefer to settle disputes directly rather than escalate an atmosphere of antagonism. Such tenants would be penalized because they would not be able to present evidence of housing code violations in a defense against eviction. 

4) The suggestion that tenants block repairs or deliberately cause damage is simply inflammatory. 

5) Just as landlords need protection against non-payment of rent, tenants need protection against landlords who charge excessive rents but do not keep their apartments up to code, especially in a tight housing market where rents have soared since 1994. 
 

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