No, a landlord cannot charge tenants an additional fee for having a pet. Massachusetts General Laws 186 § 15B  states that a landlord is only permitted to collect: 

(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. 

We see and hear examples where the law is not followed by landlord and real estate licensee alike.  More commonly, we hear that many of the large, commercial apartment complexes and property management companies and landlords throughout the country charge additional fees such as an application fee, a move in fee or pet fee to tenants as a matter of ordinary business. “Company policy” for these entities must be followed, despite protests from tenants and real estate licensees.  In their defense, they state the Massachusetts law is silent as to these types of fees and that these additional fees help defray costs and sometimes add additional revenue for landlords. As discussed below, this practice is illegal in Massachusetts.

In an October 2014 ruling, the United States District Court for the District of Massachusetts found in Perry v. Equity Residential Management, LLC, (“ERM”) that ERM violated MGL 186 § 15B when it collected from its tenants an application fee, amenity fee (which was subsequently changed to a move-in fee), community fee and initial pet fee. In the court’s decision, Federal District Judge Zobel commented “Giving the statute’s words their ordinary meaning “consonant with sound reason and common sense,” Harvard Crimson, Inc. v. President & Fellows of Harvard College, 840 N.E.2d 518, 522 (Mass. 2006), section 15B(1)(b) simply is not susceptible of more than one reasonable construction. The statute is a list. If a fee is on the list then it is a permissible up-front charge; if it is not on the list, then it is impermissible.”

The court found that while MGL 186 § 15B does not explicitly forbid application fees, move-in fees or pet fees, it does state that “no lessor may require a tenant or prospective tenant to pay any amount in excess of” the four permissible charges mentioned in the statute. Noting this restrictive language, and analyzing similar Massachusetts case law, Judge Zobel ruled that the collection of such fees violates both MGL 186 § 15B and Massachusetts’s Consumer Protection Act (MGL 93a), which could expose a landlord to triple damages plus attorney fees.

Additional fees, such as pet fees or deposits and smoker’s fees are not allowable even if a tenant agrees to the charge. If a landlord allows pets and the pets cause damage to the unit beyond reasonable wear and tear, the landlord may use the security deposit to make repairs so long as the landlord has complied with all applicable security deposit laws.  It should be noted that it is not unlawful for a landlord to refuse to rent to a prospective tenant that has a pet unless that pet is a service or assistance animal needed for a disability in life.  

Even if a landlord has a “no pets” policy, they must make reasonable accommodation for a tenant with a disability in life who has the need for a service or assistance animal.  A landlord may require a tenant with a service or assistance animal to comply with certain rules, such as keeping an animal on a leash and cleaning up after it; however, a landlord cannot require that tenant to pay any additional fees associated with having the service or assistance animal in the leased premises. Generally, landlords must also permit owners of service and assistance animals to make modifications to the leased premises (such as a fenced-in yard) which may be borne at the sole expense of the tenant; who may be required by the landlord to return the property to its original condition at the termination of the lease.  Placing additional burdens on a tenant who needs a service or assistance animal due to a disability in life is contrary to both Massachusetts law and the Americans With Disabilities Act.

It is interesting to note that Massachusetts fair housing laws may protect persons with a disability in life that use “emotional support” animals which are not trained as service or assistance animals.  Additionally, trainers or owners of “service dogs in training” that will be placed into a new home for someone with a disability in life are afforded the same protections under Massachusetts law as is an owner of a service or assistance animal with a disability in life.  This is an evolving area of the law and consultation with a knowledgeable professional adviser or discussion with the Massachusetts Commission Against Discrimination is suggested before denying rental housing to anyone with an animal that they claim to be used for a disability in life or for medical or emotional reasons.

The decision of Perry v. Equity Residential Management, LLC case should be followed by all landlords, property managers and real estate licensees in Massachusetts. Landlords who continue to charge fees to tenants which are not explicitly allowed for under the law are exposing themselves to the risk of many thousands (or tens of thousands) of dollars in damages for each additional fee that they charge a prospective or current tenant.  

If you would like to discuss any of the points raised in this article, please contact GBAR Legal Counsel William G Mullen, III at 617-399-7842 or via email at wmullen@gbreb.com.
Can a Landlord Charge Tenants a “Pet Fee”?
This year, GBAR is forming a new task force that aligns with the existing National Association of REALTORS® consumer awareness campaign and the “Get REALTOR®” message which promotes the association and difference between non-members and REALTOR® members. The campaign is designed to communicate the REALTOR® brand value to consumers, targeting up-and-coming generations of home buyers, sellers, owners and investors.

 As with the current NAR campaign, this task force will focus on developing a strategy for today’s consumers to understand that REALTORS® have committed their career to helping people find the home of their dreams. We are looking for members who are passionate about the REALTOR® brand and want to help us generate thoughts on our messaging, how we can expand our reach to more consumers and showcase the associations work for REALTOR® advocacy for public policy issues that promote the preservation of property rights and homeownership.

If you are interested in serving on this task force, please contact Kevin at kbutler@gbreb.com
 
Seeking Volunteers for Consumer Awareness Task Force
NAR has issued its Aspiring Home Buyer Profile which offers and in-depth look at the preferences of non-homeowners, defined as renters or those who live with family/friend and do not pay rent. The profile is a collection of monthly data that was collected throughout 2017 that compares topics like the perceptions of homeownership and housing affordability from the non-homeowners perspective.
The profile points out that, among affordability issues, non-homeowners’ lifestyle changes and improvement in their financial situation outweigh seeing their rent increase as the main motivators for deciding to buy a home. An infographic about the report indicates that amid these challenges, more than 8 out of 10 non-owners desire to be a homeowner as well as 8 in 10 reported that homeownership is part of their American Dream.

“A tug-of-war continues to take place in many markets throughout the country, where consistently solid job creation is fueling demand, but the lack of supply is creating affordability constraints that are ultimately pulling aspiring buyers further away from owning,” said NAR Chief Economist Lawrence Yun in a press release. “These extremely frustrating conditions continue to be most apparent at the lower end of the market, which is why the overall share of first-time buyers remains well below where it should be given the strength of the job market and economy.”

For the more details and the full report, click here.
Affordability Issues Keep Renters From Realizing American Dream
REAL Trends has announced they are now accepting applications for their annual REAL Trends 500 Survey which is a report that ranks the performance of the top residential real estate brokerage firms. The survey ranks companies based on a variety of factors including sales volume, affiliation, top movers, core services, the Billionaires’ Club and Up-and-Comers. To complete a survey of your brokerage, view these instructions on how to submit a survey and visit the REAL Trends 500 webpage. The survey closes on March 1, 2018.

Additionally, REAL Trends is accepting applications for it’s The Thousand, which is a ranking of real estate agents across the U.S., based on transaction sides, individuals by sales volumes, teams by transaction sides and teams by sales volume. Click here to enter a submission, before the June 29th deadline.
REAL Trends Accepting Submissions 500 Survey & The Thousand
We’re back for our fourth installment of our popular RealTour event. These free member meetings take place in each of the five regions in the GBAR jurisdiction and offer you the opportunity to learn about some of the most timely issues and trends in the real estate industry, as well as offer feedback and insight regarding the association to the GBAR staff and leadership. 

During these RealTours, we’re pleased to have Craig Foley, LEED Green Associate and Chief of Energy Solutions at RE/MAX Leading Edge, on hand to inform our members about best practices for listing energy-efficient, high-performance homes, and strategies for how to implement a sustainability program at your brokerage. Our program will also feature Lynne Bagby, a division manager at Asset Preservation, Inc., who will lead a discussion regarding implications that revisions to the federal tax reform code will have on residential real estate.  

This is important information for you and your clients that you don't want to miss! All sessions are free of charge, include a continental breakfast and run from 9:30 a.m. to 11:30 a.m. 

Check out our dates and locations below and register for the RealTour nearest you!
Monday, February 26 – Randolph 
Tuesday, February 27 – Natick
Wednesday, February 28 – North Reading
Monday, March 5 -- Bedford
Tuesday, March 6 -- Waltham
RealTour Sessions Focus on Tax Reform & High Performance Homes
In the recently released 2018 Cost vs. Value report, issued by Remodeling magazine, which quantifies the return on investment (ROI) of home remodeling projects. In the Greater Boston report, it showed that locally, we fared slightly better the national averages for ROI on midrange and upscale projects. 

Both nationally and locally, the top project for ROI was an upscale garage door replacement, having a 104.5 percent and 98.3 percent ROI, respectively.  Other upscale projects reaping high ROI were fiberglass grand entrances, and both vinyl and wood window replacements. Among midrange projects, steel entry door replacements, minor kitchen remodels, and manufactured stone veneer projects saw high ROIs for home remodelers locally and nationwide.

For a full list of Boston, New England and national trends as well as midrange and upscale project descriptions, view the full 2018 Cost vs. Value Report here.
Additionally, a new analysis forecasts a 7.5 percent increase in home remodeling and repair spending from 2017 to 2018, to an estimated total of $340 billion. This estimate was completed by the Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University, who credited growth in home prices as a main factor to why homeowners are investing in remodeling their homes.
Cost vs. Value Report Explores Remodeling ROI
Sales of detached single-family homes and condominiums softened in December amid appreciating home prices and rising inventory, according to data released today by the Greater Boston Association of REALTORS® (GBAR).

The 1,027 single-family detached homes sold in December 2017 was a 9.7 percent decrease in sales from the 1,137 homes sold in December 2016. This total was the seventh-highest on record for the month of December, and is above the monthly sales average since 2003 of 984 homes sold. The condo market also experienced a decrease in sales as 793 units were sold in December 2017, which reflects of a 14.3 percent drop in sales from the 925 units sold in December 2016, which is also the record high for December. This was the eighth most active December on record for condo sales and sits above the historical monthly average of 772 units sold. 

“Despite these drops in overall sales, activity has remained strong and we’re seeing an eager buyer population, ready to enter the market ahead of projected increases in mortgage rates and home values in the coming year,” said 2018 GBAR President Marie Presti, broker-owner of The Presti Group in Newton. “We’re seeing the inventory levels bounce back which is a good sign for those looking to purchase a home.”

Indeed, the active listings for both single family homes and condos experienced year-over-year increases in December. Single family listings saw a 17.5 percent increase from 1,967 homes for sale in December 2016 to 2,311 homes for sale at the end of last year. This is the second consecutive month this figure has risen on a year-over-year basis. Likewise, the condo market had a 7.3 percent increase to 1,441 active listings, up from 1,343 in December 2016, and is the fourth consecutive month this number has risen or remained the same on a year-over-year basis.

The median sales price for single-family homes reached a new record high price for the month of December at $589,000, which is an 8.1 percent increase on the median sales price of $545,000 from December 2016. Similarly, the condo market also reached a new record high median sales price for the month at $542,000, which is a 15.8 percent increase from the December 2016 median sales price of $468,000.

“Even with rising inventory, potential sellers should remain confident in listing their homes, as home prices continue to appreciate,” added Presti. “Again, in December, we saw that homes are selling the market quicker than in years past, indicating just how strong the buyer demand has been.”

In fact, single family homes were coming off market after 57 days in December, an 18.6 percent drop from the 70 days on market figure from December 2016. In the condo market, this figure remained flat at 46 days to off market. For additional information regarding December 2017 Greater Boston Housing statistics, including our new interactive housing market data dashboard, visit the Monthly Housing Market Reports page






Greater Boston Home Sales Soften in December Despite Rising Supply of Homes
On January 22, Congress extended the National Flood Insurance Program (NFIP) to February 8. This extension was attached to the Continuing Resolution to re-open the Federal government. This marks the fourth extension and first lapse of the NFIP since September 30, of last year. The National Association of REALTORS® (NAR) will continue working with Congress to prevent further lapses while the U.S. Senate works on its version of the 5-year reauthorization and reform measure.

“We are pleased that members of Congress were able to come together to extend short-term funding for the federal government and end the shutdown, which thankfully, will have only a minimal impact on real estate transactions,” said NAR President Elizabeth Mendenhall, in a statement released earlier this week when the government shutdown ended. “However, following this shutdown we strongly urge Congress to speed passage of legislation to reauthorize and reform the National Flood Insurance Program for a longer term and end the uncertainty of the current stopgap approach."

For more detailed information about the NFIP, visit NAR’s page here, or view FEMA’s latest guidance on the issue.
National Flood Insurance Program Extended to Feb. 8
Every three years, GBAR develops a new a strategic plan which outlines the initiatives and programming objectives we hope to accomplish in the coming years.. The last strategic plan, which among other goals, set out to deliver an effective political advocacy program, meaningful consumer outreach, effective governance and increased professional development, was adopted in 2014. We are currently seeking volunteers to participate in this year’s Strategic Planning Committee to help shape the future of GBAR.

This year’s committee will be chaired by President-Elect James Major, who will lead this effort in conjunction with approximately one dozen additional members. No prior volunteer service is required to participate in this committee. The expected time commitment is at least  two, 90-minute meetings and a 1.5-day retreat to formulate the plan.

Those interested in participating in the Strategic Planning Committee should inquire with Susan Melanson at smelanson@gbreb.com.
 
Help Create GBAR’s Next Strategic Plan
As you may know, last month President Trump signed the “Tax Cuts and Jobs Act”, which makes changes to the tax code and will affect the real estate industry and individual taxpayers. Despite this act being signed in to law, the REALTOR® association, through participation of members nationwide, made great strides to get several items and provisions removed from the bill as we fought to protect the rights for homeowners. Many of the changes reflected in the final bill were the result of the engagement of NAR and its members. The final bill includes some big successes as NAR’s efforts helped save the exclusion for capital gains on the sale of a home and preserved the like-kind exchange for real property. Many agents and brokers who earn income as independent contractors or from pass-through businesses will see a significant deduction on that business income as well. Additionally, through the efforts of REALTORS®, the mortgage interest deduction (MID) was preserved at $750,000 for new mortgages originated after December 15, 2017, instead of the proposed $500,000 MID in the House bill, and remains available for second homes despite earlier attempts to limit it ti primary residences.

NAR has issued a news brief about the Tax Cuts and Jobs Act which, among other information, highlights major provisions of the act that affect current and prospective homeowners, commercial real estate and real estate professionals. They also released this video, featuring Evan Liddiard of NAR Government Affairs and Peter Baker, a CPA with Business Planning Group, who walk through the provisions in the tax bill passed by Congress that affect you as a real estate practitioner.

For more information about this topic, be sure to visit NAR’s Tax Reform homepage.
How Tax Cuts and Jobs Act Affects Real Estate Professionals
After your buyer’s offer was verbally “accepted,” what the listing agent is telling you is that the seller currently intends on signing he Offer but until the seller signs it, it is not binding. 

In order for a contract for the sale of land in Massachusetts to be enforceable, it must comply with the statute of frauds (Massachusetts General Law (M.G.L.) Chapter 259 Section 1). The statute of frauds states that no action shall be brought upon a contract for the sale of real property unless it is in writing and signed by the party against whom enforcement is sought.  In other words, a verbally accepted offer is not binding until it is signed by the seller.  Further, the license law also contains a provision requiring all licensees give both the “buyer and seller a copy of the purchase and sale agreement.” (M.G.L. Chapter 112 Section 87AAA). Brokers are encouraged to establish office policies to ensure compliance with these rules and ensure that their client or customer doesn’t lose out on an opportunity to purchase the home of their choice.

REALTORS® also have an ethical duty regarding documentation in real estate transactions.  Article 9 of the Code of Ethics requires that “REALTORS®, for the protection of all parties, shall assure whenever possible that agreements shall be in writing, and shall be in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party upon their signing or initialing.”  This article falls under a REALTORS® obligations to clients and customers, however, compliance with the article will help ensure compliance with the law. 

In summary, if the listing agent tells you the offer was “accepted,” the buyer agent must ask if it has been signed by the sellers yet. If the listing agent says "yes", ask for a copy and the offer is enforceable. If they say "not yet" but they are getting it signed, you should not advise your buyer that it has been accepted. Until the buyer agent is informed the offer has been executed by all parties and has a copy of it, the seller may still accept another offer so you as the buyer agent are missleading your buyers by building a false expectation that they have an accepted offer.  

For more information regarding these topics authorized callers should contact the GBAR Brokerage Counseling Hotline at 617-399-7869 or email BrokerageCounselingHotLine@gbreb.com
Verbal Acceptance of an Offer is as Good as the Paper it is Written On
On December 11th, Governor Baker announced a new initiative to spur housing production and provide municipalities with tools and incentives to create new housing.  The “Housing Choice Initiative” hopes to create 135,000 new housing units by 2025.

The new initiative includes $10 million in incentives, grant money and technical assistance for cities and towns to plan for new housing production. Modeled after the Green Communities program, The Housing Choice Initiative will provide a new set of incentive-based tools for local governments.  Cities and towns that receive the Housing Choice Designation will be eligible for new financial resources, including exclusive access to new Housing Choice Capital Grants, and preferential treatment for many state grant and capital funding programs, including MassWorks, Complete Streets, MassDOT capital projects and PARC and LAND grants.  

The Housing Choice Initiative introduces new and better coordinated technical assistance for municipalities to reach housing production goals and pursue a Housing Choice Program Designation. The Department of Housing and Community Development (DHCD) will provide communities with a clear, single-entry point for coordinated technical assistance across agencies. In coordination with the Housing Choice Initiative, MassHousing will make $2 million in new technical assistance funding available, to help communities progress toward and achieve housing production goals under the state’s Chapter 40B affordable housing law.

In addition, Baker has introduced new legislation An Act to Promote Housing Choices.  The proposed legislation would allow cities and towns to adopt certain zoning best practices by a simple majority vote, rather than the current two-thirds supermajority. Massachusetts is currently one of only ten states to require a supermajority to change local zoning; all other northeastern states rezone through simple majority votes.

Zoning changes that promote best practices that would qualify for the simple majority threshold include:
Building mixed-use, multi-family, and starter homes, and adopting 40R “Smart Growth” zoning in town centers and near transit; 
Allowing the development of accessory dwelling units, or “in-law” apartments;
Granting increased density through a special permit process;
Allowing for the transfer of development rights and enacting natural resource protection zoning;
Reducing parking requirements and dimensional requirements, such as minimum lot sizes.
 
An Act to Promote Housing Choices would not mandate that cities and towns make any of these zoning changes. The legislation allows municipalities that want to rezone for housing growth to do so more easily.
 
Governor Baker Announces New Housing Production Incentives

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REALTOUR - Southern Norfolk Region (Randolph, MA)
Lantana
9:30am
 
REALTOUR - Metro West Region (Natick, MA)
Crowne Plaza
9:30am
 
REALTOUR - Eastern Middlesex Region (North Reading)
Hillview Country Club
9:30am
 
REALTOUR - Central Middlesex Region (Bedford, MA)
Double Tree
9:30am
 
REALTOUR - Metro Boston Region (Waltham, MA)
Hilton Garden Inn Boston-Waltham
9:30am