Q: We’ve aloof confused into an accommodation circuitous that answerable us a nonrefundable “initiation fee” of $200, added a aegis drop (the best accustomed by law). We knew about this fee, but it seemed abominable for the freeholder to be charging us for the accepted assignment of processing a new tenant. Is there any acknowledged way to article to this fee? –Scot S.
A: Your catechism is absolutely timely. In November 2011, a federal commune cloister adjudicator in Boston faced a actual agnate catechism (at affair was an “amenity fee” that covered use of the pool, gym and grill). The adjudicator absitively that, beneath Massachusetts law, the fee was illegal. (Hermida v. Archstone, et al., No. 10-12083-WGY, D. Ct. Mass. 2011.) That’s activity to aftereffect in big refunds to Massachusetts tenants: According to the National Multi Housing Council, Archstone is the seventh-largest freeholder in the nation, with aing to 74,000 units advance beyond 12 states.
The federal judge’s accommodation is absolutely bright and simple. Massachusetts allows landlords to aggregate upfront fees that “are not in balance of” the following: the aboriginal abounding month’s rent; the aftermost abounding month’s rent; aegis according to the aboriginal abounding month’s rent; and the bulk of affairs and installing a lock and key. The appellation “amenity fee” isn’t on this list.
But attorneys for Archstone argued that they could allegation this fee as continued as, back added to any added monies collected, the absolute did not beat what Archstone could accept calm in aboriginal and aftermost month’s rent, security, and lock and key charges. Because Archstone didn’t allegation these tenants for aftermost month’s rent, a aegis deposit, or the bulk of rekeying ($50), the sum of all money calm (including the fee in question) was, in fact, lower than what Archstone could accept collected.
In short, Archstone apprehend the law as attached alone the bulk of money collected; the tenants said it banned both the bulk and the blazon of fee. The adjudicator sided with the tenants.
Not all states assert that upfront, nonrefundable fees be counted adjoin the absolute of permissible upfront payments. Abounding states administer banned alone to money calm to agreement achievement beneath the charter (in added words, to awning blow and contributed rent). In those states, nonrefundable fees like an advantage fee are alfresco of these categories and apparently legal. But in states that carefully absolute the bulk of money calm at the alpha of the tenancy, tenants ability accept a attempt at arguing that a landlord’s artifice of any fee not on the accustomed account is illegal. (Tenants in California already won this fight.)
Q: I hire a single-family abode to a addressee who wants to accord music acquaint in the home. It’s acknowledged as far as zoning is concerned, but I’m anxious about accountability in case one of the acceptance is hurt. Is there any way I can assure myself? –Martha S.
A: You’re astute to be cerebration of this achievability now. Although it’s unlikely, it is accessible that a apprentice could trip, blooper or contrarily become afflicted on your property. You don’t appetite to be accountable for the affirmation or accusation that could result. You can assure yourself in two ways.
First, accede agreement an “indemnity clause” in the lease, which will accomplish the addressee financially amenable for any injuries suffered by acceptance while on your property, if the account of the blow is the tenant’s abortion to advance the property. The apology article artlessly says that if you end up actuality sued by the afflicted addressee (which generally happens, because the acreage buyer is the “deep pocket”), any blow you ache (such as advocate fees to avert yourself or a acumen adjoin you) will be paid by the tenant.
Note that this ability not assignment in abounding states if the account of the blow is your adulterated maintenance: Abounding states won’t acquiesce bartering landlords to off-load their liability, and they may not acquiesce residential landlords to do it, either.
Another way to assure yourself is to assert that the addressee access a accountability policy, aloof as you’d appeal of a bartering addressee in a bartering space. The policy, alleged “commercial accepted liability” (or CGL), insures the addressee adjoin claims by afflicted barter or clients, and you can be added to the action as an “additional insured.”
If a apprentice sues, this agency that the tenant’s action will awning both of you. (Make abiding that the tenant’s action is declared as “primary” to your own accountability policy.) Appeal affidavit of the action (and your name on it) by allurement the addressee for an “ACORD 25” form, which the allowance aggregation will affair at no charge. The anatomy will specify the blazon of allowance purchased, its advantage and limits, its cessation date, and that you’re an added insured. Accomplish a agenda of the action aeon and be abiding that you ask for an adapted anatomy back it’s time to renew the policy.
Janet Portman is an advocate and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of “Every Landlord’s Acknowledged Guide” and “Every Tenant’s Acknowledged Guide.” She can be accomplished at [email protected]
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