SJC ISSUE GROUNDBREAKING RENT ESCROW RULING

Published on: September 19, 2019

The Massachusetts Supreme Court recently issued a decision involving a landlord’s ability to request use and occupancy payments while a tenant lemans in a unit during an eviction proceeding.  The court said:

The question presented in this case is whether a judge has authority to issue orders for interim use and occupancy payments during the pendency of a summary process eviction action, and, if so, the circumstances under which it is appropriate to exercise that authority. It was concluded that, following motion by a landlord, a court has statutory and equitable authority under G.L. c.111, §127F; G.L. c.239, §8A (§ 8A); G.L. c.185C, §3; and G.L. c.218, §19C, to order a tenant at sufferance to make interim use and occupancy payments during the pendency of an eviction action.  To exercise that authority, the judge, on motion by the landlord, must hold a use and occupancy hearing where the factors and circumstances described infra are considered, in particular whether the summary process action has been prolonged and whether the tenant is entitled to withhold or abate rent payments due to habitability issues that reduce the fair value of the rental premises or has other counterclaims against the landlord that may result in rent offsets.

The SJC further concluded that payment into an escrow account maintained by the court or counsel for one of the parties typically will provide sufficient protection to a landlord, but the SJC clarifies that a judge may order payments directly to a landlord if certain additional factors are present, such as where the landlord demonstrates that use and occupancy payments are necessary for the landlord to pay a mortgage on the premises or meet other pressing financial obligations. In the instant case, the SJC will vacate the judge’s order for use and occupancy payments and remand the matter for further proceedings consistent with this opinion.

For a copy of the Decision [click here].

For any questions regarding landlord/tenant matters, please contact Dillon Brown at dbrown@meeb.com.