August Notes from the Legal Hotline

Q. A prospective tenant has poor credit and offered to pay the full year’s rent up front – is that allowed?

No, rentals for 100 days or more are governed by Massachusetts General Laws Ch. 186, Sec. 15b, which prohibits a landlord from collecting any funds in excess of:

    1. First month’s rent,
    2. Last month’s rent,
    3. Security deposit not to exceed first month’s rent, and
    4. The cost to change the lock and key.

Regardless of whether the landlord requests funds in excess of these specifically enumerated amounts, or they are offered by the tenant, the collection of said funds would be a violation of the statute. Additionally, the collection of prepaid rent deprives the tenant of the ability to withhold rent which they may be legally entitled to do.

Otherwise qualified tenants may offer to hold the funds in a separate account – in their name only – and provide the landlord with proof of funds to demonstrate their ability to pay regardless of their poor credit.

Q. Is the deal automatically dead if a contingency date passes without communication from the other side of the transaction?

A. Not necessarily. If a contingency date passes, it simply means that the party can no longer use that provision of the contract to back out of the transaction without penalty. The transaction may proceed forward without the protection of the contingency.

As a best practice, buyers and buyer agents should always be certain to maintain open lines of communication with the seller and seller’s agent and request an extension if there is any question about their ability to satisfy any requirement of the purchase contract within the prescribed timeframes.

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Written by: Justin Davidson, General Counsel; Catherine Taylor, Associate Counsel; Jonathan Schreiber, Legislative & Regulatory Counsel; and Kate Berard, Associate Counsel.

Services provided through the Massachusetts Association of REALTORS® is intended for informational purposes and does not constitute legal advice, nor does it establish an attorney-client relationship. The Massachusetts Association of REALTORS®, by providing this service, assumes no actual or implied responsibility for any improper use of responses to questions through this service.  The Massachusetts Association of REALTORS® will not be legally responsible for any potential misrepresentations or errors made by providing this service. For more information regarding these topics authorized callers should contact the MAR legal hotline at 800-370-5342 or e-mail at legalhotline@marealtor.com.