EDWIN J. SHANAHAN
‘Improved’ position

Bay State Realtors are optimistic that they’re making progress on several legislative initiatives that they back – including bills that would force tenants to continue paying rent into an escrow account during tenant-landlord disputes and have them pay for water usage.

Realtors and property owners stepped up their efforts on the measures, packing a basement hearing room at the State House last Wednesday, to urge lawmakers to eliminate what they call the “free-rent trick.” They are supporting a bill that would require tenants to pay rent into an escrow account during disputes over violations of the state’s sanitary health code.

“I don’t think we’re under any delusion that it’s [rent escrowing] a bill that’s going to be addressed over the next couple of weeks,” said Edwin J. Shanahan, chief executive officer of the Greater Boston Real Estate Board, explaining that lawmakers currently are grappling with the budget.

Rent escrowing is a perennial issue for property owners, who have unsuccessfully lobbied for such a law for several years. However, Realtors are buoyed by the fact that during the last legislative session, the House and Senate passed separate versions of a rent escrow bill, even though the measures died.

“Both branch-
es have acknowledged the absence of a mandatory rent escrow provision is a problem that needs legislative redress. That’s significant,” said Shanahan. “Our chances are greatly improved that we will have mandatory rent escrowing passed by the end of this legislative session,” which ends in 2004, he said.

GBREB’s Rental Housing Association and property owners are also pursing a law that would allow property owners to install separate water meters for residential units to charge tenants for the water they use.

On the same day as the hearing, some 300 Bay State real estate agents fanned throughout the State House to promote other measures on their legislative agenda – including opposition to a local real estate property transfer tax proposal and uniform septic system regulations – as part of the annual lobbying day organized by the Massachusetts Association of Realtors (Story on Page 2).

At the Joint Committee on Housing and Urban Development hearing, several landlords, including members of the Small Property Owners Association, shared stories about tenants who have fabricated health code violations in order to escape paying rent. The Judiciary Committee heard testimony on similar rent escrow bills last Thursday.

Supporters argue that tenants are using a loophole in a law that allows them to withhold rent for legitimate safety and health issues that arise from neglected maintenance to swindle Bay State landlords out of thousands of dollars in rent and legal fees that they rack up to fight tenants in court.

Real estate leaders contend that, under the proposed bills, tenants would retain the right to withhold rent from landlords who don’t address serious property maintenance issues, but would have to save the rent in an account. That would discourage renters from manipulating the legal process, they said.

“This bill does not represent the diminution of any tenants’ rights,” said Shanahan. “They [tenants] would not be forfeiting their rights.”

But tenant advocates disagree, saying the five separate bills that have been filed in the Senate and House would water down laws created to protect tenants from unscrupulous landlords who neglect property repairs. The bills would violate tenants’ rights, forcing them to “pay for their day in court,” they say.

“These bills are unnecessary, unjust and probably unconstitutional,” said Ellen Shachter, an attorney with Cambridge and Somerville Legal Services, in testimony provided to the committee.

Shachter also took issue with a provision in the bills that would require tenants to provide written notice of health code violations to landlords before an eviction. The measure is intended to protect property owners, some of whom claim they don’t hear about maintenance problems until after they initiate the eviction process.

But Shachter said such a requirement would hurt the most vulnerable tenants – particularly immigrants who don’t understand their rights.

“The notice requirements would bar about 90 percent of our clients from presenting a defense based on bad conditions,” she said. “The vast majority of tenants are unaware of the landlord/tenant laws until they speak to an attorney or advocate.”

Several advocates and lawmakers also said the bills aren’t necessary because rent escrowing is already allowed. Landlords can ask judges to set up escrow accounts during disputes so that a tenant can continue paying rent, but some landlords said judges have been reluctant to do so in the past.

One landlord suggested that judges won’t set up escrow account for fear that such decisions would be appealed and overturned.

But Rep. Paul C. Demakis, D-Boston, a member of the Housing Committee, asked for proof to back up that claim. He said he feared that the bill, if passed, would be taking away the “discretion” of judges and courts to decide whether the rent should be placed in escrow.

Cost and Conservation

In addition to rent escrow, water sub-metering was also high on Realtors’ agendas last week. In Massachusetts, property owners pay one water bill and are not allowed to charge each tenant for the water they use because metering isn’t allowed.

Property owners maintain that water metering, which they say is allowed in every other state, would force tenants to report leaks to landlords faster and encourage them to conserve water since they would be the ones responsible for paying the bill.

“This is the only state does not allow the end-user to pay for water,” said Shanahan.

Yet Demakis appeared skeptical about property owners’ claim that the water-metering measures would encourage water conservation.

Demakis and some tenant advocates questioned why environmentalists and conservationists weren’t testifying in support of the bill if it really was a conservation issue. And they also wondered whether the measure would create a “financial disincentive” for property owners who are now employing water-conserving measures, such as installing low water-flow showerheads.

“Even if some water conservation did occur … that would forgo significant other measures that landlords could take” to conserve water, said Margaret Monsell, an attorney with the Massachusetts Law Reform Institute.

“[This] is shifting the cost from the people who are most able to conserve water to the people can least afford to conserve water,” added Barbara Zimbel, of Greater Boston Legal Services.

Aglaia Pikounis may be reached at apikounis@thewarrengroup.com.