The Burden of Being a Landlord – Recent Changes in Massachusetts Law that affect Landlords.

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The Massachusetts State Sanitary Code changed in May of 2023. It now places more burden on landlords. When a residence is deemed unfit for habitation. Section 410.900(E) of the Code of Massachusetts Regulations mandates that landlords must provide suitable alternative housing if a unit is condemned.

So, as landlord or building owner, if you have a fire or severe water damage claim, the burden is on you to find housing for your displaced tenants.  

Standard Policy Coverage

Most policies are comprised of three main elements:

  1. Property Insurance: Coverage for physical damage to buildings, equipment, and contents.
  2. Liability Insurance: Protection against legal claims related to bodily injury or property damage to a third party.
  3. Business Interruption Insurance: Compensation for loss of income if business operations are halted due to a covered property loss.

Furthermore, a standard property policy only provides $750 of tenant relocation coverage per unit if the tenant was displaced by a fire loss. The recent change broadly enhances the scope of that requirement. Insurance companies are notoriously slow to react to legislative changes so it’s likely you will have an exposure.

Your Options

Your options are predicated by law and your lease/rental agreement. If you use a boilerplate lease/rental agreement, it’s time to review that agreement.  From a risk management perspective here’s what you should consider.

  1. Require tenants to carry coverage, including Loss of Use. It is short money for them.
  2. Review the termination clause of your lease. It should require your tenants to continue to pay rent for some time after a property claim.
  3. Confirm you have adequate Business Income Interruption (Loss of Rents) coverage.
    1. This ensures the cashflow of rents continues if tenants are not required to do so or refuse to do so.
    1. This will offset the cost of finding short-term lodging while your property is returned to service.
  4. Vet a relocation service beforehand, so you have a resource available when the stress to execute is highest.

In Case You Were Unaware – Other Changes to the Code

  • Mold and Moisture: The new code emphasizes the control of excess moisture to prevent mold growth. Landlords and building owners are now required to address moisture issues within 48 hours of discovering leaks or flooding.
  • Pest Inspections: Landlords must inspect properties for pests, including insects and wildlife, before every new tenancy. This inspection must be documented and made available upon request.
  • Heating Season: The heating season has been slightly shortened, now running from September 15 through May 31, though local boards of health may adjust this based on weather.
  • Kitchen Requirements: Walls above kitchen countertops must have a non-absorbent, easy-to-clean surface that extends at least 24 inches above the countertop.
  • Landlord Contact: Landlords must now monitor their contact number at least once every 12 hours and provide an alternative contact if unavailable.
  • Appliances: In addition to providing stoves and ovens, landlords must now also provide refrigerators and freezers unless a lease agreement specifies otherwise.

Final Thoughts

Given these new requirements, now is the time to review your leases, insurance coverage, and property management practices to ensure you are fully protected.

Understanding the interplay between Massachusetts’ tenant protection laws and the provisions of a Commercial Property Policy is crucial for any property owner. By ensuring compliance with  Section 410.900(E)and maintaining comprehensive coverage, landlords and building owners can protect themselves from the financial fallout of property condemnation while fulfilling their legal obligations to tenants.

Remember, the burden falls on you to provide lodging for your tenants.

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