How much can a Massachusetts landlord collect from their tenant up front?

I get this question all the time and the answer is really very clear. A Massachusetts landlord can collect amounts for only 4 different items in advance of a tenancy:

1) First month’s rent;
2) Last month’s rent (calculated at the same rate as the first month);
3) A security deposit equal to the first month’s rent; and
4) The cost of a the purchase and installation for a key and lock.

Can the landlord seek reimbursement from a tenant for the fee the landlord had to pay a broker to fill their vacancy? Absolutely not. Again, see the 4 items that may be charged above. But, before a landlord goes and takes these items from a new tenant, they need to remember that there are very specific rules for handling last month's rent and security deposits. Failure to follow them could lead to very harsh penalties, like triple damages (that's 3 times the amount of the security deposit) plus attorney's fees and court costs.

Sizing Up Short Sales: What a Debtor Needs to Know

First off, HAPPY NEW YEAR! May 2010 be good to you and yours and may you not have to consider what I'm going to blog about next - short sales.

As a real estate attorney, I've been in the fortunate position to assist clients in the successful short sale of their property in a market that has been less than kind to most of us. With the recession has come the rise in unemployment and decline of property values resulting in borrowers' inability to pay their current mortgage(s) or to refinance. Many borrowers are forced to walk away from their properties after the lender forecloses its loan. One alternative to this desperate situation is the short sale. In a short sale scenario, a borrower obtains the lender's approval to sell the property for less than what's owed on the property. The ultimate goal for the borrower is for the lender to forgive the debt that remains outstanding after the property is finally sold. This varies from a foreclosure sale after which a debtor is still technically responsible for any deficiency amount. Short sales sound simple, but they're all about timing. Typically, a borrower must be in default of their loan before a lender will even consider approving a short sale. Lenders are also only willing to lose 20 to 25% on the transaction including broker's commissions and other fees incurred to close the transaction. So, the numbers really have to be just right for the transaction to work. A debtor should be actively marketing the property for sale and only a legitimate offer to purchase the property will put the brakes on the foreclosure process. In order for a short sale to succeed, the cooperation of all the parties, including the buyer, seller and their agents, is required. A prospective buyer must know that the lender's approval of the transaction won't be immediate. A significant amount of paperwork will need to be submitted by the debtor and the status of all liens, including those for utilities and property taxes, will need to be obtained and provided to the lender. The debtor's attorney will have to prepare a HUD-1 settlement statement showing all of the debtor's anticipated transaction-related costs, including lien payoffs, brokers' commissions, attorney fees, etc. This will also be submitted to the lender. The HUD-1 should show no proceeds coming from the sale going to the debtor/seller and in a best case scenario, no funds being brought top the closing table from the debtor/seller. This means that the lender actually absorbs the expenses of the debtor/seller such as brokers' commissions and legal fees, etc. Therefore, a short sale can be very appealing to a debtor