Ferreira v. Charland – Another Unfortunate Court Decision for Massachusetts Landlords

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A recent housing appeals court case, Ferreira v. Charland, once again underscored the difficulty of landlording against a stacked legal deck in Massachusetts, and the importance for landlords to follow law to a tee.

Not that we really needed another reminder, but the case, which made its way to the appeals court, illustrates the legal skew toward renters’ rights. Most prominently highlighted in the appeals court decision, which overturned a lower court, is the uneven construction of MGL ch. 239 s. 8a. Simplified, the law grants tenants the right to cure legal discrepancies when they owe the landlord more than the landlord owes them, and retain contested possession. The same right is not granted to landlords.

For example, when a landlord improperly bills utilities to a tenant, resulting in a big refund owed to the renter, that renter has the right to defend for possession in an eviction. Even if a landlord seeks to cure the mistaken billing by paying the refund times three, the renter can still win. The landlord’s payment – their attempt to cure – does not grant them the right of possession of their property. The right to cure is codified only for tenants.

That single difference in rights can play out in significant ways. It can disallow a no-fault eviction, for instance, and give a tenant the contested right of possession even after they have received three-times payment from a landlord.

By way of explanation, let’s review Ferreira v. Charland to examine what happened, how it could have happened differently, and what landlords can learn from this court decision.

Overturned on Appeal

Ferreira v. Charland began in 2020 as a no-fault summary process case in Western Division housing court, heard by Justice Robert G. Fields. Cassandra Ferreira, the plaintiff, sought to regain possession of a house she owned and had been renting to Laurel Charland. Charland was a co-defendant in the case, along with her two co-tenants, Jason Charland and James Vasquez. Fields decided for the plaintiff (Ferreira) and awarded her possession of the rental unit.

The case was appealed by Charland, who was the sole defendant in the appeal.

The appeal was heard “en banc” by a panel of appeals court judges in summer 2023. In fact, this case was historic, the first case in Massachusetts history to be heard by all 25 appeals court judges.

At the urging of the attorney general, the appeals court panel overturned Judge Fields’ decision for the plaintiff, awarding possession to the defendant, tenant Laurel Charland.

The appeal decision included eight dissents. Seventeen judges decided for the defendant, overturning the housing court decision.

Summary Process Gone Sideways

Ferreira originally issued a notice to quit to her tenants in December 2020. Ferreira had once occupied the rental property, and, according to the case docket, told her tenants she needed to move back into her house. She began a no-fault summary process based on a 30-day notice to quit.

As part of the lease, the tenants had been paying for water and sewer service, among other utilities. However, important in this case, Ferreira did not install low-flow appliances as legally required in order to charge tenants for water and sewer.

In answer to the eviction action, Charland filed a counterclaim charging her landlord with a violation of the state’s water use law. She sought money damages and to retain possession of the rental.

Before the date of the court hearing, attempting to rectify the water use law breach, Ferreira, through her attorney, sent checks to both Charland and her attorney, totaling $3,615. The checks were accompanied by notes explaining that they represented reimbursement for water charges while Charland was a tenant, as well as damages stemming from the violation. The notes also mentioned that the total payment equaled “three times a month’s rent.”

No record states whether Charland cashed or deposited the checks, or stored them. (We attempted to reach Charland’s attorney, Gabriel Fonseca, listed with Community Legal Aid in Springfield, to confirm whether Charland cashed or deposited the payments. Messages were not returned.)

Correcting the Water Use Violation

In the housing court case, Ferreira had admitted her violation of the water use law. But she argued that she had made her tenant financially whole, and therefore cured the violation, by reimbursing her an amount totaling three times what was owed.

Ferreira’s attorney, Lawrence Farber, argued that the tenant’s counterclaim was no longer relevant, and should be waived. In fact, Farber contended, by the time of the hearing, there were no amounts owed to either party. Therefore, section 8a of chapter 239 was not applicable to the case.

Charland’s attorney countered that Charland never gave indication that a reimbursement payment would serve as a settlement, nor that her counterclaim for possession would be dropped in exchange for such payment.

(Once Farber realized the original summary process was flawed, due to Ferreira’s violation of the water use law, he refiled a new summary process. That action, which was put on hold pending outcome of the first summary process, was not relevant to the ultimate court decisions.)

Judge Fields agreed with Ferreira’s argument that she had cured her water use violation by virtue of her triple-damages payment to the tenant-defendant. He granted possession to the landlord, with a stay on eviction pending a date certain.

Charland appealed.

Tenants’ Right to Cure (But Not Landlords’)

The appeal focused more adamantly on MGL ch. 239, s. 8a. The statute grants a tenant the right to counterclaim for damages or to defend against possession if a landlord is shown to have violated their legal obligation as a housing provider.

Section 8a of chapter 239 protects tenants who have withheld rent due to uninhabitable living conditions in their rentals. However, a 2016 case, Meikle v. Nurse, applied a clause of the law to also protect tenants whose landlords had violated “any other law.” Citing that precedent, tenants may defend against eviction not only when a rental doesn’t meet sanitary code standards, but for any legal violation, even in an otherwise pristine rental unit. In Ferreira’s case, that pertained to the landlord’s violation of the water use law.

Notably, if the reverse is true – if a tenant fails to pay rent or commits a violation that leads to court – the tenant is granted the right to cure the violation and retain possession under section 8a. Oddly, only tenants are granted this right. Landlords have no such right to cure a violation and repossess their property.

“In this way,” notes the Ferreira v. Charland case docket, “the statute creates an incentive for landlords to comply with their obligations under the law, while providing tenants the opportunity to ‘cure,’ that is to retain possession of the premises if the landlord is made financially whole.”

Following Landlord–Tenant Laws in Mass.

Of course, landlords are always advised to comply with the law. But Massachusetts is a highly regulated state when it comes to rental housing. And if every law were straightforward and simple to understand, it might be arguable that ignorance of the law is no defense. But our laws are too often confusing and clumsily written, so that even judges sometimes have difficulty adjudicating them. Consider our state’s security deposit law, for one example, which has caught more than one well-meaning landlord in a snarl of penalties and legal fees. There is no shortage of cases in which landlords have tried to adhere to the law in providing quality housing, but have failed because of the laws’ layers of confusion.

Given the intensity of regulation in Massachusetts, it would be reasonable to include legal provisions for landlords to cure mistaken violations when they happen, for whatever reasons. Instead, as was made apparent in Ferreira v. Charland, taking your tenants to court can sometimes backfire.

Cash for keys might have been a better option for Ferreira.

Decision for the Defense

Whatever the reason for Ferreira’s failure to comply with the water use law, this landlord admitted to the mistake and attempted to set it right. In fact, the plaintiff argued, there was no amount owed to one party from the other by the time of the original summary process. Ferreira had paid Charland in excess of what was owed for the water use violation before any court events had taken place.

Charland’s appeal argued that Ferreira’s voluntary reimbursement wasn’t valid because there was no previous agreement that payment would remove Charland’s counterclaim. Also, she argued, there was no evidence or record that Charland accepted Ferreira’s payment.

Ferreira’s reimbursement payment to Charland didn’t matter in the appeal decision. A majority of the en banc appeals panel found for the defendant, awarding Charland possession of the rental. Notably, the dissent consisted of eight judges, an unusually high number. (Writing for the dissent, Judge Joseph Ditkoff emphasized dissenting judges’ confusion because the defendant admitted in housing court that no funds were owed to her. She had been refunded by the landlord before the hearing date.)

What Could Ferreira Have Done?

Ideally, Ferreira would have either installed low-flow water appliances and had the city sign off on them before charging her tenants for water and sewer use; or decided not to charge for water/sewer.

But once the water use law violation occurred, did she have better options than trying to cure in the middle of an eviction case?

If she had been able to get an agreement signed by her tenant before serving a notice to quit, stating that a three-times reimbursement would satisfy any violations, it’s possible an eviction would have held up on appeal. It appears that the appeals court cited the lack of a settlement agreement between the parties as a reason for overruling Judge Fields’ decision for the plaintiff. If Ferreira had had such an agreement in hand, it would have removed that basis for an overturned ruling.

Even if the tenant had refused to sign such a document, it would have given the landlord the choice not to make the three-times payment, and to pursue other options instead.

Perhaps most advisedly, Ferreira, or others in similar predicaments, might consider skipping court altogether and directly discussing the matter with their tenants to see if a suitable solution exists. Cash for keys, for example, might be a more optimal remedy than a summary process.

A cash for keys offer might not have sufficed in Ferreira’s case. Her tenant felt strongly enough about remaining in the rental to have pushed an appeals process, enlisting community legal services for her defense. It’s possible a cash for keys offer would not have been enough to gain her agreement to move out.

But before serving a notice to quit, many landlords should at least consider cash (or some other value) for keys, or another alternative. It could save money, in comparison with a court case, and would almost certainly save time. Once a notice to quit has been served, it establishes an adversarial wedge between landlord and tenant, even in no-fault cases, and could make court alternatives more difficult to negotiate.

The Lesson for Landlords?

The appeal decision in Ferreira v. Charland is difficult to accept. It’s another case that underscores the legal skew against landlords in Massachusetts. As a landlord, if you don’t follow the laws to the exact word, don’t count on recourse in court, it suggests. On the other hand, if you’re a tenant, and you violate your legal obligation, like not paying rent for months, a safety net is often built into the law, as it is in Ch. 239 s. 8a.

Ferreira tried to do the right thing through legal channels. She was punished for it, and is now worse off than if she didn’t go through the courts at all.

Had the appeals panel majority in Ferreira v. Charland included some kind of indication of the behavior they would have favored from the landlord, this case might provide some educational value. But no such indication was included with the decision, only a seemingly ideological decision for the defendant’s counterclaim for possession.

This leaves landlords little to go on, except to be exceedingly adamant about learning and adhering to landlord–tenant laws in this state.

It’s ironic, in a state with one of the tightest housing markets in the country, that renting should be made onerous. And it may be inevitable that legislative policies and court decisions must become more balanced toward those providing much-needed housing.

Still, despite unfortunate cases like Ferreira v. Charland, rental housing remains a worthwhile investment in much of Massachusetts. It just has to be conducted with utmost attention to our state’s laws and regulations. Before serving a notice to quit, check with an attorney to make sure your business and legal standing are sound.

Source: MassLandlords.net