A Massachusetts Superior Court Judge ruled that a prospective tenant of an Ashland, Massachusetts apartment complex had standing to pursue claims against the Landlord for violating the state’s security deposit and consumer protection statutes by charging the prospective tenant a non-refundable $500 application fee, which the Landlord mischaracterized as a security deposit, despite the Landlord offering the tenant $1,500 (3x the application fee charged), plus interest at the 12% statutory rate and payment of the tenant’s attorney fees.
In November 2021, Plaintiff Matthew Gutwill applied for a two-bedroom apartment at the Cirrus Apartment Complex in Ashland, which is owned by Defendant Inland Residential Real Estate Services LLC. Cirrus requested a non-refundable $500 fee with the submission of plaintiff’s application, which Gutwill paid. Gutwill ultimately decided not to rent the apartment and requested a refund of the $500 fee. The Defendant offered to send the money back to Gutwill via email. The next day, counsel for the plaintiff sent the landlord a c. 93A demand letter. Defendant then offered the plaintiff $1,500, plus interest, as well as payment of plaintiff’s attorney fees and costs.
On March 21, 2022, Plaintiff Gutwill, on behalf of himself and all similarly situated individuals, filed a civil suit against the Defendant Inland Residential Real Estate Services LLC, d/b/a Cirrus Apartments, for violating Mass. Gen. Laws chapter 186 Section 15B (the security deposit statute) and chapter 93A (the consumer protection statute).
On September 30, 2022, Defendant Inland Residential filed a motion to dismiss the complaint for lack of standing. The Defendant argued that plaintiff lacked standing because their offer of settlement made the plaintiff an improper class representative, that a per se violation of the security deposit law was insufficient to make a claim for a violation of c. 93A, and that the complaint had alleged mere negligence, which cannot serve the basis of a c. 93A claim in certain contexts.
In a February 17, 2023 decision, the Court rejected these arguments, stating that the plaintiff retained his class claims notwithstanding the Defendant’s offer of settlement, that prior holdings of the Massachusetts Appeals Court have ruled that a violation of the security deposit statute is an unfair and deceptive practice under c. 93A, and that plaintiff alleged more than just mere negligence in its complaint and Defendant’s own admissions suggest its application fee was part of a regular and intentional practice on the part of the Defendant. The Court hasn’t decided a winner or loser in the case yet but will be allowed to proceed to discovery on the merits.
If you think you may have a claim against a landlord, property owner, agent, or property management company for the return of an application fee or security deposit which was paid on the submission of an application to rent a Massachusetts apartment, please contact Attorney Joe Moen at 518-588-0316 or email him at joe@jtmoenlaw.com for a prompt consultation.
