Massachusetts real estate ruling limits fee structures

A federal judge recently ruled that one-time nonrefundable apartment amenity fees violate Massachusetts state law.

The court case will have widespread implications for the state's multifamily owners and industry stakeholders, according to the Boston Business Journal. District Court Judge William Young made his ruling based on the state's legal statute concerning security deposits, finding that this type of fee is not legal.

Owners and managers in the state can only charge a security deposit, first and last months' rent and a key installation fee, the judge found, a decision which could have implications for a variety of other potential fees as well as those related to amenities. Additionally, he approved the case for class action status.

Apartment owners and rental property management firms in the state may wish to review their fee and rent policies in light of this new ruling, to ensure they are in compliance with state law. Prudence in the near future could allow them to avoid potential lawsuits in the future as tenants and others learn about, come to understand and adapt to the impact this case will have.