Vetstein Law Group: Can Massachusetts Landlords Legally Require That Tenants Buy Renter’s Insurance?

Vetstein Law Group: Can Massachusetts Landlords Legally Require That Tenants Buy Renter’s Insurance?

By Richard D. Vetstein, ESQ

Renter's Insurance Policy Raises Questions

I've recently become aware that some Massachusetts landlords are requiring that tenants procure their own policy of renter's insurance as a condition of leasing. In fact, MSN Real Estate did a nice write up about the practice here. But I am also hearing about a dark side to this practice where some landlords have a kickback arrangement with the insurance provider where the landlord receives compensation for any policy taken out by a tenant.

Renter's insurance is almost always a good idea, but under Massachusetts law, can a landlord require that a tenant get a policy (if the tenant doesn't want one) and must it disclose a referral relationship with the insurance provider?

Landlords Should Be Careful About Renter's Insurance Requirement

The law is unclear on this type of policy, and there's been no specific case on the practice. However, in light of the recent Hermida v. Archstone class action ruling, which found that amenity fees are illegal under the Massachusetts security deposit statute, I would advise landlords to be very careful about what and how much they charge tenants at the inception of leases, over and above the standard rent deposits and new key fee. At the very least, renter's insurance should beoptional, and any affiliate or kickback arrangement should be fully disclosed to the tenant.

Renter's Insurance Still Smart Choice

That said, I always recommend that tenants get their own renter's insurance policy. It's fairly inexpensive and provides protection to your personal belongings. Massachusetts law does provide for a minimum of $750 per unit for tenant relocation assistance due to fire displacement. However, that is not nearly enough for the average renter.

Has your landlord required that you purchase renter's insurance? Have they disclosed any referral relationship? I'd like to hear from you. The practice may well be illegal.

View more from The Massachusetts Real Estate Law Blog

 

 Mr. Vetstein has represented clients in hundreds of lawsuits and disputes involving business, real estate, construction, condominium, zoning, environmental, banking and financial services, employment, and personal injury law.

In real estate matters, Mr. Vetstein handles residential and commercial transactions and closings. In land use, zoning, and licensing matters, Mr. Vetstein offers his clients an inside perspective as a former board member of the Sudbury Zoning Board of Appeals. Mr. Vetstein has an active real estate litigation practice, and was a former outside claims counsel for a national title company.

Drawing on his own business degree and experience, Mr. Vetstein assists his business clients with new business start ups, acquisitions, sales, contract, employment issues, trademarks, and succession planning. Mr. Vetstein also litigates, arbitrates and mediates a wide variety of commercial disputes.

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