A few months ago I had a lady apply for an apartment I had for rent. I made it clear that I would collect a security deposit prior to move in, she said that would be no problem (she was also a subsidized tenant). I did the background check, there was a rental gap but no other red flags I saw (aside her getting offended when I asked about the gap). Afterwards, she informed me that the security deposit would not come from her, but from a 3rd party agency. Talking to this agency, it became clear that tenant has nothing to do with the deposit (it's not her money, and she would not be the one getting it back).
Given my previous eviction in the same unit and damages exceeding $10,000 I said that I was not comfortable with that because the only purpose a security deposit serves in MA is to align the tenant's interest with that of the landlord, since 1-month's rent deposit doesn't even begin to cover actual damages from tenant retaliation in case of eviction. I mentioned this to the tenant (via email) and provided a link to a website explaining the very same concept (that the deposit serves as an incentive to treat the place well). As a result of not being able to provide the deposit from her own funds, I asked that the she have a co-signer.
She became furious, withdrew the application, called me twice to berate me (first time I spoke to her, but after she began threatening me I did not pick up the second time). She then left me an angry voicemail, and several text messages accusing me of running a phishing operation (because why else would I ask for her personal information on the application). She then followed up sending 2 angry emails (all within a span of about 30 mins), which I ignored. In the final email, she threatened to report me.
A few weeks later I got a letter from Massachusetts Commission Against Discrimination (MCAD) stating that she filed a complaint with them and asking for a response. I explained the situation in a response letter, and they scheduled a "settlement meeting" prior to their initial investigation. I said I wouldn't be able to attend because of a business trip (which is true), but I also said that I was not interested in what is effectively government-facilitated extortion. They said they would begin investigation without the meeting.
Yesterday I received another letter by their clerk claiming Probable Cause. The letter showed lack of actual research, and several of their claims were wrong. For example, they claimed that I tried to mistreat the deposit by refusing to put it in an escrow account and that I tried to collect last month's rent. The clerk also stated that asking for a co-signer was intended to create a an insurmountable burden for the subsidized tenant (which I don't understand). Now I'm in a position where I not only have to disprove false allegations by a retaliating applicant but by what was claimed as facts by a clerk who failed to do her due diligence. She scheduled a reconciliation meeting for May 1.
I also did not bring up any information about my existing tenants to the agency, because it did not seem relevant and I figured it would be a quick case where reason would prevail. The building is a triplex, with 1 market tenant and 2 subsidized tenants (a subsidized tenant moved into the very same unit this lady was applying for). I have security deposits for 2 of the 3 tenants (1 was grandfathered in before I bought the house) in separate escrow accounts as required by law. The claim that I would be treating this particular applicant any differentl, or discriminate against her on the basis of her being subsidized while allowing other subsidized tenants in is ridiculous. I feel like this is Salem Witch Trials all over again. The anti-discrimination laws were meant to protect, not to retaliate. Now they have become legal landmines and are being used as a weapon. Please advise me on what I should do.
1 Answer from Attorneys
It is possible this whole situation could have been avoided. I'm not saying you did anything wrong, but this may be turning into something larger than it needed to be. You told her you were turning down because of where her security deposit was coming from, and that was probably an unforced error. Don't assume this will go away or that you will prevail. Perhaps hire a lawyer and review your intake procedures to avoid a situation like this in the first place. I'm sympathetic, truly, but if you are going to be in the business of property rental you may need to get some professional help or brush up on best practices.