“Don’t call here,” Lucy almost shouted into the phone. “We don’t own that store any more. We lost everything. I’m not giving anything.” And she hung up.
     “Every day I get a call,” she said.
     We sat in Lucy Panian’s immaculate kitchen on the second floor of their two-family house in Waltham, Massachusetts. The apartment below was empty. Two months ago, the tenants who forced her and her husband into bankruptcy had finally moved out.
     For two and a half years, those tenants were enemies in her own home, driving Lucy through endless days of worry and tears, though endless, sleepless nights.

The nightmare starts
     Lucy and her husband have owned the house for 12 years. They had had a number of tenants. One family didn’t pay for three months, but they survived. This would be different.
     Lucy’s fellow volunteer Pat from a local help-the-poor agency came to her with tenants who needed housing urgently.
     “But it’s not ready yet,” Lucy said. Paint equipment and her daughter’s “stuff” were still in the apartment. It would be ready August 1, Lucy said. This was mid-July.
     “But it’s better than my in-laws’ basement,” the tenant said, and he asked to stay “for one night.” Lucy agreed.
     The next day, Lucy saw a truck out front and furniture being moved in.
     “What’s going on?” she asked. “The apartment’s not ready.”
     “Don’t worry,” said the tenant. “I’ll finish the painting.”
     Lucy didn’t like it and went to Pat. Pat got the local agency to pay $800 to Lucy for the tenants’ last month’s rent. After two weeks of free rent in July, the tenants paid just $400 on August 1. They didn’t pay the remaining $400 for August until the end of the month. Pat wrote on a piece of paper a tenancy agreement calling for three months’ probation, to see if the tenants could work out their financial problems. They all signed it.
     The tenants did pay — for three months. During that time, the tenant-wife gave birth to their fourth child. Lucy gave her a present. And then, after the three months were over, Lucy saw the tenant in the supermarket and said “hello.” The tenant stiffly turned a cold shoulder. Something had changed.
     From this point on, Lucy’s tenants began a pattern of seldom paying the full rent, claiming deductions for things wrong with the apartment. They were using a loophole in Massachusetts law that allows tenants to block eviction by turning unpaid rent into “withheld rent” for supposed defects in their apartment. By the time these tenants are finally evicted, small owners can go bankrupt.
     Their first deduction was for mice. In 16 years, Lucy had never had mice, and the tenants never told her directly. Instead, Lucy got a letter from the health department. There were mice, the letter said, and three other minor violations — one “a draft under the front door.”
     Lucy offered immediately to exterminate. The tenant objected. She didn’t want poison. After some discussion, they agreed on a different extermination. It cost $120. The day after the extermination, the tenant told Lucy she was not satisfied, and Lucy ordered a second round of extermination. Another $110. Total cost to Lucy — $230.
     Next month’s complaint was about the broiler on the stove. Lucy’s daughter, who had just moved out of the apartment, had had no problem with it, but Lucy said she would call the repairman. Lucy paid an appliance company $150 for the repair. Two days later, the stove was “not working again.” So Lucy bought a new stove for $400.
     Lucy knew her tenants were having trouble paying the rent and finding excuses not to pay. So Lucy gave them an eviction notice in February 1996 for nonpayment of rent and to take the apartment back for her own son.
     Soon Lucy received a letter from a “student attorney” at the Boston College Legal Assistance Bureau, part of Greater Boston Legal Services, saying that the tenants had informed Lucy about their stove’s “deficiency” way back in July when they moved in. The letter warned Lucy that her tenants “had a right to withhold rent from you until repairs were complete.” That’s the loophole in the law that allows tenants to “find” defects in an apartment and never pay rent while the owners go bankrupt.
     From this point forward, Lucy’s tenants would have free legal advice from Boston College on how to play the “free rent” game under Massachusetts law. Eviction would always be called “retaliation” for her tenants’ “just” complaints.
     At first, Lucy’s tenants said, “We’re gonna move.” But then they said they couldn’t find an apartment. Lucy knew why. No one would rent to them. They had played these same tricks on other landlords. The Waltham Health Department told Lucy: “They have done this before. We know how she is. We don’t want to see them any more. We want them out of Waltham.”
     The tenants stayed on, complaining and never paying the full rent.
     But Lucy was not vindictive. Seeing they now had a car, she wrote them a note saying: “There is a parking space for you for free. Please use it.” Lucy kept a copy of the note. But the tenants would not use the parking space. They parked on the street. And then deducted another chunk of rent, complaining they had been denied an off-street parking space.
     Four months later, Lucy gave her tenants another eviction notice. The tenants’ response? Call in a lead inspection company. Lucy had deleaded the apartment in 1987, to qualify for a section 8 tenant. The scrape marks on the door and window frames were obvious. But the inspection company noted that the scrape marks only went up to 4 feet 11 inches. The official requirement is 5 feet. What had happened? Wall-to-wall carpeting with a pad under it had lifted the floor level one inch.
     Would Lucy have to re-delead her apartment over that one inch? The district attorney in the eviction trial said there was no lead violation. So the tenants called in an inspector from the state’s lead agency. After looking at the apartment, the state inspector said to Lucy: “I understand. These are all excuses (to not pay the rent). But there is nothing we can do. We are with the state.” Yes, Lucy would have to re-delead. It cost her $3,200, plus $500 for the inspection.
     Lucy would also have to pay to house her tenants elsewhere during the hazardous deleading. Lucy paid $352.34 for two nights that her tenants spent at the Home Suites Inn in Waltham, including half a dozen phone calls. Then her tenants demanded to stay in the presidential suite at the Double Tree Guest Suite. That cost Lucy $320.15 for one more night. Total cost: $679.24, almost a whole month’s rent. While Lucy wasn’t getting any rent at all.
     Lucy’s tenants had not paid rent for seven months, and she was in serious financial trouble.
     Talking in her kitchen about her bankruptcy, Lucy pulled out a white plastic bag full of envelopes neatly rubber-banded in stacks and papers stuffed in large envelopes.
     “Everything was an excuse not to pay rent,” Lucy said. And it didn’t need to be a good excuse. Remember the parking space? The judge ruled that failure to provide a parking space was not a valid claim to rent reduction. There were many invalid claims. But it was too late for Lucy.
     Lucy lost $4,000 in unpaid rent. And was forced to spend $5,230 on repairs. This added up to a net loss of $10,000 for Lucy. At the very same time that they were not paying rent, Lucy’s tenants forced her to spend heavily. The lethal combination of unpaid rent and expensive repairs sank her and her husband.
     Lucy and her husband had barely enough money for food and fuel, and not enough for her mortgage. Nevertheless, Lucy was shocked when one day, without warning, a foreclosure and auction notice on her home appeared in the local newspaper.
     Suddenly, Lucy realized she could become homeless. She cried constantly, thinking “I know we are going to lose everything.” She could not sleep. When people called, she would tell them desperately: “Don’t call, don’t ask, don’t talk to me, change the subject, I’m going through hell, I’m waiting for the justice to come.”
     “There is no justice,” a law professor had told their son, who gave up his goal of being a lawyer after his parents’ experience.
     Lucy and her husband had to cut their spending to the bone. “Some days I didn’t have food on my table,” she explained, “and my tenants were bringing free food home from the Salvation Army. With food stamps, they were buying ice cream and chocolate. I just could barely get basic food. There were days when there wasn’t a penny in my purse.”
     Lucy got fuel assistance for one year, but was turned down for food stamps, because “the house was an asset.” (An asset? With nonpaying and demanding tenants?) When the bank attorney came to look at the house for foreclosure, he told Lucy: “I know it’s very bad. I’ve been a landlord, too. Why don’t you file for a Chapter 13 bankruptcy? That’s the only thing you can do now.”
     Lucy now had to get an attorney. “I was calling many attorneys from the Yellow Pages, and they all wanted money.” Finally, an attorney came along who didn’t ask for money up front. He put his bill into the bankruptcy claim, which meant he might not get paid at all. “It’s like God sent an angel to me,” Lucy said.
     So Lucy and her husband filed for bankruptcy. They had to sell his jewelry store to save their home. But it was devastating. They lost their principal source of income. Lucy’s husband had to commute to New Hampshire or New Bedford daily, now as an employee. That lasted for less than a year. He got laid off this past January and has been searching for work ever since. At age 55, he is in one of the most difficult positions to find work or start a new career.
     Lucy had gone bankrupt - and still no rent. By December 1997, after two and a half years of continuous problems, the tenants were $3,971 behind in their rent. After yet another eviction notice, a judge finally ordered them to leave on December 31.
     On December 31, Lucy waited painfully for her tenants from hell to leave. Finally, at 2:30 a.m. on January 8, 1998, Lucy’s son saw two little children and their father carrying things out of the house, not in boxes but one by one, to a van.
     But Lucy was afraid to enter the apartment. She waited another week. And then her bankruptcy attorney called the Boston College Legal Assistance program and asked them to allow the owner to open the door. Their attorney finally called them back and said: “Go in, the keys are on the counter.”
     The tenants still owe Lucy $3,971. But Lucy will never get that money. The tenants cannot be found. The car plate is the same, but it’s registered under a different name. They left no forwarding address and pick up their mail at the post office instead. The Boston College Legal Assistance Bureau does know where they live, but won’t tell Lucy.

What Lucy’s lawyer said:
     “The tenants badly abused the system. They had a myriad of complaints. They figured, ’We don’t have any money, we’ve got to make things up.’ The lies were just beautiful to listen to.”
     “The biggest joke of the case was the eviction. The tenants were ordered to pay the rent, and they kept not doing it. The court would keep giving them another chance. Finally, the court ordered them to pay in three days. They did. Then they’d deduct it again unilaterally the following month and claim some phantom new violation.”
     “The free student attorneys for the tenants filed motion after motion regardless of merit or veracity, I guess to learn about litigation. That doesn’t happen with regular attorneys.”

Bankruptcy lawyers on tenants
bankrupting owners

A Crisis in Our Housing
      When tenants can’t pay their rent, they often don’t turn to social help agencies. They turn to free lawyers who tell them how to attack their landlords and use the laws to extort free rent.The social cost: bankrupt small owners and abandoned housing.
      The loophole: Turning housing code violations into free rent
      The loophole is right where two laws meet — eviction and rent withholding.
      It’s simple. Tenants who can’t pay the rent and face eviction call in the health inspector, get the apartment cited for a myriad of trivial code violations, and then claim they are not “not paying” the rent — they’re “withholding” the rent because of code violations.
      The law says a tenant cannot be evicted for “withholding” rent. So tenants under financial stress can easily delay eviction, even stop it altogether, by sabotaging repair of the violations. Change the locks so the landlord can’t get in unless the tenant is home. Then don’t return calls. Insist on 24-hour written notice before the landlord can get in to make repairs. Say appointments are “not convenient.” Don’t keep appointments. Obviously, this can go on and on.
      Once the landlord has finally gotten in to correct the violations, all is not lost. Tenants can make it hard for the inspector to get back in to document that the violations are corrected. And, even worse, they can undo some of the repairs before reinspection or deliberately damage and create new violations.
      The law does not prevent this abuse. In fact, it actually encourages it, because each code violation entitles the tenant to a rebate or reduction in rent — depending on how bad the violation is and how long it existed. The tenant’s unpaid rent can be partially or completely wiped out. This, of course, adds further incentive to delay repairs and damage property.
      This abuse is unethical and fraudulent, pitting tenants in financial trouble against innocent owners and perverting the purpose of health inspections.
      Small owners are devastated by this abuse, deprived of all income from a unit exactly when their expenses go up sharply.
      Whenever tenants abuse owners with this legal loophole, it strikes small owners terribly hard. Small owners have few reserves, almost no financial elasticity. One non-paying tenant is a huge chunk of their income. Month after month of no rent — extorted unfairly — combined with burdensome, often totally unnecessary and trivial repairs plus extensive litigation costs add up to a lethal combination.
      Small owners are severely emotionally traumatized when their hard-earned assets are suddenly jeopardized. Some go into bankruptcy and lose their properties, some lose the very homes they live in.
      Because this tenant abuse forces banks to foreclose on properties, the Massachusetts Bankers Association has already told us informally that they would cooperate with rent escrowing accounts in their banks — precisely as a measure to control this tenant abuse.
      Who gets hurt most? Small owners. And poor tenants.
      In poorer neighborhoods, tenants are poor and owners cannot charge high rents. Yet the cost to maintain housing is the same. Precisely here, the tenant abuse we are fighting can break a property owner and push housing into abandonment. Everyone loses — tenant, owner and the community.
      National housing specialist Cushing Dolbeare underscored how vulnerable this housing is at a recent conference in Springfield, Massachusetts. “There is no way,” Dolbeare said, “that an owner of marginal and distressed housing can bring that housing up to code if tenants are poor.” Dolbeare chairs a federal task force on lead hazards in housing.
      “I’ve seen a lot of abandoned housing on my trips,” Dolbeare pointed out, “and the stock was pretty darn good when it was abandoned.” Dolbeare’s comments applied, she said, to as much as one-third of all rental housing, which is classified as either severely or moderately distressed.
      Massachusetts Senator John O’Brien declared at a hearing on rent escrowing last year: “The landlord-tenant laws in this state are destroying the housing in my city.” He was referring, no doubt, to the legal-loophole effect of no rent coming in and crushing repair expenses at the same time.
      Present law punishes property owners for having code-imperfect housing by taking away the very thing they absolutely need to maintain that housing the rent money!
      The only way property owners can protect themselves from this legal abuse is to gentrify their properties and raise rents. But this is possible only in high-end neighborhoods. Meanwhile, the abuse loophole in present law just pushes private “affordable” housing into distress and abandonment.
      Turning litigation into mediation
      Some tenants do need help . Will stopping the abuse that bankrupts small owners, damages property and causes abandoned housing leave truly needy tenants without a safety net? Not at all. In fact, a lot more can be done to help these people than is done now.
      An extensive network already exists to help tenants: local legal aid agencies. Tenants do not use legal loopholes on their own. Almost all tenants who use the delay-and-obstruct strategy with code violations are, in fact, coached by these publicly funded attorneys.
      The safety network exists right now. But it needs to be turned away from destructive litigation towards constructive mediation. A proper rent escrowing bill would automatically change the priorities of legal aid agencies toward mediation. But in addition, a mediate-before-litigate requirement can be added to the law. State funding of legal services can be restricted to mediation use.
      The way of mediation
      Mediation in landlord-tenant relations is not a new idea. Public housing projects, where low-income tenants are prone to financial instability, have started introducing mediation programs. Private owners and their tenants have been served for years by the successful programs such as Mediation for Results at Cambridge’s nonprofit Just-A-Start Corporation.
      Instead of destructive litigation, tenants get their evictions stopped, a payment agreement is typically worked out, and owners often avoid the cost and unpleasantness of eviction proceedings. It’s a win-win solution.
      Ending wasted government resources
      Behind every tenant abuse of this loophole is a trail of wasted government resources and money.
      Litigation involves high-cost attorneys in time-consuming work. In contrast, mediation is faster and can be handled by less costly paralegals and non-attorneys. The cost-savings of mediation means that local legal services agencies with the same budgets could serve many more tenants.
      Litigation also wastes other public resources. Local health inspectors get dragged into unnecessary inspections and call-backs. The courts also get dragged into sorting out the proliferation of fraudulent claims. Mediation would reduce the demand on these officials and allow the resources they represent to be directed to more productive uses.
      Mediation is the way of the future.

Another small owner going under

This single older woman was denied food stamps and fuel assistance. She was finally given food by a private charity — St. Vincent de Paul Food Pantry — which also paid her long distance phone bill and her fuel bill. As we go to press, this woman is facing foreclosure and homelessness because, with months of no rent from her tenant, she has not been able to pay her mortgage. The following are excerpts from a letter she sent to us.

From Bankrupt on Cape Cod:

      Legal aid has empowered my non-rent-paying tenant to threaten me with arrest and fines in my effort to be paid my monthly rent.
      My one and only agenda is to collect rent for property given. No where did I agree to have a total stranger manipulate my life, deny me my income, and reduce me to a street person.
      I have no funds. Creditors and collection agencies call daily with threats and further harassment. I have to screen my calls. I go to my neighbors for essentials. My long distance service has been suspended, denying me my ability to generate income.
      My well-kept cottage is my only income producing asset. My credit is destroyed.
      I’ve sent baked goods to this tenant. I’ve made holiday wreaths to give to my tenant that I was selling to buy holiday gifts.
      I have been forced to put my home, my children’s legacy, up for sale as I now am in default, unable to meet my monthly expenses.
      Has anyone addressed the archaic law that lets this happen? Everyone I’ve approached agrees the law is outrageous. Tenants can always run to legal aid to arm them with enough ammunition to gain control of the landlord’s property. YUP, that’s the way the system works, folks.
      The state allows tenants to rule and intimidate landlords who have given them lovely, clean and safe surroundings to live in, while the landlord goes belly up and cannot even get food stamps because that agency declares “the property is an asset” while legal aid and the courts deny the landlord the very income needed to survive, as in my particular case.
      For four months I have been following the doctrine of sacrifice and suffering. Guess I missed the clause in the lease where it dictates that in the case of a tenant blatantly responsible for cruel and abusive treatment toward a landlord, that tenant shall prevail and reign supreme.
      There is something radically wrong with this “INJUSTICE SYSTEM” running rampant. What ’educated’ group proposed this bizarre law that forces property owners to be threatened with utility shut-off, along with other unbelievable issues directly resulting from not being paid income to have the basic necessities of life?!
      How long am I supposed to endure this cruelty and abuse? I’ve become physically and emotionally distraught and totally debt-ridden, help is non-existent. I am formerly a peaceful, life-loving individual, now embittered, totally frustrated and about to snap. Thanks to this state, I now qualify for a [welfare] benefit to restore my life to the standard that I worked 40 years to achieve.
      “This tenant rights law needs serious re-vamping . . . in this lifetime!”

Tenant petition flops
Official count: 19 signatures

      Support could have been expected for the recent initiative petition in Massachusetts to establish “just cause” eviction and court-administered rent control across the state. After all, rent control’s demise four years ago here might have spurred a grassroots tenant reaction. And all the “crisis” stories about evictions and rent increases in the Boston area media suggested discontent.
      But it didn’t happen. The Secretary of State’s office received exactly 19 certified signatures on the petition.
      To be fair, more signatures were certified locally than made it to the state level. But not a whole lot more. Cambridge, where the petition originated among tenant activists, certified 299 signatures. Boston certified 40. Brookline certified 0 (zero). These are the three Massachusetts cities that lost rent control four years ago.
      Said a Boston election clerk: “It was way less than all the other petitions” trying for the 1998 statewide ballot.
      A pro-tenant petition two years ago to bring back rent control by referendum actually got more signatures (under 2,000).
      Paid activists are all they got
      The tenant petition’s dismal flop suggests very little interest — even in the tenant hotbed city of Cambridge — in stiffening eviction protections. If evictions and rent increases are indeed so rampant and outrageous, many more people would have flocked to sign the petition against it all. Even with the end of rent control to capitalize on, there is no grassroots tenant movement.
      What makes up the “tenant movement” today and generates all the pro-tenant coverage in the media is simply government-paid activists and legal services advocates who have the time and resources to lobby the media. The Boston Globe, the Cambridge Chronicle and the Cambridge TAB, for example, gave generous coverage to the latest petition’s first announcement, but reported nothing about the failed outcome. The Globe reported the fate of other initiative petitions, but no mention of the tenant one.
      Instead, the Cambridge Chronicle in mid-December printed two front-page stories and a photo all based on a single manufactured event, a “rally against Real Estate Scrooge” protesting evictions and “greedy landlords” (none of whom were interviewed). The Chronicle claimed 100 participants at the rally. The Boston Globe also reported the event, but said 50 participants. The event being reported was engineered by paid activists trying to create an image of crisis.
       And the real grassroots...
      The real grassroots movement, however, was four years ago, when small property owners mainly from the three rent-controlled cities of Boston, Cambridge and Brookline collected over 100,000 signatures. Every bit as much “working families” as any tenants depicted in the media, these owners had been truly mistreated for 25 years and turned their mistreatment into political action.
      The failed tenant petition shows there is no such movement afoot amongst the tenants.