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SJC-12708
JAMES M. RYAN, executor,1,2 vs. MARY ANN MORSE HEALTHCARE CORP.3
Middlesex. September 9, 2019. - December 5, 2019.
Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.
Assisted Living Residence. Landlord and Tenant, Security deposit. Consumer Protection Act, Availability of remedy, Landlord and tenant. Statute, Construction.
Civil action commenced in the Superior Court Department on August 24, 2016.
A motion to dismiss was heard by Christopher K. Barry- Smith, J.
The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.
Joshua N. Garick (Matthew T. LaMothe also present) for the plaintiff. AiVi Nguyen for the defendant. The following submitted briefs for amici curiae:
1 Of the estate of Julia W. Ryan.
2 Individually and on behalf of all others similarly situated.
3 Doing business as Heritage at Framingham. 2
Joseph M. Desmond & Justin L. Amos for Massachusetts Assisted Living Association. Lillian Glickman, pro se. Elizabeth A. Aniskevich & Susan A. Silverstein, of the District of Columbia, Richard M.W. Bauer, Liane Zeitz, & Rebecca J. Benson for AARP & others.
KAFKER, J. At issue in this case is the extent to which
Massachusetts assisted living residences (ALRs) are subject to
the strictures of the security deposit statute, G. L. c. 186,
§ 15B. The defendant operates an ALR in Framingham that charges
new residents an upfront "community fee," in addition to the
first month's rent and the last month's rent permitted by G. L.
c. 186, § 15B. The community fee was intended to cover upfront
administrative costs, an initial service coordination plan,
move-in assistance, and a replacement reserve for building
improvements. The plaintiff alleges that the community fee
violates G. L. c. 186, § 15B, as it exceeded the upfront costs
allowed by the security deposit statute. The defendant moved to
dismiss the suit, arguing that ALRs are not subject to G. L.
c. 186, § 15B. The motion to dismiss was granted, and the
plaintiff appealed.
We conclude that G. L. c. 19D, the ALR statute,
incorporates applicable consumer protection laws, including
G. L. c. 186, § 15B, but allows for additional upfront charges
for the distinctive services assisted living facilities provide
that are not applicable to traditional landlord-tenant 3
relationships. Indeed, the ALR statute and corresponding
regulations expressly provide for the payment of particular fees
related to initial assessments of residents to determine their
suitability for placement in an assisted living facility. Such
services and fees have no applicability to the traditional
landlord-tenant relationship, and are thus not subject to the
security deposit law. Accordingly, ALRs may institute upfront
charges beyond those permitted by G. L. c. 186, § 15B (1) (b),
to the extent that such charges correspond to the distinct
services enumerated in G. L. c. 19D, § 13, or to other services
designed specifically for assisted living residences. If,
however, an ALR charges upfront fees that are not used to fund
such distinct assisted living services, it does so in violation
of § 15B.
In the instant case, further factual development is
required to determine whether the fee at issue was permissibly
charged and used for services distinct to ALRs, and thus the
motion to dismiss was not properly allowed. One or more
components of the defendant's community fee appear to have been
charged for initial assessments mandated by the ALR statute.
Such a service and fee would be specific to assisted living
facilities and not governed by the security deposit statute.
However, further clarification and factual development as to the
purpose and use of other components of the community fee is 4
required, particularly for the replacement reserve fee for
building improvements. We cannot discern on this record whether
each component of the community fee was imposed and used for
services distinct to assisted living facilities but inapplicable
to the traditional landlord-tenant relationship. We therefore
reverse the decision allowing the motion to dismiss and remand
the case to the Superior Court for further proceedings
consistent with our decision.4
1. Background. a. Facts. We review the allowance of a
motion to dismiss de novo, accepting as true all well-pleaded
facts alleged in the complaint. See Calixto v. Coughlin, 481
Mass. 157, 158 (2018). We summarize the factual allegations as
set forth in the complaint and the residency agreement
referenced by both parties.5 See Marram v. Kobrick Offshore
Fund, Ltd., 442 Mass. 43, 45 & n.4 (2004).
4 We acknowledge the amicus briefs submitted by the Massachusetts Assisted Living Association, by Lillian Glickman, and by AARP, AARP Foundation, the National Consumer Law Center and the National Academy of Elder Law Attorneys.
5 The residency agreement into which Julia Ryan entered with the defendant was not attached to the plaintiff's complaint. Rather, the agreement was first submitted as an exhibit to the defendant's memorandum in support of its motion to dismiss. Despite this, the complaint makes clear reference to the agreement. Indeed, both parties rely on the terms of the agreement in support of their briefing, and neither party disputes the existence or terms of the agreement. Thus, in light of the importance of this document, and the fact that it is not in dispute, this court may properly consider it in 5
In 2013, Julia Ryan entered into an agreement with Mary Ann
Morse Healthcare Corp., doing business as Heritage at Framingham
(Heritage), to lease an apartment in the defendant's ALR in
Framingham. The agreement, titled "Residency Agreement,"
provided that Heritage "hereby leases to the Resident" an
apartment at the Framingham facility.
Ryan's rent was $4,000 per month. Prior to the
commencement of Ryan's residency, Heritage required her to pay
the first and last month's rent. In addition to the first and
last month's rent, Heritage also charged Ryan a nonrefundable,
one-time "community fee" of $2,800. According to the residency
agreement, the community fee was "intended to cover upfront
staff administrative costs, the Resident's initial service
coordination plan and move-in assistance, and establish a
replacement reserve for building improvements." The agreement
also provided that "the Community is required to pay interest to
connection with the complaint. See Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43, 45 n.4 (2004) (because "the plaintiff had notice of these documents and relied on them in framing the complaint, the attachment of such documents to a motion to dismiss does not convert the motion to one for summary judgment, as required by Mass. R. Civ. P. 12 [b] [6], 365 Mass. 754 [1974]"). See also Berkowitz v. President & Fellows of Harvard College, 58 Mass. App. Ct. 262, 270 n.7 (2003). 6
the Resident annually in keeping with the Landlord/Tenant Law
Chapter 186, Section 151B(2)(a)."6
In 2016, James Ryan, the executor of Julia Ryan's estate,
commenced this putative class action, alleging that Heritage
violated G. L. c. 186, § 15B, and G. L. c. 93A by charging new
residents the community fee. Heritage moved to dismiss the
plaintiff's complaint, claiming that, as an ALR, it was not
subject to the security deposit statute. On March 5, 2018, a
judge in the Superior Court granted the motion, concluding that
the Legislature did not intend for ALRs to be subject to the
security deposit statute. The plaintiff appealed.
In May 2017, while the motion to dismiss was still pending,
a different judge in the Superior Court concluded that the
security deposit statute did apply to ALRs. See Gowen vs.
Benchmark Senior Living LLC, Mass. Super. Ct., No. 1684CV03972-
BLS2 (Suffolk County May 9, 2017). The Gowen decision
recognized, however, a possible exception to the fee
restrictions imposed by G. L. c. 186, § 15B, in the context of
ALRs, stating:
"The statutory limitation on fees imposed by residential landlords only governs fees charged for a 'tenancy.' To the extent that [the defendant] or another assisted living facility operator provides its residents with services that
6 The reference to "151B(2)(a)" in the residency agreement appears to be a typographical error. As discussed infra, the pertinent section pertaining to a landlord's handling of the last month's rent is G. L. c. 186, § 15B (2) (a). 7
are beyond the scope of a typical residential tenancy, it is entitled to charge for those services and may do so without running afoul of § 15B." (Citation omitted.)
Id. at 3-4. The judge went on to conclude, however, that the
plaintiff had plausibly alleged facts suggesting that the
community fee "was assessed at least in part as a charge for her
residential tenancy, and not for separate activities or
services." Id. at 4. That judge reached a similar conclusion
again in another case in August 2018. See Hennessy vs.
Brookdale Senior Living Communities, Inc., Mass. Super. Ct., No.
1784CV04215-BLS2 (Suffolk County Aug. 1, 2018). In light of the
conflicting reasoning and outcomes on this issue by judges in
the Superior Court, we transferred the plaintiff's appeal to
this court on our own motion.
b. Relevant statutes. i. The security deposit statute.
The Legislature enacted the security deposit statute "as part of
an elaborate scheme of rights and duties to prevent abuses and
to insure fairness to the tenant." Meikle v. Nurse, 474 Mass.
207, 212 (2016). "In passing the [security deposit statute],
the Legislature recognized that tenants have less bargaining
power than landlords and are less able to vindicate their rights
in court." Phillips v. Equity Residential Mgt., L.L.C., 478
Mass. 251, 254 (2017). See Mellor v. Berman, 390 Mass. 275, 282
(1983) (explaining that § 15B manifests Legislature's "concern
for the welfare of tenants in residential property who, as a 8
practical matter, are generally in inferior bargaining positions
and find traditional avenues of redress relatively useless").
Accordingly, § 15B "protects tenants by providing clear
guidelines for landlords to follow with regard to handling
security deposits." Phillips, supra.
Section 15B provides, inter alia, that "[a]t or prior to
the commencement of any tenancy, no lessor may require a tenant
or prospective tenant to pay any amount in excess of" four
enumerated charges. G. L. c. 186, § 15B (2) (b). Specifically,
lessors are limited to charging the first month's rent, the last
month's rent, a security deposit equal to the first month's
rent, and the purchase and installation cost for a key and lock.
Id. Charging any amount in excess of those four permissible
fees is considered an unfair or deceptive practice in violation
of G. L. c. 93A. See 940 Code Mass. Regs. § 3.17(4)(a) (1993).
To the extent that a landlord charges a permissible upfront
fee, § 15B also imposes specific requirements as to the handling
of those fees. If a landlord chooses to require a security
deposit, the landlord must hold the deposit in a "separate,
interest-bearing account in a bank, located within the
commonwealth under such terms as will place such deposit beyond
the claim of creditors of the lessor." G. L. c. 186,
§ 15B (3) (a). If a landlord chooses to require the last
month's rent upfront, the landlord must "pay interest at the 9
rate of five per cent per year or other such lesser amount of
interest as has been received from the bank where the deposit
has been held." G. L. c. 186, § 15B (2) (a). The landlord must
also provide the tenant with yearly receipts as to the amount of
interest payable on the last month's rent. See id. The failure
to comport with these requirements may entitle a tenant to
recover treble damages against his or her landlord. See id.;
G. L. c. 186, § 15B (7).
Section 15B also provides additional protections for
tenants beyond the mere regulation of fees. Landlords must
furnish new tenants with a statement of the condition of the
premises and adhere to strict record-keeping requirements upon
withholding any portion of the tenant's security deposit after
the termination of the tenancy. Further, pursuant to G. L.
c. 186, § 15B (1) (a), a landlord may only enter the premises
"to inspect the premises, to make repairs thereto or to show the
same to a prospective tenant, purchaser, mortgagee or its
agents," to survey damage to the premises from an outgoing
tenant, or in accordance with a court order or if the premises
appear to have been abandoned.
Although the security deposit statute does not explicitly
define the scope of its applicability, "the elaborately drafted
text of the section indicates by repeated references that the
draftsmen were thinking in terms of residential applicability." 10
Shwachman v. Khoroshansky, 15 Mass. App. Ct. 1002, 1002 (1983).
See Norfolk & Dedham Mut. Fire Ins. Co. v. Morrison, 456 Mass.
463, 468-469 (2010) (acknowledging that G. L. c. 186, § 15B,
applies to residential, rather than commercial, leases).
ii. The ALR statute. Decades after the enactment of the
security deposit statute, the Legislature enacted G. L. c. 19D,
which regulates ALRs. See St. 1994, c. 354. That statute
defines ALRs as entities that (1) provide room and board; (2)
provide "assistance with activities of daily living for three or
more adult residents who are not related by consanguinity or
affinity to their care provider"; and (3) "collect[] payments or
third party reimbursements from or on behalf of residents to pay
for the provision of assistance with the activities of daily
living or arranges for the same." G. L. c. 19D, § 1. Examples
of the types of assistance that residents may receive include
assistance with bathing, dressing, grooming, ambulation, and
other similar tasks. See G. L. c. 19D, §§ 1, 10.
In order to provide these services, ALRs develop a "service
plan" with each resident and document the provision of services
in accordance with the plan using written progress reports.
G. L. c. 19D, § 2 (v), (vi), (vii). These individualized plans
must describe "the needs of the resident for personal services
and the providers, or intended providers thereof, and the
frequency and duration of such services." G. L. c. 19D, § 12. 11
ALRs must also provide residents with opportunities to
socialize, access to community resources, regular meals,
housekeeping, self-administered medication management, and
laundry services. G. L. c. 19D, § 10 (a). Further, ALRs must
have a system in place to respond to emergency resident needs.
G. L. c. 19D, § 10 (a) (6). ALRs may also choose to provide
residents with additional amenities, such as local
transportation and barber and beauty services. See G. L.
c. 19D, § 10 (b).
Because the suitability of a resident's placement in an ALR
turns on whether the ALR can adequately accommodate the
resident's needs, ALRs conduct an initial screening and
assessment of each resident before he or she moves in. See 651
Code Mass. Regs. § 12.04(6) (2017). The screening and
assessment evaluate the prospective resident's service needs and
preferences, as well as the ALR's ability to meet those needs.
Id. Each resident's service plan must be developed before the
resident moves into the facility. See 651 Code Mass. Regs.
§ 12.04(7) (2017).
Within the realm of elderly housing options, ALRs fall
within a "spectrum of living alternatives for the elderly in the
commonwealth." St. 1994, c. 354, § 1. ALR facilities provide
elderly residents with services well beyond what would be
available at a regular apartment complex, but short of the care 12
and supervision at a nursing home. See id. Unlike regular
apartment complexes, ALRs not only provide elderly residents
with private living quarters but, as discussed supra, also
furnish personal services to assist residents with daily tasks.
See G. L. c. 19D, §§ 1, 10, 16. "In support of the goal of
aging in place, the services available . . . are added,
increased or adjusted to compensate for the physical or
cognitive impairment of the individual while maximizing the
individual's dignity and independence." St. 1994, c. 354, § 1.
However, ALRs are not operated or regulated as medical or
nursing facilities, and do not provide the level of extensive
medical care available from those facilities. See id.; G. L.
c. 19D, § 18 (a). Accordingly, individuals who require twenty-
four hour skilled nursing care may not reside in an ALR. See
G. L. c. 19D, § 11. Indeed, ALRs may not house residents who
require any skilled nursing care, unless the care falls within
narrow limitations.7 See id. See also G. L. c. 19D, § 18 (a)
7 Specifically, ALRs may only house residents who require skilled nursing care if all of the following conditions are met:
"1. The care will be provided by a home health agency certified under Title XVIII of the Social Security Act, 49 Stat. 620 (1935), 42 U.S.C. [§§] 301, as amended or an entity licensed under [G. L. c. 111], on a part-time, intermittent basis for not more than a total of ninety days in any twelve-month period, or by a licensed hospice. 13
(exempting ALRs from statutes applicable to nursing homes and
hospitals). Thus, ALRs serve individuals who suffer from some
cognitive or physical limitations that require additional
assistance with daily tasks, but who do not need extensive
medical care and wish to remain in a residential setting.
As a prerequisite to operating in the Commonwealth, ALRs
must apply for, and obtain, certification from the Executive
Office of Elder Affairs (EOEA). See G. L. c. 19D, §§ 3, 4.
Applications for certification require ALRs to disclose an
operating plan for the facility. See G. L. c. 19D, § 4. ALRs
must also report whether the facility is "in sound fiscal
condition" with "sufficient cash flow and reserves" to meet the
needs of their residents' service plans. See id. An ALR's
failure to maintain its certification will subject the operator
of the facility to civil liability. See G. L. c. 19D, § 8. In
order to receive or renew its certification, an ALR must submit
to a compliance review of the premises at least once every two
years. See 651 Code Mass. Regs. § 12.09 (2017). ALRs must also
meet minimum management and staffing qualifications and adhere
"2. The certified home health agency, entity licensed under [G. L. c. 111], or hospice does not train [ALR] staff to provide the skilled nursing care.
"3. The individual to whom the skilled nursing care is provided is suffering from a short-term illness."
G. L. c. 19D, § 11. 14
to certain staff training requirements. G. L. c. 19D, § 2 (ix);
651 Code Mass. Regs. §§ 12.06, 12.07 (2017).
To handle possible compliance issues, the ALR statutory and
regulatory scheme provides for a Statewide ombudsman program
that receives, investigates, and resolves resident complaints.
See G. L. c. 19D, § 7; 651 Code Mass. Regs. § 13.09 (1995). The
ALR statute also provides an enumerated list of eighteen
resident rights, including the right to "not be evicted from the
[ALR] except in accordance with the provisions of landlord
tenant law as established by [G. L. c. 186] or [G. L. c. 239]."
G. L. c. 19D, § 9 (18). The ALR statute does not, however,
include a private right of action.
2. Discussion. The issue presented in this case is
whether the restrictions on initial residential lease fees
contained within G. L. c. 186, § 15B, apply to ALRs certified
pursuant to the ALR statute. More broadly, it raises the issue
whether and to what extent the ALR statute incorporates
additional protections for residents that are not enumerated
within the ALR statute itself. Heritage characterizes the ALR
statute as largely a stand-alone regulatory scheme addressing a
distinct residential arrangement. The plaintiff, by contrast,
asserts that the ALR statute incorporates consumer protection
laws, including the security deposit law, and ALRs fall well
within the scope of the landlord-tenant relationships governed 15
by such laws. The question is not an easy one. The statute is
a complex combination of stand-alone provisions and cross-
references to other "applicable" laws. Whether a statute is
"applicable" in whole, in part, or not at all is not always
clear. Two different Superior Court judges in three separate
cases carefully considered the question and reached opposite
conclusions as to the applicability of the security deposit
statute to ALRs. We conclude that the ALR statute incorporates
applicable consumer protection laws, including G. L. c. 186,
§ 15B, but allows for additional upfront charges for the
distinctive services ALR facilities provide that are not
applicable to traditional landlord-tenant relationships.
a. Standard of review. We interpret statutes in
accordance with the intent of the Legislature. See Meyer v.
Veolia Energy N. Am., 482 Mass. 208, 211 (2019). "Ordinarily,
where the language of a statute is plain and unambiguous, it is
conclusive as to legislative intent" (citation omitted). Ciani
v. MacGrath, 481 Mass. 174, 178 (2019). Where the statutory
language is ambiguous or unclear, however, our task is more
complicated. "Where the words of the statute are ambiguous, we
strive to make it an effectual piece of legislation in harmony
with common sense and sound reason and consistent with
legislative intent" (quotation and citation omitted).
Commonwealth v. Pon, 469 Mass. 296, 302 (2014). We must also 16
take into account the interrelationship of different statutes.
"In the absence of explicit legislative commands to the
contrary, we construe statutes to harmonize and not to undercut
each other." School Comm. of Newton v. Newton Sch. Custodians
Ass'n, Local 454, SEIU, 438 Mass. 739, 751 (2003).
b. Ambiguity of the ALR statute. The extent to which the
Legislature intended to provide ALR residents with the
protections afforded by other statutes is not readily apparent
from the plain language of the ALR statute. The statute
repeatedly makes reference to the fact that ALRs are subject to
other "applicable" laws and regulations. For example, G. L.
c. 19D, § 16, requires ALRs to "meet the requirements of all
applicable federal and state laws and regulations, including,
but not limited to, the state sanitary code, state building and
fire safety codes and regulations, and laws and regulations
governing handicapped accessibility."8 Additionally, ALRs are
8 The ALR statute further provides that, "[i]n order to facilitate compliance with these laws and regulations, the [Executive Office of Elder Affairs (EOEA)], in consultation with the department of housing and community development and the executive office of public safety, shall compile and make available a list of all such applicable laws and regulations." G. L. c. 19D, § 16. The EOEA does not appear to have compiled such a list. Rather, the corresponding regulations parrot the same language found in the statute. See 651 Code Mass. Regs. § 12.04(1)(e) (2017) ("Every [ALR] shall meet the requirements, of all applicable federal and state laws and regulations including, but not limited to, the state sanitary codes, state building and fire safety codes and laws and regulations governing use and access by persons with disabilities"). 17
required to enter into a written residency agreement with each
resident that includes a "covenant to comply with applicable
federal and state laws and regulations regarding consumer
protection and protection from abuse, neglect and financial
exploitation of the elderly and disabled." G. L. c. 19D, § 14.
Despite these references, the ALR statute does not identify
which laws or regulations regarding consumer protection and
protection from abuse, neglect, and financial exploitation of
the elderly and disabled are "applicable" to ALRs. Nor does the
statute expressly address whether G. L. c. 186, § 15B, is
applicable. There is only one reference to G. L. c. 186 -- the
ALR statute provides that tenants may be evicted only in
accordance with G. L. c. 186 and G. L. c. 239. See G. L.
c. 19D, § 9 (18).
Each party urges us to draw inferences selectively from the
ALR statute's ambiguity. The plaintiff relies on the language
in the ALR statute generally incorporating applicable consumer
protection laws. The plaintiff also relies on the failure to
include the security deposit statute in a list of laws
referenced in the ALR statute as being inapplicable.9 The
9 The statute explicitly states that ALRs "shall not be subject to the provisions of" G. L. c. 1ll, §§ 25B-25H, 51, 70E- 73B, or G. L. c. 40A, § 9, seventh par. G. L. c. 19D, § 18 (a). These laws primarily pertain to the statutory schemes governing 18
defendant contends that the Legislature's explicit reference to
G. L. c. 186 with regard to evictions implies that the
Legislature did not intend for G. L. c. 186 to otherwise apply.10
Neither proffered explanation is wholly satisfactory, as each
relies on selective readings of the statutory language.
c. Harmonizing the ALR statute with preexisting law. To
resolve the ambiguity, we look at the statute holistically to
determine its intent. See Casseus v. Eastern Bus Co., 478 Mass.
786, 795 (2018). See also Adams v. Boston, 461 Mass. 602, 613
(2012) (employing maxim that "[s]eemingly contradictory
provisions of a statute must be harmonized so that the enactment
as a whole can effectuate the presumed intent of the
Legislature" [citation omitted]). We also recognize that,
whenever possible, "a statute is to be interpreted in harmony
with prior enactments to give rise to a consistent body of law."
hospitals, nursing homes, and other long-term care facilities. See 651 Code Mass. Regs. § 12.14 (2017).
10We also note that it is not immediately clear which portions of G. L. c. 186 are implicated by the ALR statute's reference to eviction proceedings. For example, eviction actions under G. L. c. 186 may implicate G. L. c. 186, § 15B, to the extent such evictions involve impermissible penalties, see Commonwealth v. Chatham Dev. Co., 49 Mass. App. Ct. 525, 527-528 (2000), or the failure to return a security deposit posteviction, see Vinton v. Demetrion, 19 Mass. App. Ct. 948, 949 (1985). Further, we have held that a violation of the security deposit statute may be asserted as a defense to a summary process action for possession under G. L. c. 239. See Meikle v. Nurse, 474 Mass. 207, 213-214 (2016). 19
Jancey v. School Comm. of Everett, 421 Mass. 482, 496 (1995).
See County Comm'rs of Middlesex County v. Superior Court, 371
Mass. 456, 460 (1976) ("Statutes which do not necessarily
conflict should be construed to have consistent directives so
that both may be given effect"). "Where two statutes appear to
be in conflict, . . . we 'endeavor to harmonize the two statutes
so that the policies underlying both may be honored.'" George
v. National Water Main Cleaning Co., 477 Mass. 371, 378 (2017),
quoting Commonwealth v. Harris, 443 Mass. 714, 725 (2005). We
conclude that when the two statutes at issue here are read
holistically, they can be harmonized as follows: the security
deposit law was meant to be incorporated by the ALR statute to
the extent that it is applicable to ALRs, but ALRs may also
charge additional upfront fees for the distinct services that
such facilities provide that are not applicable to ordinary
landlord-tenant relationships.
We begin with the express statutory language of the ALR
statute. In so doing, we presume that the Legislature enacted
the ALR statute with full knowledge of the security deposit
statute that preceded it. Alliance to Protect Nantucket Sound,
Inc. v. Energy Facilities Siting Bd., 457 Mass. 663, 673 (2010).
The ALR statute requires ALRs to include a provision within
their residency agreements "to comply with applicable federal
and state laws and regulations regarding consumer protection and 20
protection from abuse, neglect and financial exploitation of the
elderly and disabled." G. L. c. 19D, § 14. We conclude that
the security deposit statute, G. L. c. 186, § 15B, is an
"applicable" consumer protection law, at least to the extent
that ALRs resemble a traditional landlord-tenant relationship.
As we have previously recognized, tenant protections are firmly
rooted within the Commonwealth's consumer protection laws. See
Humphrey v. Byron, 447 Mass. 322, 327 (2006) ("modern notions of
consumer protection have played a role in the development of the
law regarding residential leases" [quotation and citation
omitted]). This is so because residential tenants generally
inhabit an inferior bargaining position relative to their
landlords, and the Legislature has enacted laws such as the
security deposit statute out of concern for their welfare. See
Mellor, 390 Mass. at 282. Such protections are particularly
significant for elderly tenants, who are among the most needy
and vulnerable segments of our population. See Lowell Hous.
Auth. v. Melendez, 449 Mass. 34, 40 (2007). They are greatly
dependent upon, and benefited by, such laws. If the security
deposit statute were not applicable to ALRs, ALR residents would
be in a worse position than other elderly residents living in
their own apartments. They would also be without the extensive
regulatory protections that inure to nursing home residents. We 21
discern no intention by the Legislature to leave this particular
group of elderly residents unprotected relative to their peers.
The implication of such tenant protections within the ALR
context also comports with the significant similarities between
ALR residencies and residential tenancies. An ALR must enter
into a written residency agreement with each resident that is
akin to a lease; the residency agreement sets forth the rights
and responsibilities of both the resident and the entity that
runs the ALR. See G. L. c. 19D, § 14. The agreement must also
specify "the conditions under which the agreement may be
terminated by either party," as well as "reasonable rules for
conduct and behavior." Id. Additionally, each resident's unit
must include amenities traditionally found in an apartment, such
as lockable doors, private bathrooms, and kitchenettes or access
to kitchen amenities. See G. L. c. 19D, § 16. See also 651
Code Mass. Regs. § 12.04(1) (2017). Moreover, ALR residents are
entitled to protections resembling the warranties of
habitability and quiet enjoyment provided to residential
tenants. See G. L. c. 19D, § 9 (1), (3). These components of
the ALR statute reflect the Legislature's intent to ensure that
such facilities constitute a suitable residential environment.11
11Notably, the Legislature repeatedly made reference to the residential nature of ALRs in articulating the purpose of the ALR statute: 22
Indeed, the Legislature explicitly states that ALRs "should be
operated and regulated as residential environments with
supportive services and not as medical or nursing facilities."
St. 1994, c. 354, § 1.
In sum, we conclude that the security deposit statute is a
consumer protection law applicable to ALRs to the extent that
ALRs resemble an ordinary landlord-tenant relationship. This
is, however, not the end of our analysis. We must now consider
the services that ALR facilities provide that are not applicable
to ordinary landlord-tenant relationships, and determine whether
ALR facilities may impose upfront fees for such services. We
conclude that they may.
d. The inapplicability of security deposit statute to
distinct ALR services. In analyzing the applicability or
inapplicability of the security deposit statute, in part or in
"to promote the availability of services for elderly or disabled persons in a residential environment; to encourage the development of residential alternatives that promote the dignity, individuality, privacy and decision-making ability of such persons; to provide for the health, safety, and welfare of residents in [ALRs]; to promote continued improvement of such residential alternatives; to encourage the development of innovative and affordable residential alternatives for such persons; and to encourage the provision of economic, social and health services to residents through such residential alternatives by sponsors of [ALRs] and community agencies" (emphases added).
St. 1994, c. 354, § 1. 23
whole, we must also examine the differences between ALRs and
traditional landlord-tenant relationships. We conclude that the
important differences between these relationships, in
combination with express language in the ALR statute allowing
for particular charges, permit the imposition of fees for the
distinct services ALRs provide, and that doing so does not
constitute a violation of the security deposit statute.
Here we focus on substance, not semantics. To be sure, the
ALR statute uses terms different from the traditional language
of tenancy, employing the term "resident" rather than "tenant"
and "residency agreement" rather than "lease." G. L. c. 19D,
§ 1. More important, however, are the significant substantive
differences between an ALR and a regular residential landlord.
Chief among these is the ALR's obligation to provide multiple
services to elderly residents needing assistance with activities
of daily living, apart from mere possession of a rental unit.
See APT Asset Mgt., Inc. v. Board of Appeals of Melrose, 50
Mass. App. Ct. 133, 143 (2000) ("Landlords do not customarily
provide their tenants with most of these [ALR] services nor are
they required by law to do so").12
The ALR statute's definition of "elderly housing" 12
elucidates this distinction. Elderly housing, which falls outside the statute's purview, is defined as "any residential premises available for lease by elderly or disabled individuals which is financed or subsidized in whole or in part by state or 24
Indeed, while normal residential leaseholds do not
contemplate, and certainly do not mandate, the provision of
elderly assistance services, ALR residencies are premised upon
them. The provision of elderly assistance services is the means
by which the Legislature contemplated that ALRs would allow the
elderly to "age in place" in a residential setting, without
prematurely moving to a nursing home. See St. 1994, c. 354,
§ 1. By providing elderly residents with services that
"compensate for the physical or cognitive impairment of the
individual," ALRs ensure that the elderly can receive adequate
assistance with daily tasks "while maximizing [their] dignity
and independence." Id. These services are thus mandated by
law. They are, as explained supra, the sine qua non of ALRs.13
Because the provision of services is at the core of what an
ALR does for its residents, it is crucial that the services be
tailored for each individual resident, and that the ALR have the
federal housing programs established primarily to furnish housing rather than housing and personal services" (emphasis added). G. L. c. 19D, § 1. This definition makes clear that the primary difference between ALRs and age-restricted housing turns on the provision of personal services.
Even to the extent that a residential lease includes the 13
provision of certain services to a tenant, such as those provided in a luxury apartment complex, they are distinguishable from the services furnished by ALRs. While luxury apartment complexes may choose to provide additional amenities to tenants at their own discretion, ALRs are mandated by law to provide specific elderly assistance services tailored to the needs of their residents. 25
ability to appropriately furnish such services. An ALR would
not be able to adequately "provide for the health, safety, and
welfare" of residents in accordance with the ALR statute's
purpose if it admitted an individual that the ALR was ill
equipped to care for. See St. 1994, c. 354, § 1. Moreover, the
ALR statute requires that ALRs formulate individualized service
plans for each of their residents, and the regulations specify
that such plans are to be developed before the resident moves
in. See G. L. c. 19D, § 12 (a); 651 Code Mass. Regs.
§ 12.04(7). Thus, a prospective ALR resident must also undergo
an initial screening and assessment to determine whether the ALR
is adequately suited to the prospective resident's particular
needs. See 651 Code Mass. Regs. § 12.04(6). This constitutes
one of the other most significant distinctions between ALR
residencies and residential leases and has specific implications
for the applicability of the security deposit statute. Regular
residential landlords are not mandated by statute or regulation
to conduct the kind of assessment that ALRs are so mandated to
conduct. Thus, while landlords are strictly prohibited from
imposing upfront charges that exceed those specifically
enumerated in the security deposit statute, such a prohibition
is incongruous in the context of an ALR, which is mandated to
spend additional resources on initial resident assessments. 26
In recognition of this mandate, the ALR statute explicitly
contemplates that ALRs may charge privately paying residents for
such initial assessments. Pursuant to G. L. c. 19D, § 13,
residents eligible for financial assistance under G. L. c. 118E,
which governs MassHealth, are entitled access to preadmission
screening procedures and assessments.14 Section 13 provides in
pertinent part:
"All elderly residents or residents with special needs who seek admission to an [ALR] and who are eligible for the medical assistance program under [G. L. c. 118E], shall:
"1. Be afforded the opportunity to apply for [ALR] services, and be informed about the eligibility requirements and his or her rights and obligations under the program.
"2. Have an initial pre-screening assessment conducted for the purposes of determining eligibility for and need of assisted living services. Such assessment shall consider the appropriateness of assisted living services for said resident, and other community-based alternatives that are appropriate and available.
"3. Have a service plan monitoring assessment conducted by an assessor at the site of the [ALR] resident annually from the date of initial occupancy. Said monitoring assessment shall determine if the services provided to the resident are meeting his or her needs as determined in the service plan, the assessor shall report any instances of resident abuse or neglect pursuant to [G. L. c. 19A, § 15,] and [G. L. c. 111, § 72G]."
14For ALR residents who receive financial assistance under G. L. c. 118E, the ALR statute specifies that such service plans are to be "developed in consultation with the pre-screening assessor as set forth in [G. L. c. 19D, § 13]." G. L. c. 19D, § 12 (a). 27
G. L. c. 19D, § 13. Crucially, while this provision focuses on
the rights of residents who receive financial assistance, it
also states that privately paying residents "may be offered the
services specified in said subparagraphs 1 to 3, inclusive, on a
fee for service basis."15 Id. Thus, by its very terms, the ALR
statute permits ALRs to charge privately paying residents for
initial prescreening assessments on a "fee for service basis."
In interpreting this provision, "[w]e presume that the
Legislature acts with full knowledge of existing laws."
Alliance to Protect Nantucket Sound, Inc., 457 Mass. at 673. At
the time of the ALR statute's passage in 1994, the security
deposit statute had been in effect in its present form for
nearly twenty years and was a mainstay of modern landlord-tenant
law in the Commonwealth. Accordingly, because the ALR statute,
passed after the security deposit statute, explicitly permits
upfront charges that pertain to initial resident assessments,
15The overwhelming majority of individuals residing in ALRs appear to be privately paying residents. According to the Massachusetts Assisted Living Association, approximately ninety percent of ALR residents in Massachusetts pay privately. Mass- ALA, Massachusetts Assisted Living Resource Guide 3 (2019). In 2018, only 2.9% of ALR residents were enrolled in Group Adult Foster Care, a benefit program provided by MassHealth that assists with personal care services and medication management expenses. Executive Office of Elder Affairs, Assisted Living Residence Certification Program: Resident Aggregate Information Annual Report 3 (2018), https://www.mass.gov/files/documents /2019/10/11/ALR%20Annual%20Distribution%20Report%20Summary%20- %20CY2018%20%20%2010.8.19.pdf [https://perma.cc/RQW7-BS5H]. 28
while the security deposit statute does not, we conclude that
the Legislature intended for such charges to be permissible.16
This interpretation of the ALR statute is further bolstered
by the corresponding ALR regulations. In apparent recognition
of the fee for service provision in G. L. c. 19D, § 13, the EOEA
promulgated regulations that acknowledge that ALR residents may
be charged an "administrative fee" in connection with their
admission. See 651 Code Mass. Regs. § 12.02 (2017).17 The
16 Other sections within the ALR statute similarly clarify how an ALR resident's rights under the security deposit statute are modified by the ALR's provision of services. For example, while the security deposit statute strictly curtails a landlord's ability to enter a residential tenant's premises, see G. L. c. 186, § 15B (1) (a), the ALR statute provides that residents have a right to privacy within their living unit "subject to rules of the [ALR] reasonably designed to promote the health, safety and welfare of residents." G. L. c. 19D, § 9 (3). This provision indicates that while an ALR resident has a right to privacy, this right may be subject to ALR- specific exceptions, such as the need to enter a resident's living unit to provide daily services, to assist in an emergency, or to supervise access to kitchen amenities. See 651 Code Mass. Regs. § 12.04(1)(a) (2017) ("Residents shall have exclusive rights to their Units . . . . [H]owever, as part of a Resident's Service Plan, keys or access codes may be readily available to specified shift staff"). 17 The statute applicable to continuing care retirement
communities also explicitly acknowledges "entrance fees." See G. L. c. 93, § 76 (a) (defining entrance fee as "an initial or deferred transfer to a provider of a sum of money or other property made or promised to be made as full or partial consideration for acceptance of a specified individual as a resident in a facility"). At a hearing on the motion to dismiss, however, the defendant conceded that it is not a continuing care retirement community. Nor has either party, or the amici, provided us with briefing on the issue. Accordingly, we decline to consider the permissibility of upfront charges in continuing care retirement communities. 29
regulations define an administrative fee as "[a]ny charge billed
to and payable by a Resident as a condition of admission,
excluding room, board, and services." Id. The initial
assessment activities that ALRs are mandated to conduct are
unquestionably conditions of admission, and the regulatory
definition recognizes that charges may be imposed for such
activities, which fall outside the purview of regular monthly
charges for room, board, and ongoing services. As the EOEA is
the agency charged with administering the ALR statute, its
interpretation of the statute is entitled to deference. See
Camargo's Case, 479 Mass. 492, 497 (2018) ("In matters of
statutory interpretation, deference is due when an agency
interprets a statute it is charged with administering"
[quotation and citation omitted]). Thus, the fact that the EOEA
contemplated that initial fees may be charged in accordance with
G. L. c. 19D, § 13, further demonstrates that such charges are
permissible.
In summary, we conclude that the significant differences
between ALRs and residential landlords, combined with the
explicit language of the statute and the EOEA's interpretation
thereof, indicate a legislative intent to allow ALRs to charge
incoming residents initial fees that correspond to initial ALR-
specific services inapplicable to ordinary landlord-tenant
relationships, without violating the security deposit statute. 30
e. Permissibility of the community fee. We turn now to
the specific allegations advanced in the instant case. To
determine whether the community fee was charged in violation of
the security deposit statute, it is necessary to examine both
the purpose for which the fee was imposed as well as the
specific way in which the fee was used. To be permissible, the
purpose and the use of the community fee must correspond to
either the on-boarding services enumerated in G. L. c. 19D,
§ 13, or other services designed specifically for ALRs. In
other words, the permissibility of the community fee will hinge
on a determination of (1) the actual purpose and use of the fee,
and (2) whether such purpose and use are for distinctive ALR-
specific services, rather than general maintenance or other
aspects of a generic residential tenancy.
The plaintiff's complaint does not specify whether the
community fee was used to charge solely for initial assessment
services distinctive to the ALR. The residency agreement, which
both sides agree is applicable and should be considered in
connection with the motion to dismiss, see note 5, supra,
indicates that the community fee was directed toward "upfront
staff administrative costs, the Resident's initial service
coordination plan and move-in assistance, and [to] establish a
replacement reserve for building improvements." Of the four
categories listed, the first three appear to pertain to 31
distinctive entry services provided by the ALRs. Pursuant to
our analysis supra, imposing the community fee for such purposes
would appear to be permissible.18 In the instant case, however,
the residency agreement indicates that the community fee is not
limited to providing initial ALR-specific services. The last
category, which refers to establishing a replacement reserve for
building improvements, appears much more open ended and
potentially problematic. It is unclear from the language in the
residency agreement whether, and to what extent, this building
reserve fund was used toward ALR-specific services, rather than
generic building maintenance. If this fee were just a generic
building maintenance fee, imposed and used in the ordinary
course, with no particular connection to structures, services,
or requirements distinct to ALRs, it would fall afoul of the
security deposit prohibitions applicable to the landlord-tenant
relationship. Given the breadth of the language in the
plaintiff's residency agreement, and the uncertainty with which
it applies, the motion to dismiss should not have been allowed.
18Given the vagueness of the agreement and the complaint, and our conclusion that the motion to dismiss cannot be granted regarding the fourth component, we need not, however, definitively address this issue and decline to do so here. 32
At a minimum, factual development of the purpose and use of the
building maintenance fee was required.19
3. Conclusion. For the foregoing reasons, we reverse the
allowance of the defendant's motion to dismiss. We remand the
matter to the Superior Court for further proceedings consistent
with this opinion.
So ordered.
19Whether the community fee was, in fact, charged for each of the purposes listed in the residency agreement, or only a subset, is also a question of fact that cannot be resolved on the record before the court on a motion to dismiss.