COMMUNITY BUILDERS, INC., MANAGING AGENT CAMELLA TEOLI HOUSING, INC. vs. PEDRO REBOLLEDO

This matter came before the court on the plaintiff's motion for summary judgment. The motion was accompanied by a memorandum in support and the affidavit of Janna Perez, property manager for the plaintiff, (plaintiff exh A) with exhibits. The defendant filed an opposition with a memorandum. It was accompanied by the affidavit of Pedro Rebolledo with exhibits. Both parties were represented by counsel throughout this case. After hearing and a review of both parties' pleadings, the plaintiff's motion for summary judgment is DENIED, as the court finds that there are genuine issues with respect to material facts in this summary process case.

STANDARD OF REVIEW

To prevail on a motion for summary judgment, the moving party must demonstrate with admissible evidence, based upon pleadings, depositions, answers to interrogatories, admissions to file, documents, and affidavits, that there are no genuine issues as to any material facts. Additionally, the moving party must establish that they are entitled to judgment as a matter of law. Mass. R. Civ. P. 56 (c). Community National Bank v. Dawes, 369 Mass. 550 , 553-556 (1976). All evidentiary inferences must be resolved in favor of the non-moving party. See, Simplex Techs, Inc. v. Liberty Mut. Ins. Co., 429 Mass. 196 , 197 (1999). Once the moving party meets its initial burden of proof; the burden shifts to the non-moving party "to show with admissible evidence the existence of a dispute as to material fact. Godbout v. Cousens, 396 Mass. 254 , 261 (1985). "A party moving for summary judgment in a case in which the opposing party will have the burden of proof at trial is entitled to summary judgment if he demonstrates, by reference to material described in Mass R. Civ. P. 56 (c), unmet by countervailing materials, that the party opposing the motion has not reasonable expectation of proving an essential element of that party's case. Kourouvacilis v. General Motors Corp., 410 Mass. 706 , 575 N.E.2d 734 (1991).

DISCUSSION

The parties agree on the basic facts of the tenancy which the plaintiff seeks to terminate in this summary process case. Camella Teoli Housing, Inc. is the owner of the subject rental property located at 98D Jackson Street in Lawrence, Massachusetts. The Community Builders, Inc. manages the property for the owner. Pedro Rebolledo is a long-time tenant at the property. His apartment is subsidized by the Low Income Housing Tax Credits (LIHTC) program of the IRS, administered by MassHousing. His tenancy is governed by an occupancy agreement which began on June 22, 2010 (Exh 1 of plaintiff affidavit). Each year the parties executed a lease addendum to renew the lease at the rent for the next year. The last such lease addendum was signed by the parties for the term which began on June 1, 2018 (Exh B of defendant affidavit). It provided for a monthly rent of $801. Because the tenancy is subsidized by LIHTC program, rents are set by MassHousing and are not calculated as a percentage of tenants' income. Nor do the rents change if tenants' income changes.

Subsection B of the occupancy agreement provides:

RENT ADJUSTMENTS

Subject to the prior approval of MassHousing and subject to the provisions of Paragraph G(5) of this Agreement, the amount of the monthly rental obligation due under this Agreement may be changed by Management at any time during the term of this Agreement based upon any of the following reasons: (a) a change in the basic rent schedule for the entire Development; . . . Resident agrees to be bound by and to pay any such rent change.

On April 29, 2019 MassHousing changed the basic rent schedule for the entire Development. This resulted in a change in Mr. Rebolledo's rent from $801 to $924 effective June 1, 2019. Subsection B of the occupancy agreement further provides:

Management agrees to give thirty (30) days prior written notice of any such rental change to the Resident by addendum to be made a part of this Agreement, stating the new amount of Resident's rent. Any such notice will state the new amount Resident is required to pay, the date the new amount is effective, and the reason(s) for the change in rent.

In her affidavit Ms. Perez states that the owner provided Mr. Rebolledo with a written notice that complied with this provision of the occupancy agreement, although no copy of such a written notice was included with the pleading. In his affidavit Mr. Rebolledo denies that he received such a notice. He did receive a "MEMO to ALL RESIDENTS" dated May 29, 2019 notifying them of the new LIHTC rental rates to be adjusted at the next recertification time (Exh 5 of defendant affidavit). The rental rates set out in the memo do not include a rent of $924. Also in his affidavit, the defendant states that it was in late May 2019 that he received a telephone call from management to tell him what his new rent would be and to come to the office to sign his new lease addendum. In the phone call he objected to the increased rent on the grounds that he could not afford it. The parties agreed that although the lease addendum was available for the defendant to sign, he did not do so.

The court finds that there is a dispute as to the material fact of whether the plaintiff gave a written notice of the rent increase thirty days prior to June 1, 2019 as required by subsection B of the occupancy agreement.

Mr. Rebolledo argues that an additional material fact in dispute is whether he agreed to the rent increase. The court agrees that he did not affirmatively agree to the rent increase in 2019 nor did he ever pay the rent increase. However, the court finds that his failure to agree affirmatively is not a material fact. He had already agreed "to be bound by and to pay any such rent change" pursuant to subsection B of his occupancy agreement when he signed it (Exh 1 of plaintiff affidavit). Likewise, his assertion that he cannot afford the increased rent is not a material fact because the LIHTC program provides for a set rent which is not dependent on a tenant's financial situation (except that a tenant's income must be within a specified range in order to be eligible for the program).

The parties agree that the defendant did not pay either the old rent or the increased rent in June 2019. The landlord served a fourteen (14) day notice to quit for non-payment of rent dated June 10, 2019 (Exh 3 of plaintiff affidavit). The parties agree that the defendant did not pay either the old rent or the increased rent on July 1, 2019. On July 29, 2019 he made two payments of $801 each (the old rent). Since then, Mr. Rebolledo has continued to pay the old rent of $801. Therefore, he did not have a zero rent balance at any time relevant to this case (Exh 2 to plaintiff affidavit). He did not "cure" the arrearage pursuant to G.L. c. 186 §11 because he did not "pay[] or tender[]to the landlord or to his attorney all rent then due, with interest and costs of suit" by the day his answer was due (August 12, 2019) nor at any time since then.

The defendant argues that there is a material fact in dispute regarding whether his tenancy was properly terminated before the summons and complaint was served. The court agrees. While usually a landlord may not rely on a notice to quit for non-payment of rent in the situation where the arrearage consists only of the increased portion of the rent (See, Williams v. Seder, 306 Mass. 134 (1940), here the landlord could rely on a notice to quit for non-payment of rent based on the language of subsection B of the occupancy agreement, as discussed above. (In fact, when the notice to quit was served, the defendant had not paid any of the June rent.) However, pursuant to the terms of the addendum to the occupancy agreement, the notice to quit, even for non-payment of rent, cannot be a fourteen-day notice, but must be a thirty-day notice:

Notwithstanding any other provision of this Lease, Landlord shall give to Tenant not less than thirty days' written notice prior to terminating this Lease for any reason, including but not limited to nonpayment of rent, which notice shall specify the reasons for termination. {emphasis supplied} (Exh B of defendant affidavit).

Finally, the defendant raises the issue of whether the landlord created a new tenancy by accepting $801 as rent. The notice to quit includes language that would protect the landlord's rights:

If any tender of monies or payments does not comply with the requirements noted above or otherwise cure or excuse the breach as provided by law, any monies paid by you after the date of this notice shall be accepted for use and occupation only and not for rent, shall not waive this notice or any subsequent eviction, nor shall it create or reinstate any tenancy. (Exh 3 of plaintiff affidavit).

The fact that the defendant wrote "rent" on his June, July, and August checks (Exh 4 of defendant affidavit), without more, would not rebut the proposition that they were accepted as use and occupancy only. However, the landlord's agent gave a receipt dated August 29, 2019 stating that $801 is for "August rent". This at least raises the issue of whether this affirmative statement by the landlord's agent that the August payment, although late, was accepted as rent recreated the tenancy.

Order

The court finds that at least three facts crucial to the plaintiff's prima facie case are in genuine dispute: (1) whether the landlord followed its own lease procedures to make the rent increase, although otherwise valid, effective as to the defendant; (2) whether the tenancy was terminated properly pursuant to the lease and addendum; and (3) whether the landlord reinstated the tenancy by accepting "rent".

For the reasons stated above the plaintiff's motion for summary judgment is DENIED.

The parties report that discovery is complete and that they are otherwise ready for trial by jury. The Clerk's Office will schedule this case for the Salem jury session.