On this record, yes. In a February 2025 decision, the Appeals Court held that a landlord who bought a building and received a tenant’s last month’s rent from the former owner had to pay the tenant five percent annual interest on it, and that a leaking sink and loose toilet left unrepaired for months breached the warranty of habitability. This is an unpublished Appeals Court decision under Rule 23.0, which courts may cite as persuasive but not as binding precedent.
What happened
The tenant had rented an apartment in a four-unit building in Lowell since 2013 and paid last month’s rent to the former owner when he moved in. In October 2021 the former owner served a notice to quit. In November 2021 the new landlord bought the building, then filed a no-fault eviction. The tenant counterclaimed under G.L. c. 239, § 8A, for unpaid interest on last month’s rent, breach of the warranty of habitability, and unfair practices under G.L. c. 93A. The new landlord admitted he received the last month’s rent from the former owner and never notified the tenant he was holding it. A checklist the parties signed in November 2021 listed a leaking kitchen sink and a toilet that moved and needed caulking; the landlord called these cosmetic and did not repair them until April 2022, after a board of health visit. The Housing Court ruled for the landlord on possession and did not address the interest claim.
What the court decided
In Goncalves v. Caustrita, No. 23-P-755 (Mass. App. Ct. February 5, 2025) (Rule 23.0 decision), the Appeals Court reversed in part, vacated the rest of the judgment, and sent the case back to the Housing Court.
Interest on last month’s rent. G.L. c. 186, § 15B (2) (a), requires a landlord who holds last month’s rent to pay the tenant interest at five percent per year, or the lesser amount the bank actually paid if the money was held in a bank. The tenant testified that he never received interest from either owner. The landlord admitted he received and held the money. Because the tenant’s evidence was uncontroverted, the court held that the tenant proved a violation. The court did not decide whether a landlord must keep last month’s rent in a bank account, and it did not reach whether the former owner, rather than the buyer, owed the interest under § 15B (7A), because the landlord never raised that argument.
Warranty of habitability. Not every sanitary code violation breaches the warranty. Minor violations, without more, may not. South Boston Elderly Residences, Inc. v. Moynahan, 91 Mass. App. Ct. 455 (2017). But here the landlord knew about the leaking sink and moving toilet from November 2021 and left them for months. The court held those conditions breached the warranty and were not promptly repaired, citing Ndoro v. Torres, 105 Mass. App. Ct. 128 (2024), where a landlord left known defects unrepaired for months. The Housing Court must now decide the tenant’s damages.
Chapter 93A and possession. Because the trial judge never reached the interest claim and found no habitability breach, the judge never decided whether either violation was also an unfair practice under Chapter 93A. The Appeals Court sent that question back. A habitability breach can support a Chapter 93A claim. See Ndoro, 105 Mass. App. Ct. 128. Under § 8A and Ferreira v. Charland, 103 Mass. App. Ct. 194 (2023) (en banc), if the amount the landlord owes the tenant equals or exceeds what the tenant owes, the landlord cannot recover possession. The court did not reach the tenant’s argument on that point, but it vacated the judgment for the landlord and sent the case back.
The court declined to award appellate attorney’s fees for now. The fee provision tied to last month’s rent interest applies when the landlord fails to pay within thirty days after the tenancy ends, and the tenant was still living in the apartment.
What this means for you
If your building changes hands, your last month’s rent does not disappear. A new owner who receives it from the old owner takes on duties with it, including paying you interest. Unpaid interest can become a counterclaim if you are evicted.
A leak or a loose toilet the landlord knows about and ignores for months can be a breach of the warranty of habitability. Those claims can reduce what you owe and, if large enough, defeat a claim for possession.
What to do now
- Find your receipt for last month’s rent and any security deposit, and note the date you paid.
- If your building is sold, ask the new owner in writing to confirm they are holding your last month’s rent and to pay the interest owed.
- Report repair problems in writing, and keep copies of move-in checklists and inspection reports.
- If you receive a notice to quit or an eviction complaint, raise these claims in your answer and counterclaims.
If this is your situation, call Doubleday Law at (617) 575-2006 or tell us what happened. Housing Court deadlines are short.
