Supreme Judicial Court of Massachusetts, Middlesex
James M. RYAN, Executor,, 
MARY ANN MORSE HEALTHCARE CORP.
September 9, 2019.
N.E.3d 712] Assisted Living Residence . Landlord
and Tenant, Security deposit. Consumer Protection
Act, Availability of remedy, Landlord and tenant.
ACTION commenced in the Superior Court Department on August
24, 2016. A motion to dismiss was heard by Christopher K.
Supreme Judicial Court on its own initiative transferred the
case from the Appeals Court.
N. Garick, Woburn, (Matthew T. LaMothe, Salem, also present)
for the plaintiff.
Nguyen, Worcester, for the defendant.
following submitted briefs for amici curiae:
M. Desmond & Justin L. Amos, Boston, for Massachusetts
Assisted Living Association.
Lillian Glickman, pro se.
A. Aniskevich & Susan A. Silverstein, of the District of
Columbia, Richard M.W. Bauer, Liane Zeitz, & Rebecca J.
Benson, Boston, for AARP & others.
Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.
N.E.3d 713] 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 A.L.R. in Framingham
that charges new residents an upfront "community
fee," in addition to the first months rent and the last
months 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 A.L.R.s are not subject to G. L. c. 186, § 15B.
The motion to dismiss was granted, and the plaintiff
conclude that G. L. c. 19D, the A.L.R. 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
relationships. Indeed, the A.L.R. 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, A.L.R.s 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 A.L.R. charges
upfront fees that are not used to fund such distinct assisted
living services, it does so in violation of § 15B.
instant case, further factual development is required to
determine whether the fee at issue was permissibly charged
and used for services distinct to A.L.R.s, and thus the
motion to dismiss was not properly allowed. One or more
components of the defendants community fee appear to have
been charged for initial assessments mandated by the A.L.R.
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 required, particularly for the
replacement reserve fee for building improvements. We cannot
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 [135 N.E.3d 714] allowing the motion to dismiss and
remand the case to the Superior Court for further proceedings
consistent with our decision.
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, 113 N.E.3d 329 (2018). We summarize the factual
allegations as set forth in the complaint and the residency
agreement referenced by both parties. See Marram v.
Kobrick Offshore Fund, Ltd., 442 Mass. 43, 45 & n.4, 809
N.E.2d 1017 (2004).
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
defendants A.L.R. in Framingham. The agreement, titled
"Residency Agreement," provided that Heritage
"hereby leases to the Resident" an apartment at the
rent was $4,000 per month. Prior to the commencement of
Ryans residency, Heritage required her to pay the first and
last months rent. In addition to the first and last months
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 Residents
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 the Resident annually in keeping with the Landlord/Tenant
Law Chapter 186, Section 151B(2)(a)."
2016, James Ryan, the executor of Julia Ryans 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 plaintiffs complaint, claiming that, as an A.L.R., 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 A.L.R.s to
be subject to the security deposit statute. The plaintiff
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 A.L.R.s. [135 N.E.3d
715] See Gowen vs. Benchmark Senior Living LLC, Mass.
Super. Ct., No. 1684CV03972-BLS2, 2017 WL 3251585
(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 A.L.R.s, 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
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 v. Brookdale Senior Living
Communities, Inc., Mass. Super. Ct., No.
1784CV04215-BLS2, 2018 WL 4427020 (Suffolk County Aug. 1,