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Is the tenant owed 5% per year on the last month's rent (not security deposit) in MA?

Boston, MA |

As a landlord, I didn't deposit the last month's rent in a interest bearing account since banks are not giving interest anymore. I just put the money into my regular checking account. So, do I owe the tenant 5% anyways?

Again, this is about the last month's rent and not the security deposit.

Thanks.

Attorney Answers 4

Posted

If you put the rent in your pocket.... In this case a checking account... That you use regulaly.... even if you had the balance sitting there....Then yes, you owe them 5%. If you out it in a checking account that you didn't use, other than to hold this money.... Then you owe them the interest that accumulated. The law reads in relevant part "...statement indicating that the tenant is entitled to interest on said rent payment at the 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 payable..." See mgl 186 section 15b subsection 2a. Good luck.

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4 comments

Asker

Posted

Thanks so much for the response! It was confusing since I haven't found a bank that has a interest bearing account so I just used a my regular checking account. I wonder if there are any banks that have interest bearing accounts for this purpose in MA.

George M. Megaloudis

George M. Megaloudis

Posted

Some small local banks have interest bearing checking accounts.. You can also use a savings account to hold the money as an alternative to a checking account.

Asker

Posted

Alright, I'll look more closely at local banks then. Is there a reason for giving this 5% of the deposit? I am sure there is a good reason, but I am just curious about this law.

Asker

Posted

I guess the other question is that is it best to give the 5% back to the tenant at the end of the yearly lease or when the tenant actually leaves. For example, tenant renews the lease for a additional year and the landlord pays the whole amount after 2 years when the tenant is leaving.

Posted

Notwithstanding the fact that banks are only paying minimal interest, this is a very serious infraction on your part, regardless of your intent. You could be held liable for triple damages, attorney's fees and costs.

Consult an experienced landlord tenant attorney at once.

No attorney-client relatonship is created in responding to this question, and advice provided is based solely on very limited facts presented, and therefore may not be correct. You are advised that it is always best to contact a competent and experienced with the practice of law in the county in which you reside, particularly as it relates to family law, child support, custody and visitation (a/k/a "parenting time") issues, including 209A abuse-prevention restraining orders (a/k/a "ROs" in legal-speak), regarding un-emancipated children, under the age of 22.

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Posted

Yes. Also, if you don't know the answer to that, chances are that you haven't complied fully with 186 s15B and you should consult with an attorney to avoid getting sued.

Do you want accurate, personalized, legal advice that you can rely on? You will have to hire an attorney, not ask on Avvo. I am not your attorney and am not creating an attorney-client relationship by this post. I am therefore giving only general advice. This advice may not apply to you or your situation; may not take account of all possibilities, and may not match the advice I would give to a client. DO NOT rely on this advice or any other advice on Avvo to make your legal decisions. If you want an answer to a legal question you should retain an attorney who is licensed in your state.

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Posted

Yes! For all the reasons that have been stated. I would also reinforce, get a landlord tenant lawyer to handle this for you, because honestly if you didn't handle this part correctly, you probably made other more critical mistakes that could open you up to large awards for the tenant and you could end up paying the tenant's attorney's fees as well. I recently settled a case with a landlord who was looking at paying a $7500 award to the tenant and a $22,000 attorney's fee award if we had gone to trial.

These are generic informational answers, not to be construed as legal advice or creating an Attorney client relationship. If you have a legal issue, you should always consult an Attorney in your jurisdiction. You wouldn't ask a surgeon to talk you through a heart transplant via email, don't expect to do the same with a legal matter.

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