Massachusetts General Laws, chapter 186 section 15 b sets forth, very clearly, the law relating to security deposits. From what you have provided thus far, you may do well to familiarize yourself with these provisions. If you have violated any of these privisions, you would do well to 1. Try and negotiate a resolution, cutting your losses or 2. Engaging counsel to handle the matter for you. Landlord/Tenant law is rife with pitfalls for the unwary. I hope this helps. Best of luck to you.
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It sounds like you may have violated some basic requirements under the law governing security deposits, and as such, could be liable for not only triple damages, but court costs and attorney fees as well. As previously mentioned, it may be in your best interest to attempt to settle your tenants claim. Unfortunately, the fact that you did not follow the rules set in place under the security deposit law will probably outweigh the fact that your tenants broke the lease 6 months early.
Legal disclaimer: The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author (who is only admitted to practice law in the Commonwealth of Massachusetts). For specific advice about your particular situation, consult your own attorney
You appear to be in small claims. That is an excellent position to be in as a defendant, as you will not end up paying more than $7,000 and if you are unhappy with the result you can appeal to a judge. If you win in small claims, the plaintiff has no right to appeal.
You may want to consult with an attorney who can either help your formulate your arguments or go with you to the small claims appearance. If you need to appeal the window of time to do so is very minimal, so try to have an attorney lined up to handle that issue before your small claims case.
On the legal aspect, remember that small claims magistrates are often looking for fairness. You tenants moved out early, presumably not paying you the rent for the remaining time. A landlord is entitled to withhold the security deposit as against unpaid rent, but should exercise care and caution when doing so. Were you able to find new tenants immediately? Did the apartment go unrented for a period of time? Did you diligently look for new tenants? Did they trash the apartment?
John L. Fink is an attorney licensed to practice in Massachusetts and can be reached at 978-655-1162 ex 12. Answers are for educational purposes and no attorney-client relationship is formed by providing an answer to your question. The information provided should NOT be relied upon for making legal decisions. You will be best served by hiring an attorney in your area.
It appears that you violated the security deposit law. Look at the statute, but I believe that you are supposed to return the deposit upon demand with 5% interest if not placed in an account. My best advice is to return the deposit and interest as soon as possible to avoid further costs and then make sure that you file a counterclaim for the balance of the lease (presuming that you mitigated your damages). You are correct that C. 93A requires that a demand letter is sent at least thirty days prior to suit.