By statute in Massachusetts a Security Deposit may not be more than the first month's rent, but a Landlord may also take a last month's rent. Mass. General Laws c. 186, s. 15B provides that the Landlord must (a) give a receipt for the Security Deposit (as well as for any last month's rent), (b) give a Condition Statement for the rented premises, (c) inform the Tenant of the Tenant's right to interest on the security deposit, (d) promptly put the Security Deposit in a separate interest-bearing account in a Massachusetts bank under "protective" terms, and (e) provide the Tenant with details on the deposit and the account. Terms of the account must protect the funds from the Landlord's creditors and a Trustee in bankruptcy. The statute includes mandatory details for each step and must be followed in detail.
How much may the Landlord retain from the Security Deposit?
The Landlord may deduct for unpaid rent and, under certain circumstances, for unpaid water charges and real estate tax increases. The Landlord may also deduct a reasonable amount to repair damages for which the Tenant is responsible, over and above reasonable wear and tear. No amounts may be deducted for damages unless within 30 days of when the lease term ends or the Tenant vacates Landlord gives tenant a signed and sworn statement detailing the damages and the repairs with estimates or invoices attached.
When should the Security Deposit be returned?
No later than 30 days after the Tenant vacates or the lease term ends the Landlord must refund the security deposit or the balance owed and must also give the sworn statement if money is to be retained for damages.
When does the law prohibit a Landlord from retaining the Security Deposit?
The Landlord forfeits the right to retain any part of the Security Deposit for any reason if the Landlord (a) fails to deposit the funds in a protected account, (b) does not timely provide the sworn statement of damages, (c) uses a lease provision that conflicts with the Security Deposit statute and attempts to enforce it, or attempts to get a Tenant to waive any part of the statute, (d) fails to transfer the funds to a successor owner of the rental premises, or (e) does not within the 30 day limit return the balance owed plus any interest owed. If the Landlord violates (a), (d) or (e), above, then Tenant will be awarded lawsuit damages of three times the amount of the security deposit or of the balance owed, plus interest, court costs and a reasonable attorney's fee. MGL. c. 186, s. 15B (6) & (7)
Can a Landlord avoid the requirements of the Security Deposit Law?
The statute makes "void and unenforceable" any provision or rental agreement that conflicts with the statute as well as any waiver of any provision of the statute that might be agreed to by a Tenant or prospective Tenant.
How does this statute apply to a rental for vacation use?
The statute provides that it does not apply to rentals of 100 days or less for vacation or recreational purposes.
Taking a Security Deposit for a Massachusetts residential rental imposes detailed statutory requirements, including others beyond those mentioned above. Regulations of the attorney general also apply. Some Landlords choose to take only a last month's rent and thereby avoid most of these requirements. Others should consult with an attorney or at least carefully read the statute which is M.G.L. ch. 186, s. 15B where one can find the specific details for each step mentioned above and other matters such as records keeping requirements for a Landlord who takes a security deposit.
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