Massachusetts Security Deposit Laws

Landlords and tenants in Massachusetts have certain legal responsibilities. One such responsibility is abiding by the Massachusetts security deposit law. The MA Gen L ch 186 § 15b is the piece of legislation that regulates the collection and return of security deposits.

As a landlord, you should clearly state these tenants' security deposits expectations in the valid written lease agreement. It's important for a landlord to be very familiar with how to handle a tenant's security deposits, or it can result in court costs and attorney's fees. The following is everything each landlord needs to know regarding the security deposit law.

How much can landlords in Massachusetts charge their tenants for security deposits?

Massachusetts landlord-tenant law states that a landlord can only charge their tenant a maximum of one month’s rent as a security deposit. If the monthly rent is, say, $1,500, then the maximum you can request as a security deposit is $1,500.

Additionally, under the Massachusetts security deposit law, you may also request the tenant to pay you the last month’s unpaid rent, as well as payment for the purchase and installation of a key and lock.

Is there a special requirement on how landlords must store their tenant’s deposit in Massachusetts?

Yes, there is a way for a landlord to store a the money from a security deposit at a bank. A landlord must store the money from a tenant’s security deposit in an interest bearing bank account.

Furthermore, a landlord must not commingle the security deposit in a bank account with other funds. It should be stored in a separate account. You must also pay your tenant an annual interest rate of either 5% or pay interest of the separate account.

A landlord may then either pay interest to the tenant directly or, with their permission, deduct it from the next rent payment. If the rental agreement is terminated early, for whatever reason, you must provide your tenant with the remaining unpaid interest that has accumulated on their security deposit no later than 30 days after moving out.

Every year, a landlord must also provide your resident with a written statement that indicates the following regarding security deposits.

• The name and address of the financial institution where you’ve stored the tenant's security deposit.
• The rate of interest the deposit is earning.
• Dollar amount of security deposits.
• The interest bearing account number where you’ve stored the deposit.

Do landlords in Massachusetts have to provide their tenants with a written notice after receiving their deposit?

Some states require this of a landlord, and Massachusetts is one of them. A landlord must provide their tenant with three types of notices.

The first notice to provide them is immediately you receive their security deposit. The written notice of the security deposit receipt must indicate certain important things regarding security deposits. Such as, the exact cost of the security deposit received, the date it was received, the description of the unit being rented, and the signature of the landlord.

You must then provide another statement indicating the property’s condition after 10 days. The statement must include all the existing damage to the property. However, if the tenant doesn’t agree with the list, they must specify which parts they disagree with and sign the document. They must do that within 15 days of receiving the statement.

Lastly, a landlord must provide the tenant with another notice 30 days after the day they received the deposit. You must notify your tenant about the name, address, and the rate of interest the amount is accruing at. If a landlord fails to do any of this, the tenant would be entitled to a full refund of their security deposit immediately.

Do landlords in Massachusetts have to keep records of their residents’s security deposit?

Yes! You are required by the Massachusetts security deposit law to keep records of any security deposit you collect from a tenant. The record should include the following details.

• Any details of damages done to the unit.
• The date the lease ended.
• In case of deductions, the date the repairs were done and their approximate costs.
• Copies of notices served to the tenant in regards to the deposit.

You must make such records available to the tenant as long as the request is made during normal business hours. If you fail to do so, your tenant may be entitled to the return of their entire security deposit plus any accrued interest.

Can a landlord in Massachusetts withhold part or all of their security deposit?

Yes. A landlord can keep part or all of their tenant’s deposit under certain situations. The acceptable situations in Massachusetts are as follows.

• Unpaid rent.
• Unpaid utility bills.
• Any unpaid rental taxes that the tenant was liable for paying.
• Damage exceeding normal wear and tear.

But what is normal wear and tear exactly? Massachusetts defines it as the normal deterioration that a rental undergoes due to normal use. Examples include scratched glass, stained bathroom fixtures, faded wall paint, or loosened door handles. The landlord is responsible for fixing such kinds of damages.

Excessive damage occurs as a result of negligence or carelessness on the part of the tenant. These are serious issues and include things like broken windows, broken tiles, missing fixtures, and pet damage.

The tenant is responsible for fixing such kinds of damages. And if the security deposit isn’t sufficient to cover the damage, you may also have the option to sue the tenant.

When must landlords in Massachusetts return their tenant’s deposit?

The landlord must return the security deposit of the tenant after any potential deductions made, within 30 days after a tenant moves out. If you’ve made any deductions, you must provide the tenant with a list of deductions.

What happens to the deposit if you choose to sell the property?

In the instance that the rental sells, you must transfer the security deposit plus any accrued interest to the new owner. The incoming landlord would then assume the responsibility of storing the deposit and notifying the tenant.

The incoming landlord would have a maximum of 45 days to do so. In the notice, they would need to state their name and address, and how much deposit they have received.

Bottom Line

Howzer Property Management can help you experience all the benefits of rental ownership without the headache. We service the areas of Plymouth and the surrounding areas. Get in touch to learn more about our proven management services!

Disclaimer: This blog isn’t a substitute for professional legal advice from a qualified attorney. Laws change and this blog may not be a substitute for professional legal advice. For expert advice, Howzer Property Management can help.