Security Deposits in Massachusetts – Rules That Every Landlord Needs to Know
Massachusetts General Law Chapter 186, Section 15B is the statute that sets forth the guidelines that a landlord must follow when taking a security deposit from a tenant. Every landlord should read G.L. c. 186, §15B and follow its procedures very carefully. The following are a few of the rules that a landlord must follow when taking a security deposit from a tenant:
- Give a Receipt. Give the tenant a receipt that shows the amount of the security deposit, date received, description of the premises and the name of the person receiving the security deposit.
- Holding the Security Deposit. Within 30 days of receipt, the landlord must deposit the security deposit into a separate, interest bearing bank account that is protected from creditors and the name on the account should make it clear that the money belongs to the tenant. Many banks have an account specifically designed for holding a security deposit. After depositing the security deposit into a qualified bank account, the landlord must give the tenant a 2nd receipt that shows the name and address of the bank where the security deposit is held, the amount of the security deposit and the account number.
- Statement of Condition. Within 10 days of the beginning of the tenancy, the landlord must give the tenant a written and signed Statement of Condition of the premises. The Statement of Condition must identify all damage to the premises, including damage in any common areas. The landlord should refer to G.L. c. 186, §15B(2)(a) to make sure that the Statement of Condition includes the required notice and disclosure language. The tenant will have the opportunity to review the Statement of Condition and may identify additional damage. The landlord is entitled to, in writing, either agree or disagree with the tenant’s additional statement of damage.
- Payment of Interest. The Landlord is required to pay the tenant the interest accrued on the security deposit at the end of each year and must provide the tenant with a receipt indicating the amount of interest paid.
- Conclusion of the Tenancy. At the conclusion of the tenancy the landlord must, within 30 days, either return the entire security deposit to the tenant (with interest) or provide the tenant with an Itemized List of Damages if he/she wishes to retain any portion of the security deposit. The landlord may only keep the security deposit to pay for unpaid rent or water charges, unpaid taxes or damage to the premises and G.L. c. 186, §15B(4) sets forth very explicit procedures that must be followed in order for a landlord to retain any portion of the security deposit. Specifically, if a landlord wishes to retain any portion of the security deposit, he/she must send the tenant, within 30 days, an Itemized List of Damages that: a) is signed under the penalties of perjury, b) itemizes in in detail the nature of the damage to the premises and the repairs necessary to remedy the damage, and c) includes written evidence of the alleged damages such as written invoices, bills, receipts or estimates to repair the damage.
Most violations of G.L. c. 186, §15B will require the landlord to immediately return to the security deposit to the tenant; however, the following three (3) violations will subject a landlord to treble damages and attorneys’ fees:
● The landlord fails to deposit the security deposit into a qualified separate interest bearing bank account.
● The landlord fails to return the security deposit at the conclusion of the tenancy and/or fails to provide the tenant with a Statement of Damages and all of the requirements.
● The landlord fails to transfer the security deposit to a new landlord or successor in interest.
-By Benjamin Kafka