There are many ways in which landlords can cross the line and get into serious trouble with their tenants, but perhaps the easiest is by misappropriating their security deposit. Many landlords collect a security deposit to ensure that there are funds available to repair any damage caused by a residential tenant or to recover unpaid rent at the conclusion of the tenancy. Although this practice may have its advantages, it is important to be sure that you are complying with the laws regarding security deposits. According to the Massachusetts Security Deposit Statute, M.G.L. 186 §15B, a landlord may accept a security deposit provided it does not exceed the amount of the first month’s rent. All Massachusetts landlords collecting a security deposit for a residential property must comply with the following minimum requirements:
The landlord must provide the tenant with a written receipt. The receipt must state the following information:
- amount of money received;
- name of the landlord, name of the person receiving the deposit and the date the money was received;
- address of the leased premises; and
- name, location of bank and account number.
Statement of Conditions
Within ten (10) days of receiving the security deposit, the landlord must give the tenant a “Statement of Conditions” relating to the condition of the apartment at the time the tenant moved in.
The law requires the landlord to pay 5% interest per year or the actual interest it accrued. Interest must be paid on the anniversary of the inception of the tenancy and within 30 days after the tenant vacates
Return of the Security Deposit
A security deposit must be returned to the tenant within 30 days after the tenant vacates the property unless it is being applied to unpaid rent or to repair damages caused by the tenant that exceeds normal wear and tear. If the landlord deducts any amounts from the security deposit, a detailed statement must be sent to the tenant within the 30-day period indicating each deduction. The statement must be signed by the landlord under the pains and penalties of perjury. If the landlord identifies necessary repairs, the repairs must not be for a condition that was listed on the original condition statement and may not be for routine, painting, cleaning, new locks and minor carpentry.
Having a security deposit available to the landlord to clear a balance of unpaid rent or to repair damages caused by a tenant can be a significant cost-saving measure. However, savings can only be achieved through strict compliance with the statutory requirements governing security deposits.