As a landlord in Massachusetts, it is extremely important to understand and abide by MA rental security deposit law. There are some very specific rules and guidelines to follow. Here are a few key aspects of this law.
Amount & Receipt of MA Rental Security Deposits
According to MA rental law, security deposits may not exceed one month’s rent. Landlords must provide tenants with a receipt and also notify the tenant of where the funds have been placed. Security deposits should be held in an interest-bearing escrow account at a Massachusetts bank. This should be done within 30 days.
On a yearly basis, the interest earned from the security deposit must be paid to the tenant. This can be done as a separate check or a reduction in the ren. The interest should equal 5% or the actual percentage earned in the account. It is extremely important that landlords not forget this important step every single year.
Return of Security Deposits
Security deposits must be returned to tenants within 30 days of termination of the tenancy. That last payout must also include any interest earned from the last payout period to the termination date. If the landlord is retaining any part of the security deposit for damages, a detailed list of the charges along with receipts must be included. Landlords may only deduct for actual expenses incurred to repair damages. They should not use arbitrary figures or estimates. This information along with the remaining balance of the deposit must be returned within 30 days.
Importance of Following MA Rental Security Deposit Law
Failure to comply with the MA rental security deposit law can have dire consequences. For example, tenants can be awarded triple damages for a landlord not placing security deposit funds into an interest bearing escrow account at a MA bank. Not paying out interest on a yearly basis could jeopardize a landlord’s rights when it comes to evicting that same tenant. Massachusetts leans heavily towards protecting tenants’ rights. It is not considered a very landlord friendly state. A landlord’s best chance to avoid penalties and retain landlord rights is to follow all laws entirely, especially when it comes to handling security deposits. For additional information on MA landlord and tenant laws, visit the MA.gov website.