In Massachusetts, landlords may require two types of deposits: security deposits and last months rent. These funds must be processed in a particular way. A summary of the MA rules on tenant deposits is offered below.
Property Condition Statement
Within 10 days of receiving security deposits for MA rentals, landlords should furnish tenants with a statement that itemize any existing damages. Tenants should be allowed 15 days to verify the information. A corrected version should be provided to both landlord and tenant. This form will be used at the end of the tenancy and will be the basis for withholding a portion of deposits.
Receipt and Location of Funds
All deposits (both security and rent) must be placed in a Massachusetts interest bearing account. They should also be protected from creditors of the landlord in an escrow or equivalent account. Many financial institutions offer products for this particular purpose. The account can contain the social security number of the tenant (for tax reasons). Landlords must provide tenants with a receipt for deposits and information on where the money are being held.
Interest and Return of Deposits
Every 12 months, interest earned from deposit funds must be issued to the tenant. This may be done by issuing a check from the landlord or as a reduction in rent for a particular month. After a tenant has vacated, landlords must return security deposits within 30 days. The landlord may withhold money for damages (not counting normal wear and tear) to the rental unit or any unpaid rent. This should be itemized in a list and provided to the tenant. For damages, provide estimates for every item.
MA Rules On Tenant Deposits
The above is only an overview of MA rules on tenant deposits. Particular scenarios can vary and it may be important to obtain legal advice. In such cases, be sure to contact a local attorney who is familiar with Massachusetts rules. Information on landlord tenant laws can also be found on the Massachusetts government website at http://www.mass.gov/ocabr/consumer/housing/tenant-and-landlord.