You’ve just found the perfect apartment, and you’re ready to sign your new lease. On top of the first rent payment, you probably owe your landlord a security deposit. Your landlord will hold it to pay for any damage to your apartment during the term of your lease. If you leave your apartment in good condition when you move out, you’ll get your money back.
Security deposits are designed to protect your landlord, but Massachusetts law also protects you. Here’s what you need to know:
Each Security Deposit Must Be Held in a Separate, Interest-Bearing Account
The law regarding security deposits in residential tenancies (Mass General Laws c.186 §15B) specifies that the security deposit cannot exceed the amount of the first month’s rent. The law also requires your landlord to deposit your security deposit in a separate, interest-bearing account in a bank located within Massachusetts.
Within 30 days after receiving your deposit, your landlord must give you a receipt indicating the name and location of the bank, as well as the amount of the deposit and the account number. If your landlord fails to comply with these requirements, you are entitled to receive back your security deposit immediately.
The security deposit belongs to the tenant. The landlord is not allowed to co-mingle the security deposit with her or his own funds. This is an essential safeguard for you, the tenant. If the security deposit were combined with your landlord’s accounts or assets, it could be subject to claims by any of your landlord’s creditors, and your money could be lost.
At the end of each year, your landlord must provide you with a bank statement showing the amount of the deposit and the total interest that accrued during the year. The accrued interest must either be paid directly to you or deducted from your next rental payment.
When Your Lease Begins, Your Landlord Must Provide a Written Statement of the Apartment’s Condition
When you move in, your landlord must provide you with a separate written statement that lists any existing damage to your apartment at the commencement of your lease. You have the option to either (a) sign the statement or (b) if you disagree, provide a separate list of damages. The law specifies what must be included in the statement of damages.
At the end of your lease, the statement of damages becomes the basis for determining whether your landlord can deduct from your security deposit a reasonable amount necessary to repair any damages attributed to you. All such deductions must be backed by itemized details of the damage, repair estimates, and invoices for repairs. Note that this does not apply to any damages that were identified on the statement you signed at the beginning of your tenancy. That’s why you should carefully review the statement of damages at the outset of your lease.
If your landlord fails to comply with this law, he or she risks paying heavy penalties. Tenants can be awarded damages as high as triple the security deposit, plus interest at the rate of 5 percent, as well as reasonable attorney fees and costs. That’s why, for both residential tenants and landlords, it’s well worth your time to know your rights and obligations regarding security deposits.
