In Mass., landlords can ask for two different types of deposits: a security deposit and last months rent. These deposits must be handled in a very specific manner to comply with the law. An overview of the MA laws on rental deposits is provided below.
Property Condition Statement
Within ten days of accepting security deposits for MA rentals, landlords must furnish tenants with paperwork that detail any existing issues. Tenants must be granted a fifteen day period to review and note any changes to that document. A final version should be provided to both parties. This form should be referred to after tenants vacate the property and can be the basis for any repair claims for which the landlord might deduct money from the security deposit.
Receipt and Location of Funds
All deposits must be held in a Mass. interest earning account. They should also be shielded from creditors of the landlord in an escrow or equivalent account. Many financial institutions provide products for this specific purpose. The account can include the personal information of the tenant (for interest reporting purposes). Landlords must write out a receipt and give information on the bank where the funds are held.
Interest Funds and Returning Deposits
Every 12 months, interest must be given to the tenant. This may be performed by writing a check from the landlord or deducting it from rent for a particular month. After a tenant has moved out, landlords must pay back security deposits within 30 days. The landlord may withhold amounts for repairs (except normal wear and tear) to the apartment or any unpaid rent. This should be itemized in a statement to the tenant. For damages, include figures for every item.
MA Laws On Rental Deposits
The above is only an overview of MA laws on rental deposits. Particular situations will differ and it might be prudent to receive legal guidance. Be sure to call a local attorney who is familiar with Mass. laws. Information on landlord tenant laws may also be found on the Mass. government website at http://www.mass.gov/ocabr/consumer/housing/tenant-and-landlord.