In Massachusetts, landlords can require two different types of deposits: a security deposit and last months rent. These funds must be processed in a particular manner. An overview of the MA guidelines on rental deposits is provided below.
Statement of Property Condition
Within ten days of accepting security deposits for MA apartments, landlords must furnish tenants with a statement that detail any pre-existing damages. Tenants must be granted fifteen days to confirm the information. A corrected list should be given to both parties. This document will be referenced at the end of the tenancy and will be the basis for any damage claims for which the landlord may withhold funds from the security deposit.
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 specific purpose. The account can contain the personal information of the tenant (for tax purposes). Landlords must write out a receipt and provide information on the bank where the money is being deposited.
Interest and Returning Funds
At the end of each year, interest must be given to the tenant. This may be done by writing a check from the landlord or deducting it from rent for a given month. After a tenant has moved out, landlords must pay back security deposits to tenants within 30 days. The landlord may deduct amounts for damages (not counting normal wear and tear) and unpaid rent. Monies withheld should be detailed in a list and provided to the tenant. For repairs, a list of specific damages should be included along with repair estimates.
MA Guidelines On Rental Deposits
The above details are simply an overview of MA guidelines on rental deposits. Particular situations can vary and it might be prudent to receive legal advice. Be sure to call a lawyer who is familiar with Massachusetts guidelines. Additional information may also be found on the Massachusetts website at http://www.mass.gov/ocabr/consumer/housing/tenant-and-landlord.