What Landlords Need To Know About Massachusetts Security Deposit Laws

Are you sure you’re following the law with your tenant’s security deposit? Because if you’re not, it could cost you three times the amount, plus legal fees. Most landlords I talk to feel confident about their rental paperwork. However, when we delve into the details of Massachusetts Security Deposit laws, something is often missing, and that’s where the risk arises.

If you don’t follow the rules by the book, your tenant can take legal action, and you could end up owing triple the deposit amount. It happens more often than you’d think, and it’s completely avoidable if you know what to do.

Here’s a breakdown of what every landlord needs to know to stay compliant:

The deposit can’t exceed one month’s rent. Massachusetts law caps the security deposit at one month’s rent. If you collect more than that, you’re out of compliance from day one. This is a hard limit, not a guideline.

When you prepare your lease packet, there are three key documents you need to include:

• An apartment condition statement
• A rent and security deposit receipt
• A W-9 form completed by one of the tenants

Here’s everything you need to know to protect your investment and set the foundation for a legally sound lease:

1. Once you have collected the deposit and W-9, visit a Massachusetts-based bank and open an interest-bearing account. It also needs to be in the tenant’s name, with you listed as the caretaker. Once that account is set up, you’re required to provide the tenant with the name of the bank and the account number within 30 days.

2. Make sure the apartment condition report is completed. Within 10 days of move-in, your tenant should go through the unit and complete the apartment condition statement. This protects both sides from disputes over pre-existing damage.

3. Don’t forget about interest payments. If your tenant stays longer than a year, the accrued interest on the deposit must be returned to them within 30 days after the end of the first year. This applies again at the end of each lease term. Once the lease ends and your tenants move out, timing matters. You have 30 days to either return the full security deposit or send a detailed list of any damages, along with the remaining amount. If you miss that deadline or skip the paperwork, you’re opening yourself up to legal trouble, and it’s not something the courts take lightly.

If you’re not 100% sure you’ve covered everything, it’s worth having a quick conversation. I’ll help you review your process, avoid penalties, and stay protected under Massachusetts law. Call or text me at (857) 210-9925 or email Lou@c21revolution.com. Let’s ensure your rental process is seamless from start to finish.