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Security Deposit and Landlord's Responsibilities

Produced by Maureen McDonagh
Last Updated May 2017

If your landlord charges you a security deposit, last month’s rent or both, she must:

  1. Give you written receipts.
  2. Give you a statement that describes the condition of your apartment, if she takes a security deposit.7
  3. Keep your security deposit in a separate bank account.
  4. Pay you interest every year on both your security deposit and last month’s rent.8
  5. Keep records of security deposits and repairs.9
  6. Return your security deposit to you at the end of your tenancy if there is no damage and your rent is paid.
  7. Return your security deposit to you if she fails to follow the security deposit law.

1. Written Receipts

The most important step you can take when you move in is to get a complete receipt from your landlord that spells out all the money you gave her and what it is for.

Only give your landlord cash if she gives you a receipt right away. If the landlord refuses to give you a written receipt, use Security Deposit Receipt and Last Month’s Receipt (Form 4).

You should get 3 kinds of receipts from your landlord. They must all be written.

  • 1st Receipt: She must give you a written receipt when you give her your security deposit or last month’s rent.10
  • 2nd Receipt: She has 30 days to put your security deposit in a bank and give you a 2nd receipt. This receipt must say where your security deposit is.11
  • 3rd Receipt or Statement: Every year she must give you a statement with the amount of interest you are owed on your security deposit and last month's rent.12

Each receipt or statement about your security deposit or last month’s rent must include:

1st Receipt
for security deposit or last
month’s rent
Security Deposit Last Month's Rent
Amount of money received
Date money was received
What the money is for
Name of landlord
Name of person you
give the money to if different
from landlord
Statement that you
are owed interest on the
money
Statement that you should
give a forwarding address
so landlord can send you
interest when you move
 
2nd Receipt
within 30 days
for security
deposit in a
Mass bank
Security Deposit Last Month's Rent
Location and name of bank where your money is No receipt required
Account number of the fund where your money is  
3rd Receipt or Statement at the end of each year for security deposit or last month’s rent Security Deposit Last Month's Rent
Statement of the amount of interest you are owed on your deposit

If the landlord does not give you a receipt with this information at the right time, you have the right to get your security deposit back. See Getting Your Security Deposit Back.

6. Statement of Condition

As soon as you move in, examine the rental unit right away. If anything is not in good condition, make notes about it and take photos. Make sure to put a date on your notes and photos.

If your landlord charged you a security deposit, she has 10 days to give you a description of your rental unit’s condition. This description must be in writing. It is called a “Statement of Condition.”

This Statement must list all the existing damage in your apartment when you move in. It must also cover the common areas of the place you are renting. Its purpose is to prevent disputes between you and your landlord when you move out. The statement makes clear the damage already there when you moved in. Your landlord must also sign this Statement.

Read the Statement of Condition carefully. Take time to walk through the apartment with the Statement. Use Housing Code Checklist (Booklet 2) to help you understand what the law requires.

If a landlord writes on the Statement of Condition that there are no bad conditions, make sure this is true. If there are things that are not in good condition, write them on the landlord’s Statement so it describes the real condition of the place.13 Add even small defects to your list like holes in the walls and windows that do not work well. This is to protect you when you move out.

You can also use our Statement of Condition (Form 3) and attach it to the landlord’s “Statement.”

a. Send the Statement to the Landlord

You have 15 days after you get the landlord’s Statement of Condition to send it back. You can:

  • Make no changes to the “Statement,” sign it and send it back.
  • Make changes, attach your own statement, notes and photos, sign it and send it back.

If you do not send it back within 15 days, it means you agree completely with the landlord’s Statement.

If you send your landlord a Statement of Condition with your own list of problems, your landlord must return a copy within 15 days. The landlord must say if she agrees or disagrees with what you wrote. And she must sign this statement too.

Keep a copy of everything you send the landlord.

b. If you do not get a Statement of Condition

If you do not get a Statement of Condition within 10 days of moving and there are serious problems in your rental unit, do your own statement.14 You can use Statement of Condition (Form 3)

Your Statement of Condition is important. It can prevent the landlord from using your security deposit to pay for damage you did not cause.

c. Problems after you move in

If there is a problem with your apartment after you move in, let the landlord know right away and ask her to repair it.

For example, if you move in during August, you might not find out that the heating system is broken until several months later.

It is OK to call, but also send a letter or email.

Keep a copy of the letter or email so you can always prove that you notified the landlord about a problem.

7. Separate Bank Account

a. Security Deposit

A security deposit is your money that the landlord is holding.15 If your landlord charged you a security deposit, she must keep your security deposit in a bank account in Massachusetts.16

The account must be separate from the landlord’s money. The name on the account must make it clear that the money does not belong to the landlord. The bank account must also be protected from creditors.17

If a landlord fails to keep your money in a separate account protected from creditors, you have the right to sue your landlord for 3 times the amount of your deposit.18 See Getting Back Your Security Deposit.

b. Last Month’s Rent

If your landlord charged you last month’s rent, she does not have to put it into a separate account. But once a year she must still pay you interest owed on it.

8. Payment of Interest

If your landlord charged you a security deposit or last month’s rent, she must pay you the interest that the money earns.

a. Amount

The landlord must give you all the interest your security deposit and last month’s rent earn if the bank pays less than 5% interest.19

b. When

Your landlord must pay the interest you are owed on your security deposit and last month’s rent:

  • Once a year, and
  • Within 30 days after you move out.20

c. Yearly payment

After each 12-month rental period, your landlord must send you a statement that tells you:

  • The bank, bank address, and account number that holds your security deposit and,
  • The interest you are owed on the security deposit and last month’s rent.

At the same time, the landlord must either:

  • Give you the interest you are owed, or
  • Explain in this statement that you can subtract the interest from your next rent.21

If 30 days pass after the 12 month rental period and you have not received either the interest or the statement, you may subtract the interest owed from your next rent payment.22 It is a good idea to include a letter with your rent payment that explains you are subtracting this interest from your rent payment.

How to subtract yearly interest from rent payment

You pay a $1,000 security deposit and a $1,000 last month's rent payment. The interest on the account is 1%,

Your landlord must pay you a total of $20 in interest for every year that you rent.

If the landlord does not pay you directly, you may subtract this $20 from your rent payment.

1. If Interest is 1% on Your Security Deposit and Last Month's Rent

$1,000 Security Deposit
x .01 Interest
$ 10 = Amount owed $

$1,000 Last Month Rent
x .01 Interest
10 = Amount Owed

2. Subtract Total Interest Owed from Your Rent

$1,000 Rent

- $ 20 Total interest owed tenant on security deposit and last month's rent payment

$ 980 = Amount of next rent check

d. Moving out

If your landlord does not pay you the interest you are owed on your security deposit within 30 days of the day you move out, or the last day of your lease, you can sue her for 3 times the amount of the interest owed.

If you win in court, you also have the right to have the landlord pay your lawyer’s fees and court costs.23 See How to get your security deposit back.

9. Records of Deposits and Repairs

Your landlord must keep security deposit and repair records for all tenants who have moved in or out in the last 2 years. 24 The records must show:

  • A detailed description of any damage in an apartment when the landlord took a security deposit;
  • When repairs were made; and
  • Receipts and the cost of any repairs.

Anyone interested in renting has the right to see these records during normal office hours.25

If you already paid a security deposit and your landlord refuses to let you see the records, you have the right to an immediate refund of your security deposit.26

10. Returning Your Security Deposit

If you leave your rental unit in the same condition as you found it, the landlord must return your entire security deposit. The security deposit and interest belong to you.

If you have a written lease, a landlord has until 30 days after the last day of your lease to return the deposit, even if you move out before the lease ends.27 If you do not have a written lease, your landlord has until 30 days of when your tenancy ends. See When Can I Get My Security Deposit Back - When your tenancy ends.

11. Following the Law

Your landlord must follow the security deposit law. If she does not, she must return your entire security deposit when you ask for it. The landlord has failed to follow the law if she:

If your landlord does not follow the law, you can ask her to return your security deposit - even if you are still living in the apartment. See Security Deposit Demand Letter (Form 5).

Endnotes

7 . In Tringali v. O’Leary, No. 15-ADMS-1003, Appellate Division of the District Court Department Northern Division (June 30, 2105) the court found that the landlord had violated the provision of the security deposit law that required the landlord to provide the tenant with a written statement of conditions at the inception of the tenancy and had failed to provide the tenant with annual interest on her security deposit. Citing G.L. c. 239, 8A, the court also held that the lower court erred in awarding possession to the landlord where the tenant obtained a money judgment in an amount greater than what the landlord owed her.

8 . See Tringali v. O’Leary in endnote 7, where landlord failed to provide the tenant with annual interest on her security deposit.

9 . G.L. c. 186, § 15B(2)(d).

10 . G.L. c. 186, § 15B(2)(a) and (b).

11 . G.L. c. 186, § 15B(3)(a).

12 . Security Deposit: G.L. c. 186, §15B(3)(b). Last Month’s Rent: G.L. c. 186, §15B(2)(a). This section requires interest to be paid no matter how long you remain as a tenant. Interest does not accrue during the last month of your tenancy.

13 . G.L. c. 186, § 15B(2)(c).

14 . 940 C.M.R. §3.17(4)(e). Because the landlord's right to take a security deposit is conditioned on providing the Statement of Condition, G.L. c. 186, §15B(1)(b)(iii), you may demand the deposit back if the landlord does not comply. However, most tenants will choose as a tactical matter not to make this a bone of contention at the very beginning of a tenancy. While the security deposit statute does not state a specific penalty for this particular violation, such is a violation of M.G.L. c. 93A. See Attorney General’s Consumer Protection Regulations 940 CMR 3.17 (4)(e) if the landlord is in the trade or commerce of renting residential property and therefore subject to damages of the greater of actual damages or $25.00.

15 . G.L. c. 186, § 15B(1)(e).

16 . G.L. c. 186 §15B(1)(e), (3)(a). Placing the money in an out-of-state bank does not conform to the statute. Taylor v. Burke, 69 Mass. App. Ct. 77, 86 (2007). “[P]rovisions are designed to recognize the ownership of the deposit by the tenant and the landlord’s duty to hold the monies in trust.” Id. at 84.

17 . G.L. c. 186, §15B(1)(e), (3)(a). See also Neihaus v. Maxwell, 54 Mass App Ct 558 (2002), 560-61, where landlord’s method of holding security deposits for all of tenants in a single account in Massachusetts separately designated as a “Security Deposit Account” did not violate the security deposit law. “The security deposit provisions of G.L. c. 186, § 15B, are designed to insure that tenant monies are protected from potential diversion to the personal use of the landlord, earn interest for the tenant, and are kept from the reach of the landlord's creditors.” Karaa v. Kuk Yim, , 86 Mass. App. Ct. 714 (2014) further found that the failure of tenants to provide a Social Security number did not preclude the landlord from establishing a separate account in compliance with §15B.

18 . G.L. c. 186, §15B(7). The tenant is entitled to an award by the court of treble damages for this violation. The penalty is not discretionary. The tenant does not need to prove that the landlord acted in bad faith or that the tenant lost money because of the landlord's actions. Mellor v. Berman, 390 Mass. 275, 283 (1983). Note: Not all violations of G.L. c. 186, §15B provide for triple damages.

19 . G.L. c. 186, §15B(3)(b).

20 . Security Deposit: G.L. c. 186, §15B(3)(b). The statute leaves some question as to whether any interest is payable if you stay in the rental unit less than a year. Last Month’s Rent:G.L. c. 186, §15B(2)(a).

21 . G.L. c. 186, §15B(3)(b).

22 . G.L. c. 186, §15B(3)(b).

23 . G.L. c. 186, §15B(3)(b) and G.L. c. 186, §15B(7). Tanella v. Hesson, 1995 Mass. App. Div. 170 (1995).

24 . G.L. c. 186, §15B(2)(d). Any landlord who accepts a security deposit must keep a written record of all deposits she has received from current tenants and from former tenants for two years after their tenancies end.

25 . G.L. c. 186, §15B(2)(d).

26 . G.L. c. 186, §15B(2)(d).

27 . G.L. c. 186 §15B(4), (6)(e).

28 . G.L. c. 186, § 15B(3)(a); (6)(a).

29 . G.L. c. 186, § 15B(2)(d)(iii).

30 . G.L. c. 186, § 15B(6).

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