Never give a landlord cash without getting a written receipt. A landlord must give you a written receipt including specific information when you make a last month's rent payment. See the chart that describes this information in the section called Security Deposit and Landlord's Responsibility. For this reason, the most important step you can take to protect your rights is to get a complete receipt at the time you give a landlord any deposit. No responsible landlord should object to giving you a receipt if she knows the law. And, if she does object, use the sample receipt (see Form 4: Security Deposit and Last Month's Rent Receipt).
A tenant is entitled to receive 5% interest on her last month's rent payment every year, except that if the landlord keeps the money in a bank and the bank pays less than 5%, you are entitled only to the amount actually earned.24 For example, one year after you sign a lease or move into an apartment, and on every anniversary date after that, your landlord must send you a statement telling you how much interest she owes you or a notice telling you that you can subtract this interest from your next rent check. If, 30 days after the anniversary date of your tenancy, your landlord has not sent you this interest or told you that you can subtract it from your next rent check, you may legally subtract it from your next rent check.25 For an example, see How Much Interest Does Your Landlord Owe You in the section called Security Deposit and Landlord's Responsibility.
When your tenancy terminates, your landlord must give you all of the interest she owes you within 30 days. If she does not, you may file a court case against the landlord and have a right to three times the interest owed, plus reasonable court costs and attorney’s fees.26
Rules on exactly what can be charged vary by program. For the tenant-based voucher program, there is no provision for charging a last month's rent payment (but there is nothing specifically in federal regulations that would prohibit this). If an owner demands a last month's rent, it should be limited to your portion of the rent, since the owner will be paid by the housing agency for its portion of the rent for your last month.27
27 HUD regulations previously specifically did not permit charging a last month's rent payment for the Section 8 program. As stated, now they neither specifically permit nor prohibit such a payment. If an owner insisted that a Section 8 tenant pay full contract rent as a last month's rent, this would likely be in violation of G.L. c. 151B, §4(10).
Produced by Maureen McDonagh Last updated December 2013