Houseman - Tenant Handbook

Security Deposit

There are strict rules as to how a landlord must handle your security deposit. A landlord cannot require you to pay more than the amount of one month's rent for a security deposit. Even Section 8 tenants may have to pay a security deposit equal to the full rent amount, not just the reduced portion. Once the security deposit is handed over, the landlord is required to do the following:

  • give you a statement of condition on the unit
  • deposit your money in a separate interest bearing account
  • give you a signed receipt

The landlord then has 30 days to give you -- in writing -- the name and location of the bank, and the account number under which your money has been placed. If the landlord fails to do these things within 30 days of receiving your deposit, you are entitled to get your security deposit back immediately. The landlord would also lose any right to sue you for damage to the apartment. MGL ch. 186 sec. 15B(2), (3)

Interest

At the end of each year of your tenancy, the landlord should send you a notice restating where your security deposit is and how much interest is owed to you. You can either have this amount credited to your next rental payment or the landlord can pay it to you directly. MGL ch.186 sec. 15B (3)(b)

In Massachusetts you are entitled to 5 percent interest a year unless the landlord's bank pays less. You are only entitled to the amount earned on your money. The landlord must notify you at the end of each year, and within 30 days after you move out.

Last month's rent

If a landlord requires you to pay the last month's rent prior to moving in, then you are entitled to earn interest on this money as well. Like interest accrued on your security deposit, you are entitled to 5 percent interest annually, unless the landlord's bank has a lower interest rate. However, unlike the security deposit, there is no requirement that last month's rent be deposited in a separate account.

Thirty (30) days after the anniversary date of your tenancy, if your landlord has not sent you this interest or told you that you can subtract it from you next rent check, you may legally subtract it from your next rent check on your own. MGL ch. 186 sec. 15B (2)(a)

Transfer of security deposit and last month's rent

When ownership of a building is transferred, the security deposits and last month's rents must also be transferred. Under the law, you cannot be made to pay a new or additional security deposit or last month's rent because someone else has taken over the building. MGL ch. 186 sec 15B (1)(d)

The old landlord or manager is required to transfer all last month's rents and security deposits, with their interest, to the new owner. The new owner now becomes responsible for the deposits and must notify you of that fact within 45 days. If you do not receive this written notice in time, you should demand that the old landlord refund your money immediately. MGL ch.186 sec.15B (6)(d)

The new landlord, however, is still responsible for the amount of your deposit, even if she never actually received it from the old landlord. She may allow you to live there rent free for the amount of time that was covered by the deposit. MGL ch. 186 sec. 15B (5 )

Note: you are not covered under these rights if your building is foreclosed by a bank or government agency for back taxes.

Additional payments for security deposit or last month's rent after you move in

If you never paid a security deposit and/or a last month's rent when you first moved in, the landlord (either the original landlord or a successor) can require you to pay these amounts. The security deposit amount must be no higher than the rent that was in effect at the time you moved in; the last month's rent, however, can be based on the current rent level. MGL ch. 186 sec. 15B (1)(d)

If your rent has increased during your tenancy, the landlord can ask you for an additional payment to make up the difference between the last month's rent you already paid and the current rent level. If the landlord doesn't do this, the credit you're entitled to for the last month's rent is only the original amount you paid, and you must make up the difference between this amount and the rent for the last month of your tenancy when you vacate. The landlord cannot ask you for an additional payment toward the security deposit if the rent increases.