Pros and cons on security deposits for 2 family

[John Barry]

Massachusetts landlord, looking for the good, bad and the ugly on security deposits. Where do you investors keep the deposit, what name is the account in, and how do you handle the interest? Thanks

[Account Closed]

@John Barry

Massachusetts Security Deposit Law: One of the most neglected rental laws in Massachusetts and one of the most disputed between landlords and tenants. The Security Deposit Law (for lease agreements of a year or more) caps how much the security deposit is (one month's rent) and within thirty days the deposit must be placed in an interest bearing account where the landlord provides the tenant a receipt indicating the name and location of the bank where it is being held. The same applies to last month’s rents. If the landlord uses a lease that contains any provision that conflicts with the Security Deposit Law and attempts to enforce that provision or attempts to obtain from you or a prospective tenant a waiver of any provision of the Security Deposit Law, the landlord cannot keep your security deposit for any reason including making deductions for damages. Upon receiving the last month’s rent and/or a security deposit, the landlord must give you a receipt for security deposit and/or last months rent. If the deposit isn't deposited in the bank or the tenant doesn't receive the receipt of their deposit within thirty days, the tenant is entitled to the immediate return of the deposit. If the landlord doesn't comply, the tenant can go to court and may be entitled to three times the amount of the security deposit or the remaining balance to which the tenant is entitled after lawful deductions with interest, plus court costs and reasonable attorney’s fees. If the landlord collects a security deposit they must give you a signed, separate statement of the present condition of your apartment including a comprehensive list of any existing damage. The landlord must provide you with this statement upon receipt of the deposit or within 10 days after the tenancy begins, whichever is later. If you do not agree with the contents of the statement, you must return a corrected copy to the landlord within 15 days after you receive the list or 15 days after you move in, whichever is later. If you fail to return the list and later sue to recover your security deposit, a court may view your failure to do so as your agreement that the list is complete and correct. If you submit a separate list of damages, the landlord must return it within 15 days of receipt with a clear written response of agreement or disagreement.