Massachusetts Security Deposit and Last Month’s Rent Law: Traps For The Unwary Landlord

by Rich Vetstein on August 10, 2010 · 11 comments

in Landlord Tenant Law, Massachusetts Real Estate Law

Rent Deposits: To Take Or Not To Take?

With the students invading Boston any minute now, it’s a good idea to review last month’s rent and security deposits – one of the most heavily regulated aspects of Massachusetts landlord-tenant law and fraught with pitfalls and penalties for the unwary, careless landlord. In my experience, landlords who handle rent deposits correctly are the exception, rather than the norm.

If you don’t really know the rules for handling last month’s and security deposits, DON’T TAKE THEM. The reason is that any misstep, however innocent, under the complex Massachusetts last month’s rent and security deposit law can subject a landlord to far greater liability than the deposit, including penalties up to triple the amount of the deposit and payment of the tenant’s attorneys’ fees.

Read More: Landlord Prevented From Evicting Tenant Over $3.26 In Interest

If a deposit is necessary, take a last month’s deposit, the requirements of which are less strict than security deposits. Here is an overview of the security deposit law:

Requirements For Holding A Security Deposit

The following steps must be followed when a landlord holds a security deposit:

  1. When the deposit is tendered, the landlord must give the tenant a written receipt which provides:
    • the amount of the deposit
    • the name of the landlord/agent
    • the date of receipt
    • the property address.
  2. Within 30 days of the money being deposited, the landlord must provide the tenant with a receipt identifying the bank where the deposit is held, the amount and account number.
  3. Within 10 days after the tenancy begins, the landlord must provide the tenant with a written “statement of condition” of the premises detailing its condition and any damage with a required disclosure statement;
  4. The tenant has an opportunity to note any other damage to the premises, and the landlord must agree or disagree with the final statement of condition and provide it to the tenant.
  5. The security deposit must be held in a separate interest bearing account in a Massachusetts  financial institution protected from the landlord’s creditors.
  6. The landlord must pay the tenant interest on the security deposit annually if held for more than one year.
  7. The security deposit may only be used to reimburse the landlord for unpaid rent, reasonable damage to the unit or unpaid tax increases if part of the lease. Security deposits cannot be used for general eviction costs or attorneys’ fees. Within 30 days of the tenant’s leaving, the landlord must return the deposit plus any unpaid interest or provide a sworn, itemized list of deductions for damage with estimates for the work. Only then can the landlord retain the security deposit.

What Do I Do If A Tenant Claims I Violated The Security Deposit?

First, talk with the tenant about the situation. Most issues can be resolved amicably, usually with the return of the deposit with interest. That’s always my advice to landlords. If that doesn’t work, call me.


Richard D. Vetstein, Esq. is an experienced Massachusetts residential landlord – tenant attorney. You can contact him at

  • Pingback: SJC Clarifies Security Deposit Liability For Move Out Damage | Massachusetts Real Estate Law Blog()

  • Dee Cap Etheridge

    i move in my place and gave my landlord $1500 but they never told me where my depoist is i ask theys ay oh the intrest is not that much they said i don,t need the info where the bank deposit being ,,is that true because i heard if a landlord fail to tell u can you where ur escrow account u can sue and get three time the deposit back

    • Jack Boggess

      I am not a lawyer, but I can tell you this. If the landlord does not give you back your deposit – minus damages. Then yes, you can sue for the money back.

  • Pingback: Landlord's Failure To Pay $3.26 Security Deposit Interest Stops Eviction, SJC Rules | Massachusetts Real Estate Law Blog()

  • Pingback: Important Security Deposit Case Before Mass. SJC | Massachusetts Real Estate Law Blog()

  • Dana LaCroix

    My situation now is that we paid our landlord $850 for last months rent and half of first months when we moved in half way through June of 2010… We are also at will tenants. .. we were completely unaware of this law. .. yes, shame on us…
    What I would like to know is how would I go about getting all the info I need to receive the interest accumulated over the last 4 years and how much exactly would that be? And also, is the landlord required to put the last months rent in a separate account like they do for security deposits?

  • Pingback: Equity Residential's Upfront Tenant Fees Illegal, Federal Judge Rules | Massachusetts Real Estate Law Blog()

  • guest2727

    I paid March rent on the last day of Feb, then on March 4th I told my landlord that we would be moving out at the end of the month. We kind of had an apartment fall into our laps so to say we weren’t looking or anything I gave her enough notice. I am wondering do I have a right to ask for my last months rent back since I paid 1st, last and security deposit when I moved in but then I paid my actual last months rent in March and found out 4 days later that we were moving out. She said she is not renting it out for April 1st she is going to wait and screen applications and rent it for May 1st instead. I know I am not getting sercuity back beause I have 2 dogs and they did a little bit of damage so I don’t even want that back, I am just wonder if I have a right to ask for my last months rent back ?

  • Pingback: Masschusetts Law on Landlords Taking Last Month’s Rent in Advance: « A Boston Lawyer's Blog()

  • Cheryl

    Our landlord took first last and security, when i asked her for the paperwork after we have lived here over a year,she took some time and then said she didn’t know she was supposed to get a account for the security dep. It took her some more time and she sent a check for $78.50. $75.00 for the last months rent and $3.50 for the security dep. The security dep. Was 1500.00 the last month was also $1500.00  and the first month was $1500.00.she said the interest on the last mths rent was 5%,she gave us a paper that had some info ripped out of it it was a passbook, obviously not in our name. I told her i didn’t see anything saying there was a total of $1500.00 over a tear ago.she said she was using it for repairs on the house for things that needed to be fixed like the furnace,holes in the foundation filter on the water system that they didn’t have on ever, electrical work etc.stuff that was faulty and should have been fixed before.nothing that was caused by us.i told her she couldn’t do that, she said she put it back.I don’t know how she figures $3.50 for over a year for any kind of earned interest on $1500.00 for over a year is a fair amount.we are afraid if we push for the return we will get a bad reference from her when we movewhat should we do?

  • Jlrc32188

    I’m in a situation now where the landlord took a security deposit a year and a half ago. We’ve asked him monthly for either the statement of condition, or a reciept for either the last months rent and security deposit, or simply a statement of interest.
    Landlord FINALLY emails back, and says “sorry, we never opened a separate account, it’s in our checking account. We would never spend it, and the couple times we accidentally did, we put it right back.”
    By the way, their personal checking acct is out of Arizona. I’m at a loss now.

Previous post:

Next post:

Real Time Analytics