MA security deposit

SJC Hears Important Security Deposit Case

by Rich Vetstein on November 5, 2015

in Housing Court, Landlord Tenant Law, Massachusetts Real Estate Law, Rental Housing

Updated (4/27/16): SJC Rules That Security Deposit Violation Is Full Defense to Eviction

Landlord Stopped From Evicting Tenant Over $3.26 In Interest

Massachusetts has a well-deserved reputation as being a hostile jurisdiction for landlords. With a myriad of tenant favorable laws on the books, the proverbial playing field is often stacked against landlords. Exhibit A is the Security Deposit Law which provides a three month penalty, including payment of the tenant’s legal fees, against landlords who don’t follow its strict requirements.

One of the requirements of the Security Deposit Law is that annually the landlord must pay the tenant any accrued interest on the deposit. That’s what got landlord Garth Meikle in trouble with his tenant who was three months behind in rent.

Garth Meikle v. Patricia Nurse, SJC-11859

Meikle brought an eviction case in the Housing Court, and essentially won with the judge ordering the tenant to pay the past due rent, but deducting the security deposit plus the three dollars and change in interest. However, to the tenant’s rescue came the crusading Harvard law students from Harvard Legal Aid Bureau. Representing her for free, the students have taken her case all the way up to the Supreme Judicial Court. (Why is it that landlords are not offered the same free legal aid?). The tenant posted an appeal bond so she’s allowed to stay in the apartment while paying the rent during the pendency of the case.

The SJC heard arguments this morning with third year Harvard Law student Louis Fisher arguing the case. (Damn lucky kid!).

The Harvard tenant lawyers are advancing the dangerous argument that a landlord who violates the security deposit law — even in the most minor of circumstances — cannot evict a non-paying tenant.

Scary right? If the Court accepts this argument then tenants will have yet another powerful tool to avoid eviction. The Security Deposit Law is so strict that most landlords make minor errors in holding the deposit. That’s why I have advised that landlords don’t even bother taking security deposits in the first place.

You can guess where I stand on the merits of the case. The security deposit is a separate financial matter between the landlord and tenant which has nothing to do about whether the tenant owes rent or the condition of the property. Those are the two primary issues in a non-payment eviction case. You don’t pay the rent without legal defense, you’re out. Period. Compliance with the security deposit law should have no bearing on a non-payment eviction. The Legislature did not intend otherwise, and regardless, that should not be our policy. Enough is enough already.

You know what else bothers me? These legal aid organizations take on these “test cases” to train law students and get them experience. After all when does a law student ever get to argue a SJC case? Is that really fair and just to small unrepresented landlords like Mr. Meikle who told the justices that his son and fiancee were hoping to live in the apartment?

The SJC should come out with a final ruling in the next few months. Check back here for future developments. In the meantime, I will keep on fighting the good fight for landlords.

Case Link:  Garth Meikle v. Patricia Nurse SJC-11859

{ 3 comments }

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

by Rich Vetstein on August 10, 2010

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 [email protected].

{ 11 comments }