Massachusetts’s Security Deposit Law

A recent article from the Boston Globe, “Apartment management won’t return security deposit? That’s just one problem at this Revere complex,” highlights the importance of understanding Massachusetts’ security deposit law: an important consumer protection law for tenants.

Overview of Massachusetts’s Security Deposit Law

This article discusses a common scenario for tenants who have provided a landlord with a security deposit: a landlord’s outright refusal to return the deposit at the end of the tenancy.  Prior to the security deposit law, tenants had few options for pursuing such claims; often, the expense in attorney fees for suing  for one of these deposits made such claims far more expensive than the actual deposit itself.

For this reason, Massachusetts passed the security deposit law, which, I imagine, is one of the most pro-tenant laws in the entire country.  This law imposes numerous regulations on the acceptance, holding, and return of a security deposit, and provides stiff penalties for a landlord’s failure to comply with this law, namely, treble damages of the deposit. This is 0ne reason, among many, why a landlord should consider not accepting a security deposit in the first place.

Violation of the Security Deposit Law 

It is a common misconception that every violation of the security deposit law allows a tenant to recover treble damages, attorney fees, and costs against a landlord.  Rather, the Supreme Judicial Court has clarified that some violations of the law simply require the immediate return of the deposit, while others mandate treble damages.  Generally, a landlord’s failure to return a security deposit within thirty days after the end of the tenancy (or otherwise account for its use towards any damage in the apartment) will impose the treble damage penalty.

Conclusion

If you find yourself having difficulty with a security deposit, contact me for a consultation.  I have helped many Massachusetts tenants obtain the return of their deposits and take full advantage of the protections of this law.

Landlord Not Returning a Security Deposit in Massachusetts

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A landlord not returning a security deposit is one of the most common complaints that comes up between tenants and landlords in Massachusetts.  Massachusetts law heavily regulates the handling of security deposits, and this law can be used when a landlord improperly refuses to return a security deposit.

Massachusetts’s Security Deposit Law

A quick skim of Massachusetts’s security deposit law shows the complexity of this law.  G.L. 186 Section 15B regulates every aspect of a security deposit, from the acceptance of the deposit up to its return to the tenant.  The extensive requirements of this law is one reason why I advise Massachusetts landlords to never accept a security deposit.

Penalties for not complying with this law can be steep.  Some violations entitle the tenant to the immediate return of their deposit, and others permit the tenant to obtain triple damages, costs, and attorney fees against a landlord who fails to comply with this law.

What To Do About a Landlord Not Returning a Security Deposit 

If a landlord fails to return your security deposit, contact an experienced landlord/tenant attorney for assistance.  While the security deposit law offers numerous protections for tenants, an experienced attorney is often necessary for determining whether a violation occurred, how to pursue such a claim against the landlord, and the likely damages that can be obtained from such a case.

Landlords can equally benefit from having the assistance of an experienced attorney when handling a security deposit claim.  An attorney can help determine if a violation occurred and whether any possible defenses exists to such a claim.  An attorney can be helpful  in negotiating a settlement and minimizing damages.

A landlord should not wait until a security deposit claim has arisen to seek the assistance of a landlord/tenant attorney.  If you think you may be in violation of this law, or want help in making sure you comply with the law’s detailed requirements, speak to a landlord/tenant attorney right away.

Conclusion 

If you find yourself involved with a security deposit matter, contact me for a consultation.  Having an experienced attorney on your side can make all of the difference in getting you the help you need.

Landlord Not Giving a Security Deposit Back

A landlord not giving a security deposit back is one of the most common type of landlord/tenant problems.  What should a tenant do if this happens to them?

Overview of Massachusetts’s Security Deposit Law

Massachusetts’s security deposit law regulates how a landlord is allowed to collect and hold a tenant’s security deposit.  Skim through this law and you’ll see that almost everything concerning a security deposit is subject to one of this law’s provisions.  The amount of the security deposit, bank account where it can be held, and–most relevant to this post–the return of the deposit are covered by this law.

Failure to comply with Massachusetts’s security deposit has dire consequences for landlords.  Penalties can include treble damages, court costs, and attorney fees.  This means that even a small security deposit violation can lead to a large judgement for non-compliance with this law.

Requirements for Returning a Tenant’s Security Deposit

The return of a security deposit must be done carefully.  A landlord is only allowed to deduct from the deposit unpaid rent or water charges, an unpaid increase in real estate taxes (if the tenant was obligated to pay this under the terms of the tenancy), and a reasonable amount to repair any damage to the unit.  For the latter deduction, the landlord must provide a list of these damages, sworn under “the pains and penalties of perjury” and written evidence of these expenses.

This return of the deposit must be made within thirty days of the tenant ending their tenancy.

What To Do About a Landlord Not Giving a Security Deposit Back 

If your landlord is not giving your security deposit back, consult an experienced landlord/tenant lawyer.  An attorney can review your case and quickly determine whether you have a claim against your landlord.  Massachusetts’s security deposit law, importantly, often provides for attorney fees: if you prevail in your case against a landlord, the costs of hiring an attorney may be recovered in the case.

Damages for a Security Deposit Violation in Massachusetts

The Massachusetts Supreme Judicial Court issued an important decision on Massachusetts’s security deposit law earlier this year which clarifies the damages than a tenant can obtain from a security deposit violation.

In Phillips v. Equity Residential Management, LLC, the Supreme Judicial Court held that treble damages are not required for every security deposit violation.  Like Massachusetts’s security deposit law itself, Phillips is a complex case.

Overview of Massachusetts’s Security Deposit Law 

Massachusetts’s security deposit law heavily regulates a landlord’s acceptance, holding, and return of a tenant’s security deposit.  This law is so detailed that I, along with many other landlord/tenant attorneys, warn landlords to never accept a security deposit.  This law, among other things, has requirements on where a security deposit must be held, what information must be provided to a tenant about the acceptance of the deposit, and what deductions may be taken from the deposit at the end of the tenancy.

Damages for a Security Deposit Violation

Failure to comply with the security deposit law can come with harsh consequences.  The law imposes treble damages, attorney fees, and costs for failure to comply with many of its detailed requirements.  In Phillips, the Supreme Judicial Court clarified which security deposit violations permit treble damages against a landlord.

The security deposit law contains a number of “forfeiture” provisions, where a landlord is required to automatically return a deposit.  The law also imposes treble damages for a failure to “return to the tenant the security deposit or balance thereof to which the tenant is entitled after deducting therefrom any sums in accordance with the provisions of this section, together with any interest thereon, within thirty days after termination of the tenancy.”  Phillips determined whether a tenant gets treble damages for failing to return a portion of the deposit that was otherwise forfeited under the law.

Prior to Phillips, many courts took the position that treble damages applied anytime a landlord violated the security deposit law.  Now, the law is clear that for some violations of the law, a tenant is simply entitled to the full return of his deposit, without treble damages.

Conclusion 

While Phillips places limits on the damages one can receive for a security deposit violation, it would be a mistake to under estimate the importance of complying with this law if you are a landlord, and understanding its protections for tenants if your security deposit has been wrongfully withheld.

In my opinion, one of the dire consequences of Phillips is that tenants may not be able to obtain attorney fees for certain security deposit violations.  They may be able to get their full deposit back, but nothing for the expenses of hiring an attorney to assist with the case, making it cost prohibitive to hire a lawyer for such a matter: the reason why the harsh penalties of this law exist in the first place.

However, there is an often unknown law that may provide help in such a scenario.  G.L. c. 186, § 20 provides that, if there is a written lease agreement allowing the landlord to get attorney fees against a tenant, the tenant is also allowed attorney fees against a landlord for any violation of the lease agreement.  This law suggests that a tenant may be able to obtain attorney fees for security deposit violations that are not within the scope of treble damages, attorney fees, and costs, per Phillips.

If you find yourself involved with a security deposit violation, contact me for a consultation.  An experienced attorney is essential in one of these tricky matters.

Help With A Security Deposit

Help With A Security Deposit

Both tenants and landlords can benefit from help with a security deposit.  Massachusetts’s security deposit law is not light reading, and often requires even the most experienced landlord-tenant attorney to review the law more than once to understand its many, many provisions.  An experienced attorney can often provide invaluable help with a security deposit matter.

Landlords Who Have Accepted A Security Deposit From a Tenant

I, along with many other attorneys (as well as a former Housing Court judge) recommend that landlords do not take a security deposit from a tenant.  The law has too many requirements for a landlord to comply with, and the risks of violating the law are steep, which can include treble damages, attorney fees, and costs.

For landlords, help with a security deposit often involves determining whether a landlord complied with the law’s detailed requirements.  If a landlord has erred in holding one of these deposits, an attorney can often help assist a landlord in avoiding or minimizing the damages that can arise from violating this law.

If you’re a landlord, don’t make the assumption that you need to wait until a problem arises to get help with a security deposit.  A consultation with a landlord-tenant attorney can often help determine if you have violated any part of the law, and determine the best way to avoid a larger problem down the road.

Tenants Who Cannot Get Their Security Deposits Back

For tenants, help with a security deposit often involves legal action against a landlord for failing to properly return a deposit.  Massachusetts’s security deposit law explicitly provides for attorney fees in such cases: the purpose being to give tenants incentives for pursuing these claims.  A landlord-tenant attorney can help you determine if you have grounds for pursuing a security deposit claim and the best court for pursuing such a matter.

Conclusion 

I provide assistance to both landlords and tenants with security deposit matters.  My experience in representing both types of clients provides me a unique perspective on this area of law.  If you find yourself in need of help with a security deposit matter, contact me for a consultation.

 

 

Returning a Security Deposit

 

Rule number one for Massachusetts landlords: never, never take a security deposit.  As I have written before, the risks just aren’t worth it.  The Massachusetts Security Deposit Law is one of the most complex and detailed laws on the books, with numerous traps for the unwary.  Failing to follow one of the law’s requirements can result in treble damages, attorney fees, and costs against the landlord.  As such, a $1,000 security deposit can easily result in $4,000-$5,000 in damages against a landlord if the security deposit law is not strictly followed.

An important part of this law concerns returning a security deposit.  Returning a security deposit would seemingly be an easy task, with the landlord simply taking the required amount of damages from the deposit and returning the balance to the tenant.  The security deposit law, however, has detailed requirements for how this must be done.  Failing to comply with even the most minor requirements of this law can result in enormous damages to the landlord.

How should a landlord handle returning a security deposit?  Contact a landlord/tenant attorney.  An attorney can help ensure that each of these requirements are complied with and save time, money, and heartache down the road.  While it may seem “overkill” to hire an attorney for such a seemingly small matter, doing so can avoid an even bigger problem resulting for a violation of this law.

Tenants who are having problems with getting their security deposits back should also speak to a landlord/tenant attorney.  The aim of the Massachusetts Security Deposit Law is to avoid having tenants lose their security deposits without cause, and provides relief for violations of this law.

Who Pays for Legal Fees in an Eviction Case?

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A central question that anyone in a landlord/tenant case needs to consider is, who pays legal fees in an eviction case?  The answer to this question makes a huge difference in determining whether to pursue a potential claim against a landlord or tenant.

Massachusetts, like most of the country, follows the American Rule in awarding attorney fees in a lawsuit.  Unless there is a law explicitly allowing attorney fees, a prevailing party doesn’t get attorney fees in a lawsuit . . . even if the court determines they were on the “right” side of the law.

The American Rule most directly impacts landlords in eviction cases against tenants.  Landlords generally cannot recover attorney fees in an eviction case against a tenant.  A landlord who prevails in an eviction case is entitled to the “costs” of the case, but this is generally limited to the filing fee of the lawsuit, and not any attorney fees incurred in one of these cases.  Some leases provide for attorney fees if a landlord brings an eviction case in court, but this alone does not guarantee that a landlord will obtain these fees from the tenant: a landlord (like any party in a lawsuit) can only obtain a judgment from a party with assets.   If the tenant does not a steady income, property, or anything else of value, the landlord will have a judgment that they cannot recover.

The same isn’t true for tenants bringing claims against landlords.  Massachusetts has some of the most tenant friendly laws in the country, allowing for legal fees in an eviction case.  Violation of one of Massachusetts’s many landlord/tenant laws, such as the security deposit law, will not only subject a landlord to monetary damages, but require them to pay a “reasonable” attorney fee if the tenant prevails.  For a lengthy eviction case, these attorney fees can be huge.

With this in mind, both landlords and tenants should keep in mind who pays attorney fees in eviction cases when evaluating their options.  For landlords attempting to evict a tenant, strong consideration should be given to working out settlement agreements in lieu of litigating these cases.  The potential risks of fighting one of these cases can be costly (as unfair as this can  be).  For tenants who are dealing with an unfair landlord, Massachusetts’s landlord/attorney laws, which provide for attorney fees for a prevailing tenant, are a strong reason why tenants should speak with an experienced landlord/tenant attorney if they are dealing with a bad landlord.

If you find yourself in either scenario, contact me for a consultation.

Overview of the Massachusetts Security Deposit Law

 

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Ask a room full of lawyers a legal question, and you will likely get a handful of different responses.  I would bet, however, that there is a major exception to this on the question of whether a landlord should accept a security deposit from tenants in Massachusetts.  On that question, Massachusetts landlord attorneys (including your’s truly) would likely uniformly answer no.  A Massachusetts landlord should never accept a security deposit from a tenant.

Why?  The Massachusetts Security Deposit Law is one of the most complex and detailed consumer laws on the books in Massachusetts.  Few lawyers and judges understand the detailed requirements of this law, and I imagine even fewer landlords actually comply with every part of it.  The Massachusetts Security Deposit Law has lengthy provisions for accepting, holding, and returning a deposit, making the acceptance of a security deposit a huge hassle for landlords.

The danger for landlords under the Massachusetts Security Deposit Law are the penalties associated with a landlord’s failure to comply with this law.  Several specific violations will result in a tenant being entitled to treble damages (three times the tenant’s security deposit), costs, and attorney fees.  This means, for example, that a violation of a tenant’s $500 security deposit can result in over $2,000 of damages, if the security deposit is not handled correctly.  If the tenant is represented by an attorney, expect these damages to be even higher.

An even greater danger to landlords is the use of the Massachusetts Security Deposit Law as a defense to a eviction case.  A recent Supreme Judicial Court decision has held that violation of this law not only entitles a tenant to monetary damages, but also serves as a defense to an eviction.  In other words, if a landlord fails to comply with the Massachusetts Security Deposit Law, he or she likely will not be able to evict a tenant, and may face a huge penalty from the court.

What can a landlord do to avoid the Massachusetts Security Deposit Law but still get some security from their tenants?  Plan accordingly by incorporating a “security deposit” into your monthly rent.  For example, say you wish to rent an apartment for $1000/month, and want a security deposit.  Instead of renting for $1000/month, add $80-$100 more to the rent ($1000/12 months = $83.33) , and set that money aside.  If, at the end of the lease, there is damage in the apartment, you’ll have the funds to deal with it, without the burdens of the Massachusetts Security Deposit Law.  Even better, if there are no damages in the rental property, you’ll have some extra cash at the end of the tenancy.

If you’re a landlord and think you have violated the Massachusetts Security Deposit Law, don’t despair: it may be possible to remedy the situation by returning the deposit or reaching a resolution with the tenant.  To do so, contact an experienced landlord/tenant attorney as soon as possible.

 

Guest Blog Post: Meikle v. Nurse (Defenses in Massachusetts Eviction Cases)

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The Massachusetts Landlord Tenant Blog is proud to have Attorney Joseph N. Schneiderman guest blog on the Massachusetts Supreme Judicial Court’s recent Meikle v. Nurse decision, an appeal involving the important issue of defenses in Massachusetts eviction cases.  Attorney  Schneiderman is an appellate attorney licensed in Massachusetts and Connecticut and may be contacted at connlawjoe@gmail.com.

Supreme Judicial Court:
Violation of the Security Deposit Statute is A Defense to Possession In An Eviction Case

On April 27, in Meikle v. Nurse, Slip Op., SJC-11859, 474 Mass.—, the Supreme Judicial Court held that a residential tenant could assert a violation of the security deposit statute (G.L. c.186, §15B) as a defense to possession in a summary process action (a copy of the decision is posted below).

In October 2011, Ms. Nurse executed a one-year lease to live in a residence Mr. Meikle owned and paid a $1,300 security deposit equivalent to one month’s rent. Although Mr. Meikle acknowledged receipt of the deposit, he neither informed Ms. Nurse where he deposited the lease-nor paid her interest. Ms. Nurse lived there until April 2014, when Mr. Meikle commenced the instant summary process action. Ms. Nurse counterclaimed on multiple grounds, including a violation of the security deposit statute.

A Judge in the Boston Housing Court held for Ms. Nurse on her security deposit claim because Mr. Meikle failed to provide proper receipts and interest. However, in conflict with at least three past Housing Court rulings, the Judge ruled that the violation would only offset the unpaid rent and was no defense to possession. Ms. Nurse appealed and the Supreme Judicial Court took the case directly on their own motion.

 Writing for the Court, Justice Geraldine S. Hines distilled the case to the interplay of G.L. c.186, §15B and G.L. c.239, §8A, establishing defenses to eviction. The Court applied two established interpretive principles to resolve this issue. First, the Court interprets statutes to effectuate the intent of the Legislature based on the language of the statute and its purpose. Plain and unambiguous language in a statute was “conclusive of the intent of the Legislature.”  Second, the Court interprets remedial statutes broadly to best effectuate their purposes.

 Against this backdrop, the Court noted that the fifth paragraph of Section 8A provided that “a tenant may retain possession if: (1) the tenant prevails on a counterclaim or defense brought “under this section; and (2) the damages on that defense or counterclaim exceed the amount due the landlord, the tenant pays to the court the amount due within one week.” Construed harmoniously, the phrase “under this section” referred back to the first paragraph of Section 8A to assert a defense or counterclaim “arising out of such property, rental, tenancy…occupancy of breach of warranty, for a breach of any material provision of the rental agreement, or for a violation of any other law.”

The Court held that violation of the security deposit statute “fits squarely within this framework [as relating to or arising] out of the tenancy” and its violation was one “of any other law.” The Court emphasized that security deposits were a “prerequisite to most residential tenancies” the security deposit statute was “part of an elaborate scheme of rights and duties to prevent abuses and to insure fairness to the tenant.” Moreover, a contrary interpretation would frustrate both statutes, especially the historic expansion of Section 8A leading to the language “violation of any other law” in 1977. Finally, Mr. Meilke was not without a remedy. If he ameliorated the security deposit violation, he could later bring a new summary process action-even if Ms. Nurse paid the amount due.

The Court’s decision reflects a thoughtful balance. First, the Court broadly effectuates two remedial statutes as a harmonious whole to protect residential tenants. Security deposits are a sine-qua-non of residential tenancies and the Legislature enacted a broad constellation of rights to protect tenants. Holding that a security deposit violation was not “a violation of any other law” ignored two lessons of history: the expansion of defenses to tenants and robust protection of security deposits.

At the same time, the Court establishes a key limit for future cases by interpreting “any other law” to invariably correlate to the landlord tenant relationship. Future tenants will therefore need to make this showing to have a defense to possession.  Landlords also may remedy their violation and bring a new summary process action; indeed, “the Legislature’s [was to provide…] a time limited equitable remedy.” The open question thus potentially becomes how long a tenant may retain possession for a security deposit violation-or, conversely, how long a landlord has to remedy a security deposit violation before commencing a new summary process action.  Hopefully, despite the summary nature of summary process, the SJC will address these issues again strike a balance.

Joseph N. Schneiderman has an appellate practice “on circuit” in Massachusetts and Connecticut, and argued his first civil appeal in the SJC on March 10. See Goodwin v. Lee Public Schools, SJC-11977. Joe gratefully thanks Adam for the opportunity to guest blog (again)!

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