How to Return a Security Deposit

The Appeals Court issued an interesting decision last week about the important landlord-tenant topic of how to return a security deposit. The decision, Slater v. Traynor Management, is included below.

Massachusetts law covers nearly every aspect of a landlord’s acceptance, holding, and return of a security deposit. The law is long, complicated, and nearly impossible for most landlords (and their attorneys) to understand fully. Penalties for non-compliance with the law can include treble damages and attorney fees.

The most stringent requirement of this law is the deadline for returning a security deposit, which must be done thirty days after the end of the tenancy.

Overview of Security Deposits

Slater concerned a case where a landlord first tried to return a security deposit by giving it to the tenant in person at the landlord’s management office (which the tenant denied ever happened). The tenant, who moved out of Massachusetts, never received the return of his deposit by mail by the thirty-day deadline, despite having provided the landlord with his mailing address multiple times.

The tenant sued, and the Housing Court awarded the tenant treble damages and $17,780 in attorney fees. This arose from a dispute over a $2,425 security deposit proving, once again, the many dangers of mishandling one of these deposits.

The Appeals Court upheld the award of damages in this case and noted the following:

The undisputed facts are that the landlord (1) knew by
September 15 that the tenants were entitled to return of the
full amount of the deposit plus interest by the end of
September; (2) believed that it was feasible to return the
deposit by mail and that the tenants expected return by that
means; and (3) drafted checks to return the deposit on September
15, but did not mail the checks or otherwise return the deposit
to the tenants by September 30.

The Appeals Court also held that, even if the landlord did make the security deposit available to the tenant at the landlord’s office, this was still not a proper return of the deposit, as the landlord knew the tenant had already moved out of state, and asking the tenant to return to Massachusetts for the deposit would have been “quite inconvenient for them.”

How to Return a Security Deposit

Slater is an important lesson for landlords on how to return a security deposit. Simply telling a tenant they can pick up the deposit from the landlord comes with risks, if the tenant no longer lives in Massachusetts or is unable to travel to the landlord easily.

With this in mind, landlords should follow two procedures when returning a security deposit to a tenant:

  1. Always request a mailing address from a tenant several weeks before the end of a tenancy;
  2. Send the security deposit to the tenant well before the thirty-day deadline using certified mail or some similar service.

Does a landlord have to actually return a security deposit within thirty days of the tenant vacating, or simply mail to the tenant it by this deadline? No one knows, and a landlord should aim not to be the “test case” for when this legal question eventually reaches the Appeals Court or Supreme Judicial Court. Err on the side of caution, and ensure that the tenant actually receives the deposit by the thirty-day deadline.

Contact me for a consultation if you need assistance with a security deposit matter.