Overview of the Massachusetts Security Deposit Law
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.