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When can a Massachusetts landlord retain a security deposit?

On Behalf of | Dec 8, 2023 | Landlord/Tenant |

Numerous laws control the relationship between a landlord and their tenants in Massachusetts. The law helps resolve conflicts and clarify the obligations that each party has to the other. Security deposit that a tenant pays when moving into an apartment or rental home can easily become the source of conflict when they decide to leave.

Tenants pay a deposit to protect the landlord against the risks inherent and renting out a property. The law requires that the landlord maintain the security deposit in a separate financial account. They cannot commingle the funds with their own resources or business funds. Landlords can request a security deposit of up to one month’s rent before a tenant moves into a rental unit.

The landlord then should return the deposit when the tenant completes the lease and vacates the property. Unfortunately, sometimes tenants damage properties, and other times landlords may keep a security deposit without a justification for doing so. What does Massachusetts state law say about landlords retaining security deposits?

Landlords must justify the funds they keep

The security deposit a tenant pays exists specifically to provide a form of compensation if they breach the contract or damage the property. If a tenant leaves before their lease is over, for example, landlords might retain some or all of the security deposit to cover unpaid rent. The landlord will need to factor in a prior payment of the last month’s rent for such claims.

If there are damages to the property, a landlord can use the security deposit to pay to repair those damages. The damages must be more serious than standard aging or wear and tear from use. Landlords can also use the security deposit to pay rental fees that the tenant did not pay and any outstanding water bills.

If a landlord intends to portion of a security deposit, they typically need to notify the former tenant in writing within 30 days. Failure to do so might lead to litigation. Tenants can sometimes demand triple damages for violations of security deposit rules.

Understanding when a landlord can retain the security deposit or part of it can help both tenants and landlords determine their rights in the event that a challenging situation related to this concern arises.