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Massachusetts landlords: Important financial considerations

On Behalf of | Jun 3, 2024 | Landlord/Tenant |

If you’re currently renting property to a tenant – or you’re taking steps to make this vision a reality – you may be capitalizing on a great opportunity. A rental property can be an incredible investment that can bring in considerable income, but you must ensure that you’re complying with all applicable laws or you’ll run the risk of legal issues. Landlord and tenant rights in Massachusetts are very specific about certain considerations.

One of the most important points landlords must remember is that they need a comprehensive lease that includes all terms of the arrangement at issue, including the dates of occupancy, rental payments and due dates, landlord responsibilities and rules that tenants must follow. For example, a tenant will typically have to put down money when they sign the lease, so landlords must ensure they understand what they can ask for and what they must do with it.

Limits on initial payments

Landlords in Massachusetts are limited to how much money they can seek for a person to move into a rental. At the start of the lease, they can only require first month’s rent, last month’s rent, a security deposit and the cost to install a new lock and key for the unit.

Security deposit requirements

The security deposit amount is up to the landlord, but it can’t be more than just one month of standard rent. This must be placed in a Massachusetts bank account within the first month of the tenant living there. The account must accrue interest, and that interest must be provided to the tenant annually either as a payment or deducted from a month’s rent.

A security deposit can’t be used to cover normal wear and tear on the property. Instead, it’s meant only for unusual damage. When the tenant moves out, the landlord must return the security deposit plus the accrued interest. They can take out money for damages or past due rent. The money or statement regarding the usage of the security deposit must be provided to the tenant within 30 days of them leaving the property.

The money matters related to a rental are only one small part of what a landlord has to know when they rent out a property. Ultimately, it’s always a good idea to have a legal representative who can assist with these matters so that a landlord can minimize the chance of facing legal action for failure to comply with applicable laws.