TL;DR: Massachusetts Security Deposit Laws
- Maximum deposit: Landlords can charge no more than one month’s rent as a security deposit.
- Last month’s rent: Last month’s rent is not considered a security deposit and is treated separately under Massachusetts law. It is an advance payment and has its own legal requirements, such as issuing receipts and paying interest.
- Storage: Deposits must be held in a separate, interest-bearing account at a Massachusetts bank—never mixed with other funds. The deposit must be kept in a separate account to protect tenant funds from the landlord’s creditors.
- Disclosure: Within 30 days, landlords must give tenants a security deposit receipt that includes the bank name, address, and account number.
- Return deadline: Deposits must be returned within 30 days of the tenancy ending.
- Interest: Landlords must pay 5% annual interest or the actual earned interest, whichever is less.
- Documentation: Move-in condition reports and itemized deduction lists are required.
- The rental agreement should clearly outline security deposit terms and obligations.
- Penalties: Failure to comply can result in forfeiture or triple damages for willful violations.
Overview: Massachusetts Security Deposit Laws
Massachusetts has some of the most detailed—and tenant-friendly—security deposit laws in the U.S., governed by Massachusetts General Laws Chapter 186, § 15B. The Massachusetts security deposit law and security deposit statute set out strict requirements for both landlords and tenants. These regulations strictly control how landlords collect, store, and return deposits, with harsh penalties for even minor violations.
Landlords must follow precise documentation and accounting steps. A single oversight—like missing a deadline or skipping an interest payment—can lead to losing the deposit entirely and owing damages to the tenant.
This guide covers:
- How much landlords can charge
- Storage and interest requirements
- Rules for documentation and returns
- The lease agreement or rental agreement must comply with Massachusetts law regarding security deposits
- Penalties for non-compliance
1. Security Deposit Limits & Storage Requirements
- Maximum deposit: Landlords may not charge more than a security deposit equal to one month’s rent as a security deposit. The law prohibits requesting a security deposit exceeding one month’s rent. While it is common practice for landlords to request security deposits and rent increases, Massachusetts law limits the security deposit to one month’s rent.
- Storage: Deposits must be held in a separate bank account (that earn interest) at a Massachusetts financial institution. Such security deposit must be kept in a separate, interest-bearing account as required by law. The separate account protects the deposit from the landlord’s creditors. Landlords with multiple properties may hold security deposits for multiple properties in a single account, provided each deposit is properly accounted for. Using an out of state bank to hold security deposits is not permitted. Multiple deposits may be stored in one account, but it must remain separate from other funds and be properly disclosed to tenants.
- Written disclosure: Within 30 days of receiving the deposit, landlords must provide tenants with:
- A receipt confirming the amount of the deposit received
- The name and address of the bank
- The account number where the funds are stored
Law Reference:Mass. Gen. Laws ch. 186, § 15B(1)(b)
2. Security Deposit Returns & Allowable Deductions
Massachusetts law strictly regulates the security deposit return process, including strict deadlines and documentation requirements for both landlords and tenants.
- Return deadline: Landlords must return the security deposit within 30 days of the tenancy ending, unless deductions are justified by actual damage or other permissible reasons.
- Permissible deductions:
- Unpaid rent
- Unpaid real estate taxes (if required by lease)
- Rental property damage or actual damage to the rental unit beyond reasonable wear
- Damages excluding normal wear and tear (not including reasonable wear such as normal carpet stains or wear to even garbage disposals)
- Itemized statement: Any deductions must be supported by an itemized list and supporting documentation, such as receipts or estimates, all provided within the 30-day window.
- The landlord must provide a comprehensive list of damages or issues found in the property, and tenants may submit a separate list if they disagree with the landlord’s assessment.
- Prohibited deductions: Routine maintenance and wear, such as faded paint, minor scuffs, normal carpet stains, or wear to even garbage disposals, cannot be charged to tenants as these are considered reasonable wear.
The present condition of the rental unit must be documented at both move-in and move-out to avoid disputes over the security deposit return and to ensure compliance with Massachusetts law.
Law Reference:Mass. Gen. Laws ch. 186, § 15B(4)
3. Interest Payments & Documentation Requirements
- Interest requirement: Landlords must pay interest to tenants on the tenant’s security deposit. The interest payable is 5% annual interest or the actual interest earned—whichever is less, including any accrued interest. Interest must be paid on the tenant’s security deposit:
- Annually, and
- At the end of the tenancy with the returned deposit.
Landlords must disclose to the tenant the bank holding the deposit. Multiple tenants’ security deposits can be kept in the same account, provided it is a separate, interest-bearing account. Depositing the tenant’s security deposit in the proper account is a legal requirement.
- Move-in condition statement: Within 10 days of receiving the deposit, landlords must give the tenant a written statement detailing the unit’s condition.
- Tenants have 15 days to review and contest or add comments.
The money from the tenant’s security deposit must be deposited in a separate account and is not the landlord’s property. The security deposit belongs to the tenant and must be handled in accordance with state law.
- Compliance risk: Failure to provide condition statements, receipts, or interest payments may cause the landlord to forfeit the entire deposit.
Law Reference:Mass. Gen. Laws ch. 186, § 15B(2)(b)-(d), (3)(a)
4. Penalties for Mishandling Security Deposits
Massachusetts imposes strict liability for violations—intent doesn’t matter. If a landlord fails to comply with security deposit law, the tenant may be entitled to the immediate return of the deposit.
- Forfeiture: Any failure to comply (missed deadlines, missing documentation, or improper storage) can result in automatic forfeiture of the deposit. Security deposits are protected from the landlord’s creditors, but a new owner must assume responsibility for the deposit when acquiring a property.
- Triple damages: If a landlord acts willfully or in bad faith, tenants can recover security deposit triple damages—up to three times the deposit amount—plus court costs and attorney’s fees. Triple damages may be awarded for willful violations.
- If a landlord refuses to return the deposit, tenants can take legal action to recover the deposit, including seeking reasonable attorney’s fees and court costs.
- Massachusetts landlords must strictly comply with the law to avoid these penalties.
Law Reference:Mass. Gen. Laws ch. 186, § 15B(6)(a)
Key Takeaways
- Landlords can charge only one month’s rent as a deposit (not first and last month’s rent)
- Deposits must be kept in a Massachusetts interest-bearing bank account with full disclosure to the tenant.
- Deposits must be returned within 30 days, with interest and an itemized list of deductions.
- Technical errors count—any mistake can trigger forfeiture or triple damages.
By carefully following Massachusetts security deposit laws, landlords can protect their investments and avoid costly penalties, while tenants gain assurance their funds are secure.
Disclaimer
Massachusetts law strictly regulates the security deposit return process, including strict deadlines and documentation requirements for both landlords and tenants.
- Return deadline: Landlords must return the security deposit within 30 days of the tenancy ending, unless deductions are justified by actual damage or other permissible reasons. If no permissible deductions are justified, the landlord must return the entire security deposit to the tenant.
- Permissible deductions:
- Unpaid rent
- Unpaid real estate taxes (if required by lease)
- Rental property damage or actual damage to the rental unit beyond reasonable wear
- Damages excluding normal wear and tear (not including reasonable wear such as a carpet stain that results from normal use over several years, normal carpet stains, or wear to even garbage disposals)
- Itemized statement: Any deductions must be supported by an itemized list and supporting documentation, such as receipts or estimates, all provided within the 30-day window.
- The landlord must provide a comprehensive list of damages or issues found in the property, and tenants may submit a separate list if they disagree with the landlord’s assessment.
- Prohibited deductions: Routine maintenance and wear, such as faded paint, minor scuffs, normal carpet stains, or wear to even garbage disposals, cannot be charged to tenants as these are considered reasonable wear.
The present condition of the rental unit must be documented at both move-in and move-out to avoid disputes over the security deposit return and to ensure compliance with Massachusetts law.
Law Reference:Mass. Gen. Laws ch. 186, § 15B(4)
