A basic understanding of Massachusetts security deposit law can help landlords avoid harmful mistakes such as missed return deadlines, incorrect storage, or disputes over deductions.
This guide outlines everything landlords need to know about these rules, including the maximum amounts they may collect, proper storage methods, required interest, valid reasons to deduct, steps for returning deposits, dispute procedures, and more.
Statutes Regulating Massachusetts Security Deposits
Massachusetts’s security deposit regulations appear in Chapter 186, Section 15B of the Massachusetts General Laws. These regulations guide how landlords collect deposits, store funds, pay required interest, document any deductions, and return the deposit within the legal timeline.
Maximum Security Deposit Amounts Under Massachusetts Law
Massachusetts law prohibits landlords from collecting more than 1 month’s rent as a security deposit. This rule applies to every residential rental agreement, so property owners follow the same cap whether they use fixed-term leases or month-to-month arrangements.
Massachusetts offers no exceptions that permit landlords to request more than 1 month’s rent as a security deposit.
Security Deposit Storage Regulations
Massachusetts requires landlords to keep every security deposit in a separate, interest-bearing bank account located in Massachusetts. Landlords must also give tenants a receipt and written notice within 30 days that identifies the bank and confirms the amount held, so tenants understand exactly where their funds are being held.
For example, a landlord cannot store a tenant’s deposit in a personal or business operating account that mixes rental income with security deposit funds.
Security Deposit Interest in Massachusetts
Massachusetts requires landlords to keep security deposits in interest-bearing accounts so tenants earn interest on the funds held throughout the tenancy.
During the tenant, landlords must pay tenants either the interest the bank actually earns or 5 percent interest, whichever amount is lower. They must issue this interest every year within 30 days of the deposit anniversary and again at the end of the tenancy, along with clear documentation for the tenant to reference.
Making Security Deposit Deductions
Security deposit deductions allow landlords to protect the overall condition of a rental property. When tenants default on rent payments or leave behind significant damage landlords rely on deposits to cover the expenses.
When Landlords Can Deduct
Massachusetts landlords may deduct from a tenant’s security deposit for the following reasons:
- Repair damage beyond normal wear and tear noted on the inspection report.
- Replace missing or damaged items listed on the move-in condition statement.
- Cover unpaid rent that remains outstanding at the end of the tenancy.
- Pay water charges that the lease assigns to the tenant but remain unpaid.
- Recover costs related to property tax escalations permitted under the lease.
When Landlords Can’t Deduct
Massachusetts landlords may not deduct from a tenant’s security deposit for the following reasons:
- Routine cleaning that reflects ordinary use during a completed tenancy.
- Minor cosmetic wear that occurs naturally without harming the unit’s function.
- Improvements or upgrades that raise the property’s overall value.
- Repairs for issues already recorded on the original move-in inspection report.
- Maintenance that landlords must complete under existing legal requirements.
Necessary Documentation to Accompany Deductions
Massachusetts landlords must provide tenants with a sworn, itemized list of all deductions, along with receipts, invoices, or written estimates supporting each charge. Landlords must provide this information to tenants within 30 days after the tenancy ends so tenants can see precisely how each deduction was calculated.
What to Do When Deductions are Greater Than the Deposit
Sometimes tenant damage goes beyond what the security deposit can cover, and landlords need to recover the remaining balance. Massachusetts landlords may request payment directly from former tenants and should keep detailed records of all repair costs. Even when damages exceed the deposit, landlords still must issue the sworn itemized list within 30 days.
If landlords cannot collect the remaining balance, they can file a claim through Massachusetts small claims court or send the matter to a collections agency.
Returning Security Deposits to Tenants
Massachusetts law outlines clear rules for returning any remaining portion of a tenant’s security deposit after eligible deductions. These requirements help landlords follow a consistent process and give tenants confidence in how their funds come back.
Required Timeline for Return
Massachusetts landlords must return any remaining security deposit within 30 days after the tenancy ends. The 30 day period starts on the day the tenant vacates, and landlords must issue the refund and the sworn itemized deduction list within this window to meet state requirements.
Method for Return
Massachusetts landlords must return the tenant’s security deposit by providing a check or another traceable payment method to the tenant. Along with the payment, landlords must include a sworn, itemized list of deductions with supporting documents so tenants can see how the landlord calculated the final amount.
Penalties for Late Return
Massachusetts enforces strong penalties when landlords miss deadlines or handle returns improperly. If a violation occurs, landlords may need to return the full deposit, pay triple damages, cover the tenant’s attorney fees, and lose the right to keep any portion of the deposit, even amounts tied to valid deductions.
Security Deposit Disputes
If a tenant disagrees with how a landlord handles a security deposit, the tenant has every right to raise a dispute. Tenants usually begin by asking for clarification in writing and may pursue mediation, formal complaints, or legal action if they believe the landlord handled the deposit incorrectly.
As a landlord, prepare for potential disputes by using move-in and move-out checklist tools, staying current with accounting and bookkeeping, and setting clear expectations within your lease agreement. Thorough documentation, consistent communication, and strict compliance with Massachusetts laws also help landlords manage disputes more confidently.
Using Condition Reports to Document Damage
When handling security deposits in Massachusetts, landlords should always use move-in and move-out condition reports that document the property’s condition at key points. Doing so can help reduce disputes, clarify responsibility for damage, and make deductions more cut-and-dry.
To do so, use property management software to create digital reports with photos and videos directly from a smartphone. Documenting a unit before move-in and after move-out will give you all the evidence you need to make deductions straightforward and far less negotiable.
Sign up for a free TurboTenant account to streamline documentation and strengthen rental recordkeeping from move-in to move-out.
FAQs: Massachusetts Security Deposit Law
Can a landlord deduct painting from a security deposit in Massachusetts?
A Massachusetts landlord may deduct painting costs only when tenant damage goes beyond normal wear and tear. Routine repainting between tenants does not qualify, but charges for major markings, stains, or unauthorized colors may be deducted when supported by a sworn itemized list.
Are nail holes considered normal wear and tear in Massachusetts?
Yes. Small nail holes usually count as normal wear and tear in Massachusetts, so landlords cannot deduct for them. Larger holes, torn drywall, or heavy wall damage may qualify as tenant-caused issues when documented clearly, allowing landlords to deduct those repair costs from the security deposit.
Does the landlord or tenant have to pay for carpet cleaning in Massachusetts?
Landlords cannot deduct for routine carpet cleaning because Massachusetts treats it as a standard turnover cost. When tenants leave excessive stains, odors, or significant carpet damage, landlords may charge for cleaning or replacement if they document the condition and include it in the sworn itemized list.
What happens if a landlord doesn’t return a security deposit within 30 days in Massachusetts?
If a landlord in Massachusetts misses the 30-day deadline, they lose the right to make deductions and may owe the tenant triple damages, attorney fees, and the full deposit. These steep penalties encourage landlords to follow the return process accurately and on time.
