| Quick Facts | Answer |
| Maximum / Limit | 1st Month’s Rent |
| Receipt Requirement | Required |
| Inventory Requirement | Required |
| Interest Requirement | Only After 1st Year |
To learn about laws on security deposit returns in Massachusetts, click here.
Some cities and counties may have regulations which are more restrictive than those presented here. Always check local laws.
Maximum Security Deposit Allowed in Massachusetts
Massachusetts law limits the maximum security deposit to an amount equal to the first month’s rent.
Can Landlords Charge an Additional Pet Deposit in Massachusetts?
Yes, in Massachusetts, landlords can charge a pet deposit, except for service dogs and emotional support animals. However, the total security deposit cannot exceed the first month’s rent. Landlords cannot exceed the limit by giving them another name like “pet deposit” or “damage deposit.”
This law does not prevent landlords from adding a monthly pet premium.
How Much Rent Can a Landlord Collect Upfront in Massachusetts?
In addition to the maximum security deposit, landlords in Massachusetts can collect no more than first and last months’ rent upfront.
If last month’s rent is collected in advance, it must be equal to the first month and the landlord must provide a receipt that includes:
- The amount of the payment and date it was received
- The purpose of the payment
- The name of the person receiving the payment
- A description of the rental property
- Whether the tenant is entitled to interest and the amount of interest (if the prepaid rent is placed in an interest-bearing account)
- Instructions to the tenant to provide a forwarding address at the end of the tenancy
Unlike a security deposit (which must be held in an interest-bearing account), landlords can choose where to hold last month’s rent because it is their money, not the tenant’s. However, if landlords choose to place the money in an interest-bearing account, the interest belongs to the tenant.
If a landlord chooses to place the prepaid rent in an interest-bearing account, it accrues from the first day of the tenancy to the day before the last month. The required rate of interest is the actual interest paid by the bank or 5%, whichever is lower.
If the prepaid rent gains interest, the landlord must pay or credit the tenant the interest on an annual basis as well as within 30 days after the lease ends.] At every anniversary of the lease, the landlord must either pay the interest to the tenant directly or send written notice to the tenant that they may deduct the amount from rent.
Security Deposit Collections in Massachusetts
When collecting a security deposit, landlords in Massachusetts must:
- Provide the tenant with a receipt
- Send written notice to the tenant documenting the condition of the rental unit
- Maintain a detailed record of security deposits collected
The detailed record of security deposits must include:
- A detailed description of damage to rental units for which the landlord accepted or returned a security deposit or sued a tenant
- Lease termination dates of any tenants who were charged for damage
- Details, dates, costs, and receipts for any repairs done relating to security deposits
- Written statements of damages completed when collecting security deposits
The detailed records must be kept for at least two years after each lease termination and must be available for any past, existing or prospective tenant to review during normal business hours.
Do Landlords Have To Provide a Receipt for the Security Deposit in Massachusetts?
Yes, landlords in Massachusetts must provide a receipt for the security deposit including:
- The amount of the security deposit
- The date it was received
- The name and signature of the person receiving it
- A description of the rental property
What Obligations Do Landlords Have To Establish the Condition at Move-in in Massachusetts?
Landlords in Massachusetts must provide a written statement describing the condition of the rental unit at the start of the lease term within ten days after the start of the tenancy.
The written statement must be signed by the landlord or their agent and include:
- A detailed summary of all existing damage to the rental unit
- Any existing sanitary or building safety code violations
- The following word-for-word statement in 12-point, bold-face font at the top of the first page:
This is a statement of the condition of the premises you have leased or rented. You should read it carefully in order to see if it is correct. If it is correct you must sign it. This will show that you agree that the list is correct and complete. If it is not correct, you must attach a separate signed list of any damage which you believe exists in the premises. This statement must be returned to the lessor or his agent within fifteen days after you receive this list or within fifteen days after you move in, whichever is later. If you do not return this list, within the specified time period, a court may later view your failure to return the list as your agreement that the list is complete and correct in any suit which you may bring to recover the security deposit.
The tenant must sign and return the statement (or a corrected statement if they disagree) to the landlord within 15 days after receipt of the statement or occupancy of the rental unit, whichever is later. If the landlord receives a corrected statement, they have 15 days to provide their response to the tenant.
Security Deposit Holdings in Massachusetts
Landlords in Massachusetts must hold security deposits in an interest-bearing bank account located within the state. The security deposits must not be commingled with the landlord’s own funds and must be held in a way that protects the funds from the landlord’s creditors.
Within 30 days after receipt of the security deposit, the landlord must provide the tenant with a receipt that includes the following information:
- Name and location of the bank
- Account number
- Amount of the deposit
If the landlord fails to comply with these holding requirements, the tenant is entitled to the immediate return of the security deposit.
Are Tenants Entitled to Interest on Their Security Deposit in Massachusetts?
Landlords in Massachusetts do owe interest on security deposits, but only if they’re held for one year or longer. The rate of interest must be 5% or the actual rate of interest paid by the bank, whichever is lower.
Interest accrues from the first day of the lease term. Once a tenant is entitled to interest on their security deposit, it must be either credited towards rent or paid to the tenant directly once per year. Each year, at the anniversary of the lease, the landlord must send a written statement to the tenant including:
- Name and location of the bank
- Account number
- Amount of interest due
- Payment of the interest or a statement that the tenant can deduct the amount from rent
If the tenant has not received the written statement by 30 days past its due date, they have the right to deduct the interest from rent.
How Are Security Deposits Accounted for in Massachusetts?
Security deposits are not considered taxable income when they are collected.
What Happens to a Security Deposit When the Property is Sold in Massachusetts?
When a property is sold in Massachusetts, the landlord must transfer the security deposit along with interest to the new owner, who must handle it according to the same rules. The new landlord or their agent must notify the tenant in writing within 45 days of the receipt of the security deposit.
The written notice must state that they received the security deposit and must include the name, business address, and telephone number of the landlord and/or their agent.
Sources
- 1 Mass. Gen. Laws ch. 186 § 15B(1)(b)
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At or prior to the commencement of any tenancy, no lessor may require a tenant or prospective tenant to pay any amount in excess of the following:
(i) rent for the first full month of occupancy; and,
(ii) rent for the last full month of occupancy calculated at the same rate as the first month; and,
(iii) a security deposit equal to the first month’s rent provided that such security deposit is deposited as required by subsection (3) and that the tenant is given the statement of condition as required by subsection (2) provided, however, that the executive office of housing and livable communities may promulgate regulations to authorize a lessor and a tenant or prospective tenant to agree to the payment of a fee in lieu of payment of a security deposit; provided further, that any such regulations shall:
(A) require the lessor to utilize a fee collected to waive a security deposit to cover for unpaid rent or unit damage that applies to the tenant’s lease;
(B) require that a fee so collected be:
(I) entirely or partially non-refundable; provided, however, that the lessor shall disclose that the fee is non-refundable in the lease; provided further, that the tenant shall agree to the fee and acknowledge that the tenant understand that it is entirely or partially non-refundable, as the case may be, in writing; and
(II) a recurring monthly fee, or payable upon any schedule and in an amount that the lessor and tenant agree upon, as authorized by the executive office;
(C) limit the total sum of the fee or recurring payments, regardless of the duration of the lease and any extensions thereto, to an amount not to exceed 1 month’s rent;
(D) require that the fee be made optional for both the tenant and the lessor and that the tenant be permitted to choose to pay a full security deposit rather than the fee;
(E) require a lessor who offers such a fee in lieu of security deposit:
(I) to offer the option of a fee in lieu of a security deposit to every prospective tenant whose application for occupancy has been approved, regardless of income, race, gender, gender identity, disability, sexual orientation, immigration status, size of household or credit score; and
(II) not to consider such factors and categories when setting the amount of the fee; and
(F) allow a tenant who agrees to pay a fee to waive a security deposit to opt-out of the obligation to pay such fee if such tenant pays the security deposit that would otherwise be in effect for the tenant’s apartment on the day the tenant chooses to opt-out of such fee; provided further, that the sum of fees paid to waive a security deposit and the payment of the security deposit shall not exceed, in total, the amount of 1 month’s rent; and provided further, that the executive office shall consult with the office of the attorney general prior to promulgating regulations authorizing a fee in lieu of a security deposit under this section; and
(iv) the purchase and installation cost for a key and lock.
Source Link - 2 Flemming v. Greystar Mgmt. Servs., 177 N.E.3d 1244, 1249 (Mass. App. Ct. 2021)
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Animal rent … [is] not a deposit intended to secure performance to keep the apartment free from damage. Rather, it… [is] additional rent, which… [the tenant agrees] to pay, in exchange for the right to keep… [pets] in the apartment.
Source Link - 3 Mass. Gen. Laws ch. 186 § 15B(2)(a)
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Any lessor or his agent who receives, at or prior to the commencement of a tenancy, rent in advance for the last month of the tenancy from a tenant or prospective tenant shall give to such tenant or prospective tenant at the time of such advance payment a receipt indicating the amount of such rent, the date on which it was received, its intended application as rent for the last month of the tenancy, the name of the person receiving it and, in the case of an agent, the name of the lessor for whom the rent is received, and a description of the rented or leased premises, and a statement indicating that the tenant is entitled to interest on said rent payment at the rate of five per cent per year or other such lesser amount of interest as has been received from the bank where the deposit has been held payable in accordance with the provisions of this clause, and a statement indicating that the tenant should provide the lessor with a forwarding address at the termination of the tenancy indicating where such interest may be given or sent.Any lessor or his agent who receives said rent in advance for the last month of tenancy shall, beginning with the first day of tenancy, pay interest at the rate of five per cent per year or other such lesser amount of interest as has been received from the bank where the deposit has been held. Such interest shall be paid over to the tenant each year as provided in this clause; provided, however, that in the event that the tenancy is terminated before the anniversary date of such tenancy, the tenant shall receive all accrued interest within thirty days of such termination. Interest shall not accrue for the last month for which rent was paid in advance. At the end of each year of tenancy, such lessor shall give or send to the tenant from whom rent in advance was collected a statement which shall indicate the amount payable by such lessor to the tenant. The lessor shall at the same time give or send to such tenant the interest which is due or shall notify the tenant that he may deduct the interest from the next rental payment of such tenant. If, after thirty days from the end of each year of the tenancy, the tenant has not received said interest due or said notice to deduct the interest from the next rental payment, the tenant may deduct from his next rent payment the interest due.If the lessor fails to pay any interest to which the tenant is then entitled within thirty days after the termination of the tenancy, the tenant upon proof of the same in an action against the lessor shall be awarded damages in an amount equal to three times the amount of interest to which the tenant is entitled, together with court costs and reasonable attorneys fees.
Source Link - 4 Gallo v. Marinelli, 90 Mass. App. Ct. 1107, (Mass. App. Ct. 2016)
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Only when the lessor places a tenant’s last month’s rent in an interest-bearing account is the tenant entitled to interest.Source Link
- 5 Mass. Gen. Laws ch. 186 § 15B(3)(b)
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A lessor of residential real property who holds a security deposit pursuant to this section for a period of one year or longer from the commencement of the term of the tenancy shall, beginning with the first day of the tenancy, pay interest at the rate of five per cent per year, or other such lesser amount of interest as has been received from the bank where the deposit has been held payable to the tenant at the end of each year of the tenancy. Such interest shall be paid over to the tenant each year as provided in this clause, provided, however, that in the event that the tenancy is terminated before the anniversary date of the tenancy, the tenant shall receive all accrued interest within thirty days of such termination. Such interest shall be beyond the claims of such lessor, except as provided for in this section. At the end of each year of a tenancy, such lessor shall give or send to the tenant from whom a security deposit has been received a statement which shall indicate the name and address of the bank in which the security deposit has been placed, the amount of the deposit, the account number, and the amount of interest payable by such lessor to the tenant. The lessor shall at the same time give or send to each such tenant the interest which is due or shall include with the statement required by this clause a notification that the tenant may deduct the interest from the tenant’s next rental payment. If, after thirty days from the end of each year of the tenancy, the tenant has not received such notice or payment, the tenant may deduct from his next rent payment the interest due.
Source Link - 6 Mass. Gen. Laws ch. 186 § 15B(2)(d)
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Every lessor who accepts a security deposit shall maintain a record of all such security deposits received which contains the following information:
(i) a detailed description of any damage done to each of the dwelling units or premises for which a security deposit has been accepted, returned to any tenant thereof or for which the lessor has brought suit against any tenant;
(ii) the date upon which the occupancy of the tenant or tenants charged with such damage was terminated; and
(iii) whether repairs were performed to remedy such damage, the dates of said repairs, the cost thereof, and receipts therefor.
Said record shall also include copies of any receipt or statement of condition given to a tenant or prospective tenant as required by this section.
Said record shall be available for inspection upon request of a tenant or prospective tenant during normal business hours in the office of the lessor or his agent. Upon a wrongful failure by the lessor or his agent to make such record available for inspection by a tenant or prospective tenant, said tenant or prospective tenant shall be entitled to the immediate return of any amount paid in the form of a security deposit together with any interest which has accrued thereon.
The lessor or his agent shall maintain said record for each dwelling unit or premises for which a security deposit was accepted for a period of two years from the date of termination of the tenancy or occupancy upon which the security deposit was conditioned.
Source Link - 7 Mass. Gen. Laws ch. 186 § 15B(2)(c)
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Any lessor of residential real property, or his agent, who accepts a security deposit from a tenant or prospective tenant shall, upon receipt of such security deposit, or within ten days after commencement of the tenancy, whichever is later, furnish to such tenant or prospective tenant a separate written statement of the present condition of the premises to be leased or rented. Such written statement shall also contain a comprehensive listing of any damage then existing in the premises, including, but not limited to, any violations of the state sanitary or state building codes certified by a local board of health or building official or adjudicated by a court and then existing in the premises. Such statement shall be signed by the lessor or his agent and contain the following notice in twelve-point bold-face type at the top of the first page thereof:
“This is a statement of the condition of the premises you have leased or rented. You should read it carefully in order to see if it is correct. If it is correct you must sign it. This will show that you agree that the list is correct and complete. If it is not correct, you must attach a separate signed list of any damage which you believe exists in the premises. This statement must be returned to the lessor or his agent within fifteen days after you receive this list or within fifteen days after you move in, whichever is later. If you do not return this list, within the specified time period, a court may later view your failure to return the list as your agreement that the list is complete and correct in any suit which you may bring to recover the security deposit.”
If the tenant submits to the lessor or his agent a separate list of damages, the lessor or his agent shall, within fifteen days of receiving said separate list, return a copy of said list to the tenant with either such lessor’s signed agreement with the content thereof or a clear statement of disagreement attached.
Source Link - 8 Mass. Gen. Laws ch. 186 § 15B(3)(a)
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Any security deposit received by such lessor shall be held in a separate, interest-bearing account in a bank, located within the commonwealth under such terms as will place such deposit beyond the claim of creditors of the lessor, including a foreclosing mortgagee or trustee in bankruptcy, and as will provide for its transfer to a subsequent owner of said property. A receipt shall be given to the tenant within thirty days after such deposit is received by the lessor which receipt shall indicate the name and location of the bank in which the security deposit has been deposited and the amount and account number of said deposit. Failure to comply with this paragraph shall entitle the tenant to immediate return of the security deposit.
Source Link - 9 Mass. Gen. Laws ch. 186 § 15B(5)
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Whenever a lessor who receives a security deposit transfers his interest in the dwelling unit for which the security deposit is held, whether by sale, assignment, death, appointment of a receiver or trustee in bankruptcy, or otherwise, the lessor shall transfer such security deposit together with any interest which has accrued thereon for the benefit of the tenant who made such security deposit to his successor in interest, and said successor in interest shall be liable for the retention and return of said security deposit in accordance with the provisions of this section from the date upon which said transfer is made; provided however, that the granting of a mortgage on such premises shall not be a transfer of interest. The successor in interest shall, within forty-five days from the date of said transfer, notify the tenant who made such security deposit that such security deposit was transferred to him and that he is holding said security deposit. Such notice shall also contain the lessor’s name, business address, and business telephone number, and the name, business address, and business telephone number of his agent, if any. Said notice shall be in writing.
Upon such transfer, the lessor or his agent shall continue to be liable with respect to the provisions of this section until:
(a) there has been a transfer of the amount of the security deposit so held to the lessor’s successor in interest and the tenant has been notified in writing of the transfer and of the successor in interest’s name, business address, and business telephone number;
(b) there has been compliance with this clause by the successor in interest; or
(c) the security deposit has been returned to the tenant.In the event that the lessor fails to transfer said security deposit to his successor in interest as required by this subsection the successor in interest shall, without regard to the nature of the transfer, assume liability for payment of the security deposit to the tenant in accordance with the provisions of this section; provided, however, that if the tenant still occupies the dwelling unit for which the security deposit was given, said successor in interest may satisfy such obligation by granting the tenant free use and occupancy of the dwelling unit for a period of time equivalent to that period of time for which the dwelling unit could be leased or occupied if the security deposit were deemed to be rent. The liability imposed by this paragraph shall not apply to a city or town which acquires title to property pursuant to chapter sixty or to a foreclosing mortgagee or a mortgagee in possession which is a financial institution chartered by the commonwealth or the United States. The term “rent”, as used in the preceding sentence, shall mean the periodic sum paid by the tenant for the use and occupation of the dwelling unit in accordance with the terms of his lease or other rental agreement.
Source Link
