Protecting Your Security Deposit Maureen McDonagh Legal Services Center of Harvard Law School Mass. Law Reform Institute Mass Continuing Legal Education Basic Benefits Training

How Much Can a Landlord Charge When Tenant Moves In Only first month’s, last month’s, security deposit each equal to 1 month’s rent + key deposit GET A RECEIPT – Never give landlord cash If LL charges more or does not give tenant a receipt – violation of Consumer Protection Act and tenant has right to security deposit back

Security Deposit and Last Months Rent Receipt

Illegal Fees Against law for landlords to charge holding deposits, pet fees, cleaning fees, credit check or application fees Real estate broker (not the landlord) may charge finder’s/broker’s fees If landlord tries to charge illegal fee can refuse to pay it or pay it and get an itemized receipt for extra fees and after move in subtract from rent

Statement of Condition If LL charges a security deposit, has 10 days to get tenant a Statement of Condition. Statement must list existing damages in apartment Tenant can dispute Statement No remedy in statute: merely technical or violation of Consumer Protection Statute Tenant can do their own Statement

Form 3: Statement of Condition How to Use This Form If your landlord takes a security deposit from you, she is required by law to give you a Statement of Condition. If she does not, you can use the form on the next page to document the condition of your apartment when you first move in. How to Fill Out This Form When you first move in, examine every room of the place you are renting and all the common areas you share with other tenants. Use Booklet 2: Housing Code Checklist to help you. It will tell you what to look for. As you examine each room, write down any problems that you see. Date and sign this statement. Make a copy for your records and send a copy to your landlord. Note: If there are conditions that are serious, you should notify your landlord as soon as possible. If there are only minor problems (such as small holes in the wall), you may want to consider waiting until you have been in your apartment for awhile, have paid the rent, and your landlord sees that you are a responsible tenant before you give her this statement. You should still, however, complete the statement as soon as you move in and indicate even minor problems in the statement.

Records of Deposits and Repairs Landlord must keep Security Deposit and Repair records for 2 years for all tenants Records must show when L took Security Deposit, detailed description of any damage when repairs made, receipts and cost of repairs Tenant or anyone interested in renting has right to inspect records. If landlord refuses to let tenant see records, tenant has right to refund of deposit.

Separate Bank Account Landlord must keep SD in separate, interest-bearing account, beyond the reach of Landlords’ creditors. Cannot commingling with Landlord’s money If landlord fails to establish separate account, tenant can ask for return of 3 times deposit plus interest costs and attorneys fees

Notification of Separate Account - Receipt 2 Landlord has 30 days to put security deposit in separate bank account. Must then give tenant a 2nd receipt for security deposit with location and name of bank, account number, and amount of deposit. If landlord does not give tenant receipt with the right information, tenant has right to security deposit back. Landlord cannot cure and provide information about account after tenant has made the demand.

Pay Interest Annually Landlord must pay tenant yearly interest on security deposit in the amount earned or 5% annually. Must pay once a year at end of each year. Landlord must send statement with bank name, address, acct #, amount of deposit, and interest owed to T Landlord must either pay you interest owned or explain that you can deduct from your next rent. If 30 days pass after anniversary date of tenancy and have received no interest or statement, tenant may deduct interest from next rent payment. If tenancy ends early, pay all accrued interest within 30 days of term of tenancy

Return of Security Deposit Landlord must return security deposit within 30 days of end of the term of tenancy if no damage If written lease, landlord has until 30 days after the last day of lease. If no lease, tenancy ends day move out and landlord must return within 30 days of move out. In an eviction case, 30 day period begins to run on date when the LL wins judgment for possession, not on date T actually vacates her apt.

Return of Security Deposit Landlord must give tenant itemized list of damage within 30 days after move out Bad record keeping is not an excuse for holding deposit Violation may entitle tenant to treble damages, interest, costs, attorneys fees

Itemize Deductions At termination of tenancy, landlord can deduct for unpaid rent, real estate taxes, damage to apt caused by T or household Can deduct reasonable amount necessary to repair Cannot deduct for reasonable wear and tear Cannot deduct for anything listed in the Statement of Condition. Landlord must list of deductions, written evidence such as estimates, bills, invoices or receipts

Itemize Deductions If landlord makes improper deductions, or fails to provide itemized list, tenant can request immediate return deposit Landlord gives up the right to retain security deposit for any reason and may not counterclaim for damages if tenant brings lawsuit to recover her deposit Landlord may be liable for triple damages.

Protecting Security Deposit Before Moving Out Take photos of all rooms to prove conditions Ask landlord to inspect apartment and do walk around together Bring Statement of Condition If any damage beyond reasonable wear and tear make a list together sign and get a copy If landlord refuses to inspect make your own list of damages and/or improvements Make sure landlord has address that deposit can be sent to after you move

Getting Security Deposit Back If the landlord fails to return security deposit or violates law, tenant can send demand letter. If landlord does not respond to demand letter can take landlord to court and ask for three times the deposit

Demand Letter – Tenants in Apartment

Demand Letter – Tenants Moving Out

Transfer to New Owner Landlord must transfer security deposit to new owner if: Sale, assignment, death, appointment of receiver or trustee in bankruptcy, etc. Forward each SD, w/interest to new owner NEW LL must notify the T’s in writing w/in 45 days after gets property that has received security deposit with new landlord’s name, address, telephone #

Transfer to New Owner If prior landlord does not give security deposit to new owner, new owner is accountable as if he had actually received it. Tenant cannot be made to pay a new or additional security deposit. New owner must comply with all provisions of security deposit law and put deposit separate account, provide interest annually, notify tenant of location of account. Old landlord remains accountable until deposit transferred and tenants have notice, or new landlord refunds – then old landlord is off the hook, even if she mishandled security. If old landlord doesn’t properly transfer to new owner court can award tenant triple damages.

Bad Language in Lease is Void If language in a lease conflicts with security deposit law: Landlord cannot seek voluntary waiver by tenant of law If landlord attempts to enforce such a lease, must immediately give up security deposit

Money from Other Sources If DTA or other PA pays a security deposit on behalf of tenant, tenant retains all rights as if had paid by self Tenant not DTA, is entitled to return of deposit or damages

Last Month’s Rent Similar rules Receipt, 5% annual interest, transfer to successor in interest Does not have to be in a separate account No provision for return of last month’s rent