Many people I’ve explained this to don’t understand or refuse to understand the logic behind this warning. But be warned, this is almost a dead give-away that you’re dealing with a deadbeat.
Generally tenants don’t always find themselves in the best situations financially. Aside from some young professionals and students, chances are the person who is renting from you is struggling financially, or at the very least, is on a fixed income. Money these days is so cheap that most people with a steady job can afford to buy their own home and achieve their own version of the American Dream. Of course the “dream” is just a trap, but I won’t get into that here.
Whenever someone comes to rent an apartment from me and suggests paying cash the same day it raises a major red flag in my mind because it suggests that this person needs an apartment immediately. They’re likely trying to pull the wool over my eyes and get me to give them the key. Of course, giving someone the key closes the door on your rights in Massachusetts as a Landlord. Think of the keys as a symbol of your rights. Once they’re transferred so too are your rights as someone trying to bargain at arm’s length.
I can tell you with overwhelming confidence that accepting a security deposit in Massachusetts is the biggest (and one of the most common) mistakes a Landlord can make. If you ever meet an attorney who advises you to take a security deposit on a residential tenancy don’t walk.. RUN out of their office.
Why is this such a big deal? Chances are you know that when a landlord accepts a security deposit they’re supposed to put the money in an escrow account. Do yourselves a favor and take a look at the statute . What’s the first thing you notice about it? How about this? IT’S OVER 4 PAGES LONG.
Whereas something as complicated as the classification and taxation of recreational land statute is just over two paragraphs long, something as simple as the procedures outlining acceptance of a security deposit is 8 times as long. In our practice we have come across attorneys who have been practicing Landlord Tenant Law almost exclusively for over twenty years… when they get they get calls on security deposits they STILL have to look up the statute.
Some important things to keep in mind regarding the security deposit statute in MA:
When the landlord accepts one he/she must (amongst other things):
- give the tenant a statement of condition on the unit. This statement must also include specific language as stated in section 15B, 2(c).
- deposit the money in a separate interest bearing account. The landlord is also required to give to the tenant, within 30 days of receiving the deposit, a statement identifying the name and the location of the bank located in Massachusetts in which the security deposit is being held, the amount being held and the specific account number of the deposit.
- Provide an accounting of the escrow to the tenant yearly or otherwise provide a 5% interest penalty at the end of the tenancy
- Also, if there is damage in the unit withholding of any security deposit amount must adhere strictly to the statute. This includes providing the tenant written estimates for repair within 30 days of moving out and a statement signed by the landlord under the pains and penalties of perjury that the apartment was damaged.
Probably the most important (and troubling) part of this evil piece of legislation is the stiff penalties imposed on the landlord for anything other than their strict compliance. The statute makes noncompliance with the statute a violation of GL ch. 93A which exposes the landlord to liability for multiple damages, attorneys’ fees and costs. That means that if the landlord doesn’t comply with the statute perfectly when accepting a $1,500.00 security deposit he/she could be liable for $4,500.00 in damages+Tenant’s Attorneys’ Fees+costs. This is labeled by many landlords in Mass as the “Security Deposit Nightmare” and many have found themselves in just such a situation. Make no mistake about it, this statute is less about protecting the tenant than it is about punishing Massachusetts Landlords.
If you are a Landlord DO NOT accept security deposits in Massachusetts. Do yourself a favor and avoid having to call our office to ask for advice on how to go about getting out of your own security deposit nightmare.