Massachusetts has one of the nation's strictest security deposit laws. A landlord may collect no more than one month's rent as a security deposit, must hold it in a separate interest-bearing Massachusetts bank account, provide a receipt and a written statement of condition, pay annual interest, and return the deposit within 30 days after tenancy ends.
Under Mass. Gen. Laws ch. 186, sec. 15B, a residential security deposit cannot exceed the first month's rent. The deposit must be held "in a separate, interest-bearing account in a bank, located within the commonwealth" beyond the reach of the landlord's creditors, and the tenant must receive a receipt naming the bank plus a written statement of the premises' condition. Interest accrues at five percent per year (or the lesser rate the bank pays) and must be paid to the tenant annually and at termination. The landlord must "within thirty days after the termination of occupancy" return the deposit or any balance, with an itemized list of any deductions for unpaid rent or damage beyond reasonable wear and tear.
Failure to hold the deposit in a separate interest-bearing account, return it within 30 days, or provide required statements can entitle the tenant to three times (treble) the deposit amount, plus 5% interest, court costs, and reasonable attorney's fees under Mass. Gen. Laws ch. 186, sec. 15B(6)-(7).
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