Legal Services for Cape Cod and Islands, Inc.
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FIRST, LAST & SECURITY



Produced by:

Legal Services for Cape Cod and Islands, Inc.


INTRODUCTION


This pamphlet is intended as a basic reference for tenants who are just moving into a rental house or apartment and those who are in the process of moving out. This pamphlet contains information on what fees and deposits your landlord can legally require before you move in, and also information on how your landlord must handle your deposits during and after your tenancy. Furthermore, this pamphlet describes your rights and responsibilities regarding payment of deposits to your landlord, including how to ensure the full return of any money you a-re entitled to.

Much of the information contained in this pamphlet has been taken from MGL c. 186 § 15B, 940 CMR 3.17 § 4, and Legal Tactics: Self Defense for Tenants in Massachusetts, by the Massachusetts Chapter of the National Lawyers Guild, edited by Marshall T. Spriggs and Charlie Harak. For more information on other issues regarding tenants rights see these sources.


FIRST, LAST and SECURITY
BEFORE YOU MOVE IN
When you rent an apartment or house, your landlord may require prepayment of certain fees or deposits. The landlord can only legally require you to prepay the following:

a) first month's rent;
b) last month's rent;
c) cost and installation of a new key and lock;
d) security deposit.

When you pre-pay any fees or deposits to your landlord, it is always advisable to get a written signed and dated receipt. The law requires specific types of receipts for payments of the last month's rent deposit and security deposit.


LAST MONTH'S RENT DEPOSIT
The deposit for the last month's rent is intended as payment for unpaid rent. If your landlord requires that you prepay the last month's rent, the amount cannot be more than the first month's rent. You are entitled to interest on this deposit at a rate of 5 %. The interest must be paid to you at the end of each rental year. You may deduct the amount of the interest from your next month's rent at the direction of your landlord.

When you pay your landlord the last month's rent, he or she must provide you with a written and signed receipt. The receipt must contain the following information:

a) amount paid;
b) date paid;
c) name of person receiving it;
d) your landlord's name;
e) description of the rental unit;
f) a statement describing the deposit as payment for rent for the last month of the rental period;
g) a statement describing the tenant's right to be paid interest on the deposit.

If your landlord sells or transfers ownership of your rental unit, he or she must 'credit' the last month's rent deposit and any accrued interest to the new landlord. The new landlord must notify you in writing (within 45 days) and is responsible for the deposit.


SECURITY DEPOSIT

Your landlord may require prepayment of a security deposit. The amount of the security deposit cannot be more than one month's rent. The purpose of the security deposit is to protect the landlord in case you damage the apartment or leave without paying all your rent. The law protects you in case your landlord tries to charge you for damage you did not cause, or "forgets" to return your deposit when you move out.

The security deposit is different from the last month's rent deposit in the following ways:

a) it can be applied to both damage repair costs and unpaid rent;
b) the law provides stricter requirements on how the landlord maintains the deposit;
c) it is normally returned in part or in full.


MOVING IN

When your landlord collects a security deposit, he or she is required to:

1. provide you with a written receipt;
2. place the security deposit in an interest bearing bank account;
3. provide you with a written receipt regarding the bank account;
4. provide you with a "Statement of Condition".


1. The written receipt for the security deposit must include the following:

a) date the security deposit was received;
b) amount of the security deposit;
c) name of the person receiving deposit;
d) description of premises leased.


2. The landlord must deposit your security deposit in an interest bearing bank account. This bank account must be separate from his or her own personal accounts and must be within the state of Massachusetts. This bank account must be protected from the landlord's creditors.

3. Within 30 days of receipt of the security deposit, the landlord must provide you with a written receipt indicating the name and location of the bank in which the security deposit is being held. This receipt must also show the amount and the account number of the deposit. You may want to contact the bank to verify this information.

4. The "Statement of Condition" is a written statement describing the present physical condition of your rental unit. This statement is written by your landlord and must list any and all damage existing in the premises at the time you move in. The purpose of the Statement of Condition is to identify any pre-existing damage to the landlord's property so that you cannot be blamed and charged for it when you move out.

Your landlord must give you this Statement when he or she takes the security deposit or within 10 days after you move in. You must sign and return the Statement of Condition within 15 days. You should inspect the premises carefully to determine if your landlord's Statement is complete and accurate.

If you are not satisfied with your landlord's Statement of Condition, or if you disagree with the Statement, you should attach your own Statement to the landlord's Statement. This is known as the 'Tenant's Statement of Condition". Your Statement of Condition should describe any damage found in the rental unit which was not listed on the landlord's statement. Your landlord is then required to respond to your letter within 15 days.

If you do not respond to the landlord's initial Statement of Condition within the 15 day period, the Statement could very likely be considered correct and accurate. This may cause problems for you should any discrepancies arise regarding damage to the rental unit. Therefore, you should plan ahead and correct, sign and return the Statement of Condition within the 15 day period, and/or submit your own Statement of Condition to your landlord. Be sure to keep a copy of the Statement of Condition and any additional statements.


INTEREST ON THE SECURITY SEPOSIT

Your landlord must pay you interest on the security deposit at a rate of 5 %, if it is held one year or longer. Within 30 days after the end of each rental year, the landlord must give you the amount of money earned as interest on the security deposit in the previous year. You may deduct the amount of the interest from your next month's rent at the direction of the landlord.


CHANGE IN LANDLORD

If your landlord sells or transfers ownership in the rental property, he or she must also transfer the security deposit and interest to the new landlord. The new landlord must notify you within 45 days that he or she now holds the security deposit. The written notice must include the new landlord's name, business address and telephone number. Whether or not the new or old landlord complies with these requirements, the new landlord is responsible for the deposit.


WHILE YOU ARE A TENANT
You may have a right to the return of your security deposit during the rental period if your landlord (1) fails to place the security deposit in the proper type of bank account, and/or (2) fails to provide you with the proper receipt regarding the bank account.


BEFORE MOVING OUT

Before moving out of the rental unit, you should arrange to be present while the landlord inspects the apartment. You may want to have another person present as a witness for the inspection. If both you and the landlord reach an agreement regarding damage or lack of damage to the premises, a statement to that effect should be written and signed by both parties. If you and your landlord cannot agree on damage, you should take pictures of the areas that the landlord claims have been damaged. You should also make and keep detailed notes regarding the condition of the apartment.

If the landlord does not agree to conduct an inspection of the premises with you, you should make an inspection yourself. You should take pictures of any damage or areas the landlord may consider damaged.


MOVING OUT

The landlord must return the security deposit and interest to you within 30 days from the day you move out. The landlord may deduct from the security deposit the following:

a. any unpaid rent, unless you had properly withheld rent for bad conditions or other violations by the landlord;

b. a reasonable amount of repair costs for damage caused by you, your family members or guests. The landlord is NOT entitled to take deductions from the security deposit for "reasonable wear and tear' on the premises.

If your landlord takes deductions for repair costs, he or she must provide you with an itemized list of damage, describing in detail the kind of damage, the repairs that are necessary and the cost. Your landlord must attach written estimates or receipts for repairs and receipts for materials to this list. Your landlord cannot deduct for any damage listed on the "Statement of Condition' from the beginning of the tenancy, or for any damage listed on any statement that you submitted to the landlord at the beginning of the tenancy.


GETTING YOUR SECURITY DEPOSIT BACK

If the landlord fails to return the security deposit within 30 days after you move out, you may sue the landlord.

You may be entitled to the return of the full security deposit plus up to three times the amount of the deposit (treble damages), if the landlord:

a. fails to place the security deposit in a separate bank account and provide you with a receipt listing the bank's name and location, the amount and account number;

b. fails to transfer the security deposit to a new owner;

c. fails to return the security deposit or balance and interest due within 30 days after you move out.

In order to force the landlord to return the security deposit you may have to sue. If you are claiming no more than $1,500.00, you can sue in Small Claims Court, which is part of District Court. If you are claiming more than $1,500.00, the suit must be brought in regular District Court or Superior Court. Small Claims Court uses a simplified procedure that people without lawyers can participate in more easily than the regular courts. However, in Small Claims Court there are no jury trials and no appeals.

To file a claim in Small Claims Court, you should go to the local District Courthouse and complete a "Statement of Claim and Notice" form. This form may be filed by mail. The Small Claims clerk is available to assist you with this form. You will be required to pay a small filing fee. The clerk will give a copy of the form to you and mail a copy to the landlord. A hearing will be scheduled and you and your landlord will have an opportunity to explain each of your positions to the Judge. You should bring any documentation, pictures and other evidence that supports your claim to this hearing.


IMPORTANT NOTES:

On important matters, you should always communicate with the landlord in writing. You should keep a copy of the letters. In some situations, you may want to send the letters by certified mail, return receipt requested. You should keep the lease and any receipts, statements, letters and photographs relating to the tenancy in a safe place which is readily accessible should a dispute arise.

Sometimes a tenant may pre-pay a sum of money to his or her landlord, but it is unclear whether it is a last month's rent deposit or a security deposit. Remember, it is to your advantage to have the deposit viewed as a security deposit under the law because the landlord can be sued for triple the amount if it is a security deposit. Remember also, the landlord was required to state in writing, on a receipt, that the money was for last month's rent, in order to collect that type of deposit. So, if he or she did not do so, you can perhaps claim that the money must be considered, in the eyes of the law, a security deposit.

It is not certain under the law that this argument works. In this situation, it would be preferable to have an attorney make this argument in court.
Disclaimer: LSCCI makes no warranties or representations as to the legality or applicability of these materials to your situation; at all times, you are strongly encouraged to seek the advice of a competent attorney. If you have a legal problem, please call LSCCI to determine if you are income eligible for our services or for a referral to a private attorney. If you are an elder living on Cape Cod, Nantucket, or Martha's Vineyard, we may also be able to help you.

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