My Tenant Left a Mess in Her Apartment. She’s Demanding Her Security Deposit Back. Can I Deduct the Costs to Repair the Damages from the Security Deposit?

My tenant walked out on her month-to-month tenancy at my six-family apartment building. She left the apartment in a mess. I collected a security deposit at the beginning of the rental and want to deduct the costs of clean up from it. But, the tenant is demanding the security deposit back claiming that I didn’t follow the law. Should I return it?

The Massachusetts security deposit law is very complicated and very strict and unless you followed it very specifically, it would probably be safer for you to return it than face the possible liability for violating the law.

Under Massachusetts General Laws Chapter 186, section 15B, there are basically 3 major requirements that a landlord must follow when he collects a security deposit from a tenant.

First,  a security deposit received by the landlord must be held in a separate, interest-bearing account in a Massachusetts bank. So, the landlord cannot co-mingle the security deposit with his or her other funds. The landlord must also give a receipt to the tenant within thirty days after the deposit is received and the receipt must identify the name and location of the bank and the amount and account number of the deposit. Failure to comply with these requirements entitles the tenant to immediate return of the security deposit.

Second, the landlord must pay interest on the deposit. If you’re going to hold the security deposit for one year or longer, then beginning with the first day of the tenancy you must pay interest on the security deposit at the rate of five per cent per year, or the lesser amount of interest that is being received from the bank where the deposit is held. The interest is payable to the tenant at the end of each year of the tenancy and the landlord shall the tenant a statement giving the name and address of the bank, the amount of the deposit, the account number, and the amount of interest payable by the landlord to the tenant. At the same time, the landlord must give the tenant the interest which is due or must include with the statement 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 the interest from his next rental payment.

Third, you must give the tenant a written statement of the current condition of the apartment. When collecting the security deposit, or within ten days after beginning the tenancy (whichever is later), the landlord must give the tenant a separate written statement of the present condition of the premises. This written statement shall contain a comprehensive listing of any damage then existing on the premises, including any violations of the state sanitary or building codes.

This statement must be signed by the landlord and must contain the following notice in twelve-point bold-face type 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 has the right to submit to the landlord a separate list of damages that he/she thinks exist on the property and within fifteen days of receiving this separate list, the landlord must return a copy of it to the tenant with either the landlord’s signed agreement to the separate list or a clear statement of disagreement attached to it.

When the tenancy comes to an end, the landlord must return the security deposit to the tenant within thirty days (along with any interest that may be owed). The landlord may deduct money from the security deposit reasonable amounts to repair any damages caused to the rental unit by the tenant (or his/her guests). Normal wear and tear to the apartment is not considered damage and is excluded from this right.

If a landlord deducts for such damage repairs, then he/she shall provide to the tenant within such thirty days an itemized list of damages, sworn to by the landlord under the pains and penalties of perjury, itemizing in precise detail the nature of the damage and of the repairs necessary to correct such damage, and written evidence, such as estimates, bills, invoices or receipts, indicating the actual or estimated cost for repair. No amount shall be deducted from the security deposit for any damage to the dwelling unit which was listed in the separate written statement of the present condition of the premises which was required to be given to the tenant at the beginning of the tenancy or for any damages listed in the separate list submitted by the tenant and signed by the landlord.

If a landlord violates certain provisions of the security deposit law, the tenant can actually recover three times the amount of the security deposit, interest at 5% and reasonable costs and attorney’s fees from the landlord.

As you can see, the security deposit law if very complicated. In fact, this discussion of the security deposit law is only a brief overview of the statute. If you are a landlord and are considering collecting a security deposit, I urge you to review the law and its requirements very carefully and to seek the advice of a lawyer.

Attorney Andrew Garcia, Your SouthCoast Business Attorney

Attorney Andrew Garcia, your SouthCoast Business Attorney, is a principal of Phillips Garcia Law. He’s created a Business Legal Planning system that will walk you through the process of forming your Massachusetts corporation. Locally he has appeared live on WBSM-AM radio and nationally on NBC’s Today Show and Fox’s Fox & Friends program. If you are interested in learning more about his Business Legal Planning services, just contact him at agarcia@phillipsgarcia.com or by calling (508) 998-0800.

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