Massachusetts security deposit laws for landlords: the separate account, yearly interest and triple damages

What can I collect before a tenant moves in?

Section 15B(1)(b) lists the only amounts a landlord may require at or before the start of a tenancy: the first full month's rent, the last full month's rent at the same rate, a security deposit equal to the first month's rent, and the purchase and installation cost of a key and lock. The deposit is allowed only if you have deposited it as subsection (3) requires and given the tenant the statement of condition.

Example a made-up apartment rents for $2,000 a month. The most you may require before move-in is $2,000 for the first month, $2,000 for the last month, a $2,000 deposit and, say, $35 for a new lock and key. That is $6,035. A $150 application fee or a pet deposit on top of that is not on the list.

After the tenancy starts you may not demand rent in advance beyond the current month or a deposit above the legal amount (15B(1)(d)).

How must the deposit be held and receipted?

The deposit is the tenant's property, may not be mixed with your own money, and is not subject to the claims of your creditors, including a foreclosing mortgagee or a bankruptcy trustee (15B(1)(e)). Section 15B(3)(a) requires a separate interest bearing account in a bank located in Massachusetts, set up so the deposit stays beyond your creditors and can transfer to a new owner.

You owe two receipts. At the time you take the deposit, give a signed receipt showing the amount, who received it, the date and a description of the premises (15B(2)(b)). Within thirty days, give a second receipt showing the bank's name and location, the amount and the account number (15B(3)(a)). Failing to comply with the account rule entitles the tenant to immediate return of the deposit.

What interest do I owe?

If you hold the deposit for a year or longer from the start of the tenancy, you pay interest from the first day at five percent a year, or the lower amount the bank actually paid, to the tenant at the end of each year (15B(3)(b)). At each anniversary you send a statement with the bank's name and address, the amount, the account number and the interest owed. You can pay the interest or tell the tenant it may be deducted from the next rent payment. If the tenant has not received it within thirty days of year end, the tenant may deduct it.

Example a made-up $2,000 deposit sits in an account that pays 1% a year, which is $20 a year. Because the bank paid less than five percent, the tenant is owed the $20 actually received, not $100. If the tenant leaves after 8 months, the accrued interest is due within 30 days of the end of the tenancy.

Rent paid in advance for the last month carries the same five percent or lesser bank rate under 15B(2)(a), beginning with the first day, though no interest accrues for the last month itself. It needs its own receipt stating the amount, date, intended use as last month's rent and the interest the tenant is entitled to.

What is the statement of condition?

When you take a deposit you must give the tenant, on receipt or within ten days after the tenancy begins, whichever is later, a separate signed written statement of the present condition of the premises, with a comprehensive list of existing damage (15B(2)(c)). It must carry a prescribed notice in twelve point bold type at the top. The tenant has fifteen days to sign or return a separate list of damages. You then have fifteen days to return a copy with your signed agreement or a clear statement of disagreement.

This list matters at move-out: you cannot deduct for damage listed in it, unless you repaired the damage and can prove the later damage is new and caused by the tenant. You must also keep a record for each deposit, with damage descriptions, dates, repairs and receipts, for two years after the tenancy ends, and a tenant may inspect it (15B(2)(d)).

When and how do I return the deposit?

Within thirty days after the tenancy ends, return the deposit or the balance, with interest, after permitted deductions (15B(4)). The permitted deductions are unpaid rent or water charges not validly withheld, unpaid real estate tax increases under a conforming tax escalation clause, and a reasonable amount to repair damage caused by the tenant or people under the tenant's control, excluding reasonable wear and tear. For damage you must send, within the thirty days, an itemized list sworn under pains and penalties of perjury, with estimates, bills, invoices or receipts. Nothing else may be deducted.

What happens if I get it wrong?

Section 15B(6) lists the ways to forfeit your right to keep any part of the deposit, or to counterclaim for damage: not depositing it as required, missing the thirty day itemized list, using a lease term that conflicts with the section and trying to enforce it, failing to transfer the deposit to a successor, or not returning the balance within thirty days. Under 15B(7), failing the account, successor or return rules means the tenant is awarded three times the deposit (or balance owed), plus five percent interest from the due date, court costs and attorney fees. The tenant's waiver of any of this is void (15B(8)).

On a sale, the deposit and its interest must go to the new owner, who must notify the tenant within forty-five days (15B(5)). See what happens to deposits when a building is sold.

How DoorKeeping handles it

Each Massachusetts property in DoorKeeping gets its own books and bank account, and each tenant's deposit is tracked there on its own line, which gives you the per tenant amount that the yearly interest statement needs. Leases go out for e-signature and the signed copy is filed under the property's documents. DoorKeeping never holds the deposit and any step involving money waits for your approval. It does not give legal advice.

Sources

1. Massachusetts General Laws chapter 186, section 15B, read Oct 30, 2026

Questions

How much can a Massachusetts landlord charge as a security deposit?

No more than the first month's rent (G.L. c. 186, 15B(1)(b)), within the overall list of first month, last month, deposit and the cost of a key and lock.

Does a Massachusetts landlord have to pay interest on a deposit?

Yes, once the deposit is held a year: five percent a year or the lower rate the bank paid, paid each year of the tenancy, with the balance due within 30 days after the tenancy ends.

How fast must a Massachusetts deposit be returned?

Within 30 days after the tenancy ends, with the deposit and interest or a sworn itemized list of damages and the balance.

What is the penalty for losing track of a deposit?

Three times the deposit or the balance owed, plus five percent interest, court costs and attorney fees, if you fail the account, successor or return rules (15B(7)).