Ask Me Help Desk - Security Deposits

Quote:

Originally Posted by danielparisi

I have researched landlord requirements about security deposits. I am wondering if I have a little more flexibility on the rules as I am renting beach property on a weekly basis.
The property is in MA.
- I will be holding security deposits from 1-4 months but returning funds within 30 days from tenants check out date. We require full payment by May 15 before the rental season begins and plan on asking for the security deposit at the same time. Rental weeks are June, July & August.
- Can I deposit all security deposit funds in one bank account, separate from other bank account funds or must each security deposit have a separate bank account?
- Will I be required to pay the tenant interest on the security deposit even though it will not be held over 4 months?
- Will I be required to inform the tenant about bank information regarding where the funds are deposited?
Thank you

Security and last month are explained together:

" A security deposit is a deposit of money to the landlord to ensure that rent will be paid and other responsibilities of the agreement will be performed. Neither may be greater than the amount of one month’s rent. If the landlord later raises the rent, s/he can require you to increase the amounts of both pre-payments to equal the new rent. Neither the landlord nor you can transfer one for the use of the other without the other party’s consent.

Receipts: Upon receiving the last month’s rent and/or a security deposit, the landlord must give you a receipt for each pre-payment. If the landlord collects the last month’s rent, s/he must give you a statement indicating that you are entitled to interest on this rent and that you should provide the landlord with a forwarding address at the termination of tenancy where interest can be sent.

Interest: The Massachusetts landlord must pay interest on both the security deposit and the last month’s rent. The payment of interest on security deposits and last month’s rent has been required by law since April 1, 1984.

Security deposit: you are entitled to either 5% (subject to change) interest or whatever lesser amount received from the bank where the deposit has been held, if you live in the apartment for at least one year. The law requires the landlord to hold a security deposit in a separate, interest bearing account in a Massachusetts bank. Within 30 days of receiving your deposit, the landlord must give you a receipt identifying the bank’s name and address, the account number, and the amount of the deposit."

Massachusetts Security Deposits