Residential Apartment Rentals
Purpose:
This policy outlines the procedures and legal requirements for handling security deposits for residential apartment rentals. The policy ensures compliance with Massachusetts state law and promotes transparency and fairness in our dealings with tenants.
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1. Definition of Security Deposit
A security deposit does not include fees or additional charges related to pets, which are addressed separately under Massachusetts law. A security deposit is a payment collected from a tenant at the beginning of a tenancy, intended to cover damages beyond normal wear and tear, unpaid rent, or other breaches of the lease agreement.
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2. Collection of Security Deposits
2.1 Amount
- The security deposit cannot exceed the equivalent of one month's rent.
2.2 Pet Deposits
- In Massachusetts, landlords are prohibited from charging a separate pet deposit in addition to the security deposit.
- The total security deposit cannot exceed the equivalent of one month's rent, regardless of pet ownership.
2.3 Documentation
- A detailed receipt must be provided to the tenant upon collection of the security deposit. This receipt must include:
- The amount received.
- The date of receipt.
- A description of the tenancy (property address, lease term, etc.).
- The name of the person receiving the deposit on behalf of the company.
2.4 Statement of Condition
- Within 10 days of receiving the security deposit, the landlord or property manager must provide the tenant with a Statement of Condition form, describing the condition of the rental unit. The tenant has 15 days to review, amend, and return the form.
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3. Handling and Storage of Security Deposits
3.1 Separate Account Requirement
- Security deposits must be held in a separate, interest-bearing account in a Massachusetts bank. This account cannot be used for any other purposes.
3.2 Notification of Account Details
- Within 30 days of receiving the security deposit, the tenant must be provided with:
- The name and address of the bank where the deposit is held.
- The account number.
- The amount of the deposit.
- The annual interest rate.
3.3 Interest on Security Deposits
- The security deposit must accrue interest at the rate specified by the bank where it is held or 5% annually, whichever is lower.
- Interest must be paid to the tenant annually, either as a direct payment or as a credit toward rent.
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4. Use of Security Deposits
4.1 Permissible Uses
- Security deposits may be used for:
- Repairing damages caused by the tenant beyond normal wear and tear.
- Covering unpaid rent.
- Other costs explicitly allowed under the lease agreement.
4.2 Inspection and Notification
- Upon termination of the tenancy, an inspection of the rental unit must be conducted. The tenant must be notified of any deductions from the security deposit, and an itemized list of damages and associated costs must be provided within 30 days.
4.3 Return of Security Deposit
- Any remaining balance of the security deposit, along with any owed interest, must be returned to the tenant within 30 days of the end of the tenancy. The return must include an itemized statement if deductions were made.
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5. Prohibited Actions
- Commingling security deposit funds with other accounts.
- Charging fees or penalties against the security deposit not explicitly allowed by Massachusetts law.
- Retaining the deposit beyond 30 days without providing an itemized statement and any required documentation.
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6. Legal Compliance
This policy complies with Massachusetts state law, including Chapter 186, Section 15B, which governs landlord-tenant relationships security deposits.
Failure to comply with Massachusetts security deposit laws may result in:
- The landlord being required to return the deposit in full, with interest.
- Payment of triple the amount of the security deposit as damages to the tenant, plus court costs and attorney fees.
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7. Contact Information
For questions or concerns regarding this policy, tenants may contact the property management office at:
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8. Policy Updates
This policy will be reviewed annually and updated as necessary to ensure compliance with state and federal laws and to address tenant and operational needs.
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Effective Date: 23rd day of October 2023