Overview
Massachusetts has some of the strictest security deposit laws in the nation under M.G.L. Chapter 186, Section 15B. The law imposes numerous requirements on landlords and carries severe penalties for non-compliance—including mandatory triple damages for certain violations. Property managers must follow these rules precisely, which is why many rely on Passive for compliance. The statute applies to most residential tenancies, with one exception: leases of 100 days or less for vacation or recreational purposes are exempt from these requirements (Section 15B(9)).
Maximum Security Deposit
Massachusetts landlords may collect no more than one month's rent as a security deposit. This limit applies to all residential rental agreements with no exceptions (Section 15B(1)(b)).
At the start of a tenancy, landlords may only collect:
- First month's rent
- Last month's rent
- Security deposit (maximum one month's rent)
- Cost of a new lock and key
Landlords may request an additional pet deposit, but this does not apply to tenants with service animals, as charging extra for service animals is considered discrimination under Massachusetts law.
Return Timeline
Landlords must return the security deposit or remaining balance within 30 days after the tenancy ends (Section 15B(4)). This applies to both tenancies-at-will and fixed-term leases.
When returning the deposit, landlords must provide: (Connecticut has similarly strict requirements—see Connecticut security deposit laws.)
- A sworn, itemized list of all deductions
- Receipts, invoices, or written estimates supporting each deduction
- Any remaining balance of the deposit plus accrued interest
Failure to provide proper documentation within 30 days can result in the landlord forfeiting the right to make any deductions (Section 15B(6)).
Interest Requirements
Massachusetts requires landlords to pay interest on security deposits (Section 15B(3)(b)). The interest rate is the lesser of 5% annually or the actual rate paid by the bank where the deposit is held.
Key interest requirements:
- Interest must be paid to tenants annually, or credited toward rent
- Landlords must provide a receipt showing the amount of interest paid
- The deposit must be held in a separate, interest-bearing account in a Massachusetts bank (Section 15B(3)(a))
- The account must be protected from the landlord's creditors
While landlords don't need a separate account for each tenant, the account may only contain security deposits and prepaid rent—never the landlord's personal funds.
Allowable Deductions
Massachusetts strictly limits what landlords can deduct from security deposits (Section 15B(4)). Allowable deductions include:
- Unpaid rent that has not been validly withheld by the tenant
- Unpaid water charges that the lease assigns to the tenant
- Real estate tax increases the tenant owes under a tax escalation clause
- Damage beyond normal wear and tear caused by the tenant or their guests
Landlords cannot deduct for normal wear and tear. Whether damage qualifies as "normal wear and tear" is determined on a case-by-case basis. A 2025 court decision (Peebles v. JRK Property Holdings, Inc.) reaffirmed that the statute does not permit deductions for reasonable wear and tear.
Required Notices & Documentation
Massachusetts imposes strict documentation requirements on landlords (Section 15B(2)):
Receipt for Security Deposit
Within 30 days of receiving a security deposit, landlords must provide a detailed receipt (Section 15B(2)(b)) that includes:
- The amount received
- The date received
- A description of the rental property
- The name of the person receiving the deposit
- The bank name and account number where the deposit is held
Statement of Condition
Within 10 days of the tenancy start date (or after collecting the deposit, whichever is later), landlords must provide a written Statement of Condition (Section 15B(2)(c)) that:
- Lists all existing damage to the unit
- Identifies any building or sanitary code violations
- Describes damage in common areas
The tenant has 15 days to review and return the statement with any additions or modifications.
Penalties for Non-Compliance
Massachusetts imposes severe penalties on landlords who violate security deposit laws:
Triple Damages
Landlords face mandatory triple damages plus attorney's fees for these specific violations (Section 15B(7)):
- Failing to deposit funds in a proper interest-bearing account within 30 days
- Failing to return the deposit or provide a proper Statement of Damages
- Failing to transfer the deposit to a new landlord upon sale of the property (Section 15B(5))
Forfeiture of Deposit
When landlords fail to follow the law's requirements, they must forfeit the entire security deposit—even if the tenant caused damage or owes rent (Section 15B(6)).
Consumer Protection Liability
Under M.G.L. Chapter 93A, any violation of the security deposit statute may be considered an unfair or deceptive practice, potentially resulting in additional triple damages even for violations not specifically listed above.
Common Compliance Questions
What happens if I miss the 30-day return deadline?
Missing the deadline is costly in Massachusetts. If you fail to return the deposit or provide a proper itemized statement within 30 days, you forfeit the right to make any deductions—even for legitimate damages. The tenant can also pursue triple damages plus attorney's fees in court. Set calendar reminders at move-out to avoid this expensive mistake.
Can I deduct for professional cleaning?
Only if the tenant left the unit dirtier than normal wear and tear would explain. Routine cleaning between tenants—like shampooing carpets or washing walls—generally cannot be deducted. However, if the tenant left excessive filth, garbage, or stains beyond typical use, you can deduct actual cleaning costs with documentation.
Do I need a separate bank account for each tenant's deposit?
No, but the account must be in a Massachusetts bank, must be interest-bearing, and must contain only security deposits and prepaid last month's rent—never your operating funds. Many property managers use a single escrow account for all deposits, which is permitted as long as you maintain accurate records for each tenant.
What if the tenant doesn't return the Statement of Condition?
If you properly delivered the Statement of Condition and the tenant doesn't return it within 15 days, the statement is deemed accurate as submitted. However, you must be able to prove you provided it—use certified mail or get a signed acknowledgment. Without proof of delivery, you may lose the ability to charge for pre-existing damage. See how Passive works to track all required documentation automatically.