Security Deposit

Why does the security deposit law matter?

  • Outside of the conditions-related counterclaims, violation of the security deposit law (c. 186, § 15B) is the most common counterclaim asserted as a defense to possession (under §8A) and potentially entitles the T to treble damages (3x security deposit) and attorney’s fees.

M.G.L. c. 186, § 15B

  • What follows is a gross summary of the statute as it relates to the security deposit, paragraph by paragraph:

    • (2)(b) – First Receipt requirements. Given upon receipt of security deposit.

    • (2)(c) – Second Receipt requirements. Given within 10 days of tenancy’s beginning.

    • (2)(d) – Security deposit record maintenance requirements.

    • (3)(a) – Third Receipt requirements. Given within 30 days after receipt of security deposit.

    • (3)(b) – Requirements for annual interest payments on security deposit and receipts/statements.

    • (4) – Requirements for return of security deposit and permissible deductions.

    • (5) – Requirements for transfer of security deposit from old to new LL.

    • (6) – List of reasons for which LL loses right to hold security deposit:

      • (a)* – fails to deposit in separate interest bearing MA bank account beyond the of reach of creditors

      • (b) – fails to give itemized list of damages w/in 30 days of end of occupancy

      • (c) – tries to enforce unlawful lease provision re: security deposit

      • (d)* – fails to transfer deposit to successor or for the successor to take proper steps w/ regard to a security deposit for which she is liable (even if she never got security deposit from old LL)

      • (e)* – fails to return deposit ‘or balance thereof’ w/in 30 days of end of occupancy

    • *(7) – Treble damages for violations of (6)(a), (d), and (e), plus interests, costs, attorney fees (‘the big three’).

How do I litigate this?

  • When filling out an Answer, you’ll want to ask the T whether they:

    • Paid a security deposit? // Received any receipts for it? // Received annual interest? // Aware of where it’s being kept?

    • If the T paid a security deposit and did not receive receipts or interest, raise as counterclaim.

  • If the T is still in occupancy, a prerequisite for recovery of treble damages is a demand for a return of the deposit, for which the filing of a counterclaim suffices. Just how much time after filing the counterclaim a LL has to return the deposit is murky – but it seems to be around thirty (30) days.

  • If a security deposit issue has been identified, MADE will auto-populate security deposit related discovery requests. The responses/docs to these requests must be heavily scrutinized.

  • If none of ‘big three,’ certain violations require return of deposit after demand – (2)(d), (3)(a), (6)(c).

  • If LL subject to 93A, any violation of security deposit law is considered an unfair and deceptive practice, entitling T to, at a minimum, statutory damages ($25) and attorney’s fees. 940 CMR 3.17(4)(k).